WiMP Brings Music Streaming Service To Sweden

WiMPWiMP, Scandinavia's latest music streaming service will open itself to the Swedish users,  beginning March 3rd. This would allow users to signup for the service for 30 days to listen to free music. The service will offer users a quick and easy way to access a countless songs in its archive and has been specifically customized to cater to the Swedish music lovers.

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GigsWiz Brings Its Ticketing Service To The US

GigsWizGigsWiz, the Finnish startup that launched last year as what we all would call a fan and artist friendly ticketing service has sailed across the European continent into the US. The startup offers bands tools to manage and collect requests from fans, also providing them with an extensive analytics on what friends want to hear and where.

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Rdio's New Investment Analyzed

Rdio, an on-demand music streaming service from the Skype founders, took one more important step in the race for the hearts, minds and wallets of music-lovers. We wrote previously about the impressive team behind the start-up and their close ties to the four major music labels. On top of that influential human capital, this week Rdio added some monetary capital to advance their business - they closed a $17.5M funding round from new and existing investors. The money will go towards spreading the service to new platforms and new regions as well as for further R&D. How significant is this investment for the company and its competitors?

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Spotify Sails Closer To US, Signs Deal With Sony

Europe’s most popular music streaming service, Spotify is finally edging closer to cross the ocean and land into the US market with rumors of it attempting to sign deals with major labels in the US market. Last week Peter Kafka hinted that it might have struck the cords with Sony US. This will be a distribution deal and wouldn’t necessarily steer clear Spotify to invade the US market.

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US Might Never See Spotify, Of Course Unless It Kills Its "Freemium" Model

SpotifyThere has been quite a a hype about the Swedish Music Streaming company, Spotify setting its feet on the US soils and honestly many have been waiting for this for long. Sad news, Spotify has just drained all hopes by pulling off the US launch altogether, thanks to all sorts of roadblocks created by US record labels. Quite astonishing, given that the music streaming service should have been fully functional in the region before 2010 ended. Things have turned out contrary to all such expectations.

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Hard. Rock. Online. Hallelujah!

Jenkatehdas is a music start-up from Finland that's been operating in stealth mode for about nine months but publicly released their service this September. The company describes itself as a Finland's first online rock venue: they host exclusive live concerts in a rented studio and stream it in real time. The audience needs to purchase tickets to be able to view the show (4-5€) and can interact with the band by signing into the chat room on the website using Facebook credentials. Yesterday Jenkatehdas streamed their  second third concert ever with Jukka Poika & Sound Explosion Band. Antti Eronen, founder and CEO, did not disclose the number of people watching the show but said he was "really happy with the number of tickets sold, since they were in triple digits". Most of the viewers stayed for over 50% of the show. All the more impressive given that the show was targeted primarily for the Finnish audience (all ads were in Finnish and the band is best known in Finland) and that the start-up is mere months old.

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Making A Business Out Of A Surprisingly Broken Industry

GigsWiz isn't even a year old and already they have a very solid and impressive track record behind them. I talked to Joonas Pekkanen, the finance guy as their website puts it, about their newly released ticketing service that in all simplicity helps bands sell more tickets. Having had this talk, I finally realised how fundamentally broken the industry has been. One of the main concerns the promoters have had, according to Joonas, is that bands really aren't helping out in promoting their own gigs. Now think about that for a moment, you as an entrepreneur (which artists are, but most probably don't think like it) aren't helping out people to sell your own services that your produce - how crazy is that?

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Click to fame with SongHi

Last spring we wrote about SongHi Entertainment and their launch of a closed beta product that helped easily create music with virtual instruments in a collaborative environment. Six months later, SongHi is a social music service that allows anyone to start playing and sharing their own music with a game-like interface in the browser. SongHi is live in the Nordics and Baltics, has partnership deals with Sony Music Finland and Universal. Also, it already started generating its first modest revenue this October. The point of the game is to create your own music and become famous among other users. SongHi's artificial intelligence is used to make sense of the amateur's music, making any mediocre player sound great. If you've been an active user, the game rewards you with stars to up your rankings, but you'd need to buy SongHi coins to purchase virtual items like intruments or fancy decorations for your virtual studio. You can't buy your way into fame but you can make it substantially easier by being a good consumer!  

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Hosting Music In GoogleDocs

Music storing and sharing is the last thing I associate with Google Docs. Yet there is a Finnish company –Spinlet - that recently launched a service to do just that. Spinlet does not offer music itself but it provides tools to listen to it and share it with friends. How it works is you upload the music you have from your computer to GoogleDocs and then download it through Spinlet to your mobile phone. Once you download the application to your mobile phone  you can manage and search tracks as well as create playlists. Complying with the current fashion, Spinlet is also integrated with major social networks like Facebook, Twitter, Foursquare and Brightkite.

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Is Apple Blocking Spotify In US To Protect iTunes?

CNET ran an article on Spotify and its troubles of setting up business in the US. Many believe it's the stubbornness of the record companies that have slowed them down to a halt almost. However, the CNET article states that Apple maybe protecting its iTunes Store from Spotify and talking with record labels to think twice about the ad-supported model. According to the CNet article, Apple executives are worried about the effects of a free music service might have on the rest of the market.

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GigsWiz Launches A Service For Measuring The Demand For Live Concerts

Gigswiz, a Finnish startup founded by Juuso Vermasheinä with the ex-Floobs duo Kai Lemmetty  and Joonas Pekkanen, has just launched in Beta. The service aims to enable bands and artists to better tell where they have fans who'd be willing to come and see them play. The team hasn't wasted any time as the beta launch came just months after they started to work on the idea in this February.

The service is an analytics platform for the live music industry and it should help bands, their agents and local promoters make better informed decisions on where bands should arrange concerts and tours. GigsWiz gathers fan requests through widgets that sit on the bands’ web sites and is looking to combine it with real-time consumption data from online music services. The actual widget can sit on the band's web pages, MySpace pages and Facebook pages.

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Spotify Expands To Netherlands

Spotify has just announced that it will expand its service offering to Netherlands. Netherlands is the seventh country Spotify is available. The other countries are Finland, France, Norway, Spain, Sweden and the UK. Dutch people can now sign up to the service using the link on their website.

It seems that Netherlands came before the US in the end, which shouldn't be a big surprise. Clearing rights and getting the legal side of things sorted out is not a light job to do. It might also make better business sense for Spotify to grow their business in Europe before hopping to US - a show of strength that might ease legal issues later on.

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Music Wants To Be Free And Social - So Does Spotify

iTunes just got  a kick in the head when Spotify revealed their plans this morning realeasing the Spotify version 0.4.3 which includes the largest feature upgrade since Spotify's launch in late 2008. Why? Because music just become very social. It's on now and Apple can ignore it only at its peril.

The release is centered around a set of social features more than anything else. It lets you create an identity that is defined by the music you listen, or put other way you can create a personal playlist and share it with your friends. In the new release you see your friends profiles and by clicking them you also see all the music they listen to (given they allow it to be seen).

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SongHi - Enabling The Masses To Create Music

SongHi Entertainment is a few years old Finnish startup aiming at empowering the masses with tools to create music. They will try to achieve this through a variety of means, such as casual music oriented games. SongHi Entertainment's mains service is called SongHi - a virtual community created around people interested in creating music. The company's on a roll too, a few months ago they closed an investment round that had a group of angels, Optiomi Invest Oy and Veraventure finance the company. Only few months ago they were able to hire one of the key personnels from Sulake, Juha Hynynen to join their ranks.

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Ex-Floobs Team Goes After Music Business With GigsWiz

The dust has barely settled since we reported about Floob's ending up in the deadpool on Jan 21st. Now the founding team, Kai Lemmetty and Joonas Pekkanen, is at it again and this times its music gigs they are after.

The new startup is called GigsWiz and is founded by Lemmetty, Pekkanen and  Juuso Vermasheinä who has a background in game retail business.

Lemmetty was responsible for product development and business development in the music industry at Floobs Ltd and had previously seen some of the problems in the industry and together with Pekkanen they had some ideas how to help the music industry build a better business. Vermasheinä had started the company already in the summer of 2009 but after meeting with Lemmetty and Pekkanen the three decided to start working together on a slightly different business plan. In addition to the core management team GigsWiz is building an advisory board including music industry specialists, crowdsourcing and 'intention broadcasting experts', which should hint on the area the company focuses on.

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Transformational Thursday

The other week I had the privilege to participate in Benjamin Zander's (homepage and bio) excellent presentation. Benjamin, or Ben, among other things is the conductor of the Boston Philharmonic Orchestra and has an extensive speaking career. He has, for example, appeared four times as a keynote speaker at the World Economic Forum in Davos. After witnessing his passion and talent, I cannot more highly recommend going to one of his keynotes (or concerts for that matter) if you get a chance.

What makes Ben's message so inspiring and original is the way he uses his background in classical music to reflect on the topics of leadership, strategic management, creativity, and positive thinking. He truly takes the audience on an extremely interactive journey through stories and music. And even though most of us are not that much into classical music, he certainly is able to light a spark thereto.

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Is Spotify Doomed? An Alternate Reality Analysis

hindenburgAs the region's reigning consumer web champion, there can never be enough stories about Spotify. And since today they've released a verison for Android and some new user & track figures, it's a good time as any to wonder what the future might hold for them. Especially in light of Apple's recent acquisition of US based La La Media. Caught on tape at Le Web, Spotify "Consigliere" Shakil Khan announced that they now have 7 million users in 6 countries choosing from 6.5 million tracks and listening for an average of 80-90 minutes per user. 

When asked the million billion dollar question about when the service will launch in the US, Khan reiterated the 1Q10 time frame that has been given before. Interestingly, he also said that one of the main delays has been setting up a corporate infrastructure in the US including "business licences and visas," as well as operations and ad sales teams in Los Angeles, San Francisco, and New York. Spotify has used this type of careful building since the beginning, and it is a credit to they way that they think about user experience, considering problems that would result from not being fully prepared as a degradation to the end service. However, with attitudes towards the non-ownership model changing rapidly, there will be an element of first-mover advantage to whomever can launch an insanely great streaming service in the US, and even more so if that first-mover happens to be called Apple. Will Spotify be dead-on-arrival in the US if Apple launches an iTunes streaming service before they're ready?

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Steam Republic Brings Bands Direct-To-Fan

steam republicSteam Republic, a Finnish startup in the mobile space, is focusing on digital fan oriented marketing. They are big in mobile and want to enable bands to control the relationship with their own fans and consequentially make money through that.

Steam Republic was previously called Backstage Alliance. The company has participated and won several competitions under both names. Latest is the Appsfire App Star Awards where they  were a finalist (see video below). They have also landed their first international agreement with EMI record label (UK) and are pushing out their first international pilot with You Me At Six already at the end of this week if all goes as planned.

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Hitlantis Looking To Enable Better Content Discovery

HitlantisReporting from the second day of MoneyTalks, being held here in Otaniemi, Espoo, Finland I bumbed into a new innovative music startup called Hitlantis. I talked to one of the co-founders Timo Poijärvi about the concept and what they are doing. Poijärvi has worked in the music industry and with some startups before, but has a strong experience from the ways the music industry works. This showed up in our talks and he openly questioned the need of Teosto (Finnish Composers' Copyright Society) and record labels for musicians. The future is about the community around the artists.

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Spotify Pays 30 Cents For 100 Album Playbacks

SpotifyThe Finnish Heavy Metal band Mokoma, has publicly thanked Spotify for their payout model. Their Facebook fan page states that for "every 100 album playbacks we get 30 euro cents from Spotify. Thanks Spotify." The deals that Spotify has struck with different artists have been kept secret, so it is not known if this is the only payout model. However, if there were 1000 people listening to an album and to my understanding would listen it through, Mokoma would get 3 €.

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Social Music Marketplace gogoyoko Launches in Scandinavia

Icelandic social music marketplace" gogoyoko has expanded their open Beta to cover the whole of Scandinavia. The service now works in Norway, Sweden, Denmark, Finland, Faroe Islands and Greenland. gogoyoko's tagline is bringing "Fair Play" back into the music business - through the service music fans can purchase music directly from the artists and labels. gogoyoko's service consists of a music store, a social network, and free streaming music player.


For artists and other music right holders gogoyoko offers a platform for creating their online destination and managing the sale, promotion, and distribution of their music. Through the service music fans can interact directly with the artists and purchase music from gogoyoko's music store without middlemen. Artists have full control over the pricing of their music, and get 100% of the profits. Users can access their music collection online or download it to any portable device - there is no DRM used.

gogoyoko also features a free streaming functionality, supported by advertising. Artists get a share of the advertisement revenues based on the streaming of their music. It is possible to use the streaming player also on other web sites.

The social networking features are aimed to encourage the interaction of artists, record labels, music professionals and music fans. All basic SNS features are supported from profiles and status updates to follow functionality. gogoyoko also plans to introduce more features later this year, like interactive music magazine and a worldwide music map providing concert listings and easy access to music and profiles.

I like the look and feel of the service a lot. The attitude is there as well - one cannot help smiling when receiving the account registration email greeting you "Welcome to gogoyoko, Your account creation was a huge success." The site functions pretty well (there are some quite minor layout issues to polish here and there), and streaming seems fast and smooth. For purchasing songs you first need to buy "store credits" between 2 and 100 euros with a credit card (for keeping the transaction costs in control, I presume).

It is of course impossible to avoid comparison with Spotify. However, the big difference is that gogoyoko is targeted as more a grass-roots platform and medium for connecting directly artists and fans. Its focus is in supporting artist self publishing in good and bad - it might become a very good channel outside the record label driven model, though it also forces artists to be responsible for self marketing their music.

Despite the steaming functionality, gogoyoko offers the pay-per-download model for taking the music with you on a portable device. It is interesting to see what happens to that model going forward. Spotify's offline streaming functionality is a big benefit and allows you to enjoy a whole bigger range of music on the go. On the other hand, the pay-per-download model does also provide good way of directly supporting artists you like.

However, I still believe there should be a feature like Richard Stallman's


old idea (in one of his essays) of a easily available "donate" button, which would allow you to send amount of your choice to the artist whose work you are listening. More and more now as digital content can be easily copied with practically no distribution cost, why depend on the old pay-for-download model when it is very much one-off transaction that is also limited to a nominal fixed fee. As a fan, why not send the artist some love each time when you are on a great mood and enjoy a particular song? That would provide artists also much better recurring return on their creativity over time.

gogoyoko logoIcelandic social music marketplace gogoyoko has expanded their open Beta to cover the whole of Scandinavia. The service now works in Norway, Sweden, Denmark, Finland, Faroe Islands and Greenland. gogoyoko's tagline is bringing "Fair Play" back into the music business - through the service music fans can purchase music directly from the artists and labels. gogoyoko's service consists of a music store, a social network, and free streaming music player.

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Spotify Aims For €230 Million Valuation

spotifyWe all love Spotify here at ArcticStartup and use it everyday to listen our favorite tracks. We also know that it was not cheap to begin with for the VCs to invest in Spotify even though it was (and still is) the early days, since the founders Daniel Ek and Martin Lorentzon had plenty of experience, capital of their own and know what they were doing. But if you thought it was expensive before, the Times Online reports that "Spotify is trying to drum up a valuation of close to £200m (roughly €230m) as it seeks new investment of between £20m (€23m) and £30m (€35m)."

Times Online further reports that If it Spotify achieves the valuation it aims for, the company will have almost trebled in value since it sold a £13m stake last autumn to Nordic investors Northzone Ventures and Creandum.

We are excited and for once, think the high valuation is for a very good reason. Just recently in an investor forum I heard a VC who had invested in Spotify proudly stating that Spotify is the next Skype, meaning that it will be the next big Internet service success story coming from the region. They certainly have the right direction and I don't think I have seen any company have the same potential since. Regardless of whether Spotify ever reaches a $2.6 billion exit (with current exchange rate some €1.87 billion), or exit at all for that matter, I, for one, would invest in a heart beat.

The Future Of Spotify And Its Competition

The guest post is written by Niko Nyman, a Finnish consultant and a flash developer, with former careers in graphic design, web strategy, and music production. He has also co-written a book about social media called Yhteisöllinen media ja muuttuva markkinointi 2.0 (In Finnish). As a former professional musician Niko has a unique perspective to observe and comment on the current state of digital music industry, its latest darling Spotify and the challenges it faces against established players like Apple. You can find our previous post on Spotify here, where Daniel Ek, Spotify's founder, discusses the rivalry with iTunes.

Spotify logo

Spotify is growing strongly, and everybody seems to be talking about it. Spotify even made the news on Finnish national TV last week! It’s David Bowie’s music like water pouring down the internets, and if Mr. Bowie’s 2002 epiphany is to be believed, the aging 20th century music industry will exist no more after three years. Three years!

(See also music like water, as popularized by Gerd Leonhard.)

So what is the future of Spotify?

It is difficult to envision any other serious competitor for Spotify but Apple. I find it quite brave of the small Spotify to go against the big Apple in the music market — and they will go against each other, even if they do not yet compete directly. I’m not claiming to have any information on either company (I haven’t even done my research, really) so this is just speculation, mainly to entertain my tired brain after work.

Here are a couple of possible scenarios for what might lie in Spotify’s future:

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Swedish Dimest Powers ABBA's Viral Music Store

Dimest logoDimest, a Stockholm-based startup, has provided a music store solution using which ABBA has released their entire song library online for people to buy directly from ABBA's official web site. Soon the purchases can also be made on blogs and social media sites like Facebook, as Dimest's solution is based on a music store widget which everybody can copy and place on the website of their choice. This way Dimest allows artists to sell their music without middlemen directly to their fans. Through the widget it is possible for example to browse albums, listen to samples of tracks, and watch music videos. What about the most important question? Yes, DRM-free 320kbs MP3. Try it out yourself, I grabbed the ABBA one and placed it here (purchases only enabled in Sweden so far, though):

The record company Universal states that ABBA is only the beginning, and they will try Dimest's solution with many other artists as well, in quest to "give our artists the opportunity to get closer to the fans". As ABBA's version does not allow buying outside Sweden as of now, below is also a widget selling music from Måns Zelmerlöw, the Swedish representative in Eurovision Song Contest. The song's are priced at 10 SEK (around 0.86 EUR or 1.09 USD; there seems to be also a service fee of 3 SEK added, though).

Dimest was founded by a musician and songwriter Jonas Saeed, other co-founders being Hans Desmond, previous Managing Director Warner Chappell Music Scandinavia, and Sanji Tandan, former Managing Director Warner Music Sweden. Due to these connections the firm has established partnerships with all major labels in Sweden, and is currently negotiating with other Scandinavian countries. Dimest is also working with Aftonbladet, the biggest media group in Sweden, and a number of Swedish blogs. The firm has funding from a few private investors, but is looking to raise more funding to support the growth plans.

Dimest ScreenshotInterestingly, the solution of Dimest scales beyond music as well - it could be used for any digital content, like books, games, movies, ring tones, documents, lyrics, and software. The founder Jonas Saeed in fact commented to ArcticStartup that their big goal for this year is to launch a global web service available to anyone to upload their digital content, create customized storefront widget, set their prices of choice, and start selling. Dimest offers 90 % revenue share to artists and content providers.

There have been music store widgets before as well, but Dimest has a good advantage in their close relationships with the record labels, high revenue share, and the fact that they support all types of content by default. Widget solution in general is really good for viral word-of-mouth effect including the commercial side along. It brings the content all over the web, without having to pull users to some specific web site or storefront. It will not be easy to scale the service, though, as all sellable content will reside on Dimest's servers.

The official press release (in Swedish; try Google Translate version).

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Social Music Marketplace gogoyoko Raises ISK 100 Million

gogoyoko logoDespite of the downturn and bad overall economical situation in Iceland, the new social music service gogoyoko (see our previous intro)  has secured 100 million Iceland Kronur (slightly more modest in euros: EUR 0,69M; USD 0,89M) in funding from Icelandic The New Venture Business Fund (90 %) and private investor Vilhjalmur Thorsteinsson (10 %).

The purpose of the funding was not disclosed, but in the company's newsletter it is stated that the firm has been growing steadily and just moved to a bigger office. gogoyoko is still looking for more people and prepares for increasing international marketing activities this year. gogoyoko has gotten advice and steering for the fundraising and  product development process from Norwegian  "New Media Innovation House” Ignitas that also has taken an equity stake in gogoyoko. Ignitas has been previously involved in selling Norway's #2 social network Biip.no to media enterprise Egmont/Nettavisen.

gogoyoko provides artists and other music right holders a social marketplace allowing them to sell music directly to consumers worldwide without middlemen. The service is currently running in closed beta, planned to be publicly opened in April. gogoyoko's service is promised to include interesting features like a custom music player embedable to any site through which the users can stream (ad-funded) tracks and albums for free. The player is also supposed to include a music store interface. On gogoyoko's portal, artists can create their personal sites, write news, blog entries, upload discography, pictures, videos, and enter gig information to gogoyoko's global map.

The firm's updated intro video:

Gogoyoko from Gogoyoko on Vimeo.

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Spotify Adds CD Baby Catalogue

SpotifySpotify blogged last week about a very welcome addition to their catalogue - a partnership with CD Baby. CD Baby has some 250 000 artists and over one million tracks that they distribute to the public through various services, iTunes to mention one.

CD Baby was the first large "label" that signed a deal with iTunes back in the day to enable the addition of smaller and less popular artists - in essence enabling the long tail of music. In many cases, I've heard friends complain that Spotify is working extremely well but it lacks the music they listen to. I'm hoping the addition of CD Baby will fix part of that problem.

Spotify offers an option for artists and labels to signup on their website, but also notes that they won't be automatically added to the catalogue just yet. Therefore, CD Baby means a lot for the indie artists looking for a way in to Spotify. The success of Spotify, in terms of the variety of music, will be determined how successful of a model they can build for the independent artists that do not have a label representing them. If Spotify is able to build a model for the most beginner of artists to join the service and yet keep the signal to noise ratio feasible - they are on to something.

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Spotify - Some Wins And Some Setbacks

spotifyThere has been happening around Spotify, a Swedish startup offering a lightweight software application enabling on demand streaming of music. And it's not been the normal buzz where everybody is competing to give praise to the service.

First there was the announcement that Spotify is hiring Gustav Söderström, who’s Leaving Yahoo! Inc. to be the director of portable solutions at Spotify . 'I came to Yahoo! Inc in 2006 through the acquisition of Mobile social software company Kenet Works AB of which I was CEO and co-founder (learn more about me). After two years as Director of Product Management and later Director of Business Development, I've decided to leave Yahoo! Inc in order to join music startup Spotify.' (thanks for the heads up to Henrik!)

Today Spotify announced on a more down beat tone that they are forced to add a country restriction to some songs and remove some songs completely from their playlists. Why? Not surprisingly this required by their label deals.

Despite the small set back, the Spotify team added that their ‘dream is to create a music experience where users can play whatever music they want, whenever they want, it may take awhile but we will keep working at it’. Now that Söderström is on board to lead Spotify's mobile strategy, they are likely to tackle next the ‘create a music experience ... whenever’ the users want it -part. We, for one, can’t wait to see what Spotify on a mobile will look like.

You can find the full announcement below (you should also go read the original annoucement as last time I checked they had no less the 199 comments!) and our previous post on Spotify challenging iTunes here.

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gogoyoko Introduces a Social Music Marketplace

gogoyoko logogogoyoko is a startup building a new social music marketplace, founded by a group of artists, who after years of selling music got tired of middlemen eating most of the sales revenues. The company is based in Reykjavik, Iceland. gogoyoko's music service was launched in closed Alpha on November 15, and is said to be launched in March 2009.

gogoyoko offers a platform for artists and audience to interact around music. Most importantly, naturally, it is possible to buy music from the service. gogoyoko creates a direct channel between the end users and artists, letting artists price their own music and keep 100 % of the sales revenues (after transaction costs). The music files will be DRM free.

gogoyoko screenshotAn interesting feature is that via gogoyoko's custom web player, users will be able to stream tracks and albums for free, which is apparently supported by ads (sounding similar to Spotify). gogoyoko states they pay artists and right holders 40% of the advertisement revenue made from the streaming of their music. Also, each artist can get an own customized store and music player, which can be embedded to the artist's own blog and homepage, or any other site.

There is more than just a music store, however. Each artist can create a personal site, and allow the users to view latest news, blog entries, newsletters, discography, pictures, and videos while visiting the store. Artists will also be able to enter gigs, which will be placed on the service's map. gogoyoko plans to provide also mobile access to the map in the future. The visitors and fans can also contribute to the community by rating and reviewing songs, blogging, and even getting their articles published in gogoyoko's own online Music Magazine. gogoyoko will publish the Music Magazine announcing for example new releases, exclusive interviews, reviews, and special offers.

Similarly to Equal Dreams covered earlier, with gogoyoko an artist can also choose to automatically donate 10 % or more of their revenues to specific charity organizations, while the consumers can also choose to donate a sum of their choice. gogoyoko promises to donate 10% of its advertisement income to their partner international charity and environmental organizations.

gogoyoko's introduction video:

Gogoyoko from Gogoyoko on Vimeo

gogoyoko boasts it offers artists the control of the sales, promotion and distribution of their music at single location without middlemen. This setup is becoming more and more used in different content services (online games, iPhone apps, etc. etc.), and of course offers the artists maximum the revenue, but on the other hand, it also hands them over all the work. Especially if you are not a professional artist and make music on your free time, the question is whether you're able to devote enough time to market yourself to generate sales. Probably some lucky ones will get lots of fans by almost by accident, but the majority will probably would have to spend considerable amount of time marketing themselves to generate fan base and revenue. And that's time away from creating new music, so the question is what will be the best trade-off these kinds of direct-to-consumer services can offer?

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Will The Future iTunes Look Like Spotify?

spotifyHere's a Jaiku thread from last night (GMT +2) that basically outlines what the future of the worldwide music consuption might very well look like sooner than we think. The tread started when after Apple's announcement Jaiku Co-founder Jyri Engeström posed a questing to the Jaiku community "Wondering if DRM-free iTunes will affect Spotify's appeal"

Here's are some of the interesting thougths and ideas that were expressed. Pay especially attention to what Jyri concludes at the end of Spotify Co-founder Daniel Ek's answer. You can see the whole thread here.

Jyri Engeström: What does going drm-free tell us about Apple's future strategic direction for iTunes? I don't think it's out of the question that the future iTunes a little way down the road will look a lot like Spotify. If that was the case, where would it leave Spotify?

Daniel Ek, Spotify Co-Founder: Thanks for caring Jyri. I just think there's a fundamental difference right now between us. iTunes is still about ownership and will still only work out of the box with iPod. It's not like they've enabled support for a bunch of new devices. We on the other hand is more about an access model and the future will tell if we will go the Apple way and have a closed system, or actually open up to a variety of use cases ;-)


Daniel Ek, Spotify Co-Founder: @jyri: You know, a wise man talked about social objects cough ;-). We think music data is social objects, and we focus on building tools around them. We don't necessarily want to be a social network ourselves. That's also a hint on the future :)

Adawale Oshineye: Let's look at the financial aspects. Spotify's premium account is £9.99 * 12 months. Apple won't go after Spotify's market unless they're making less than £120 per average user per year from Itunes.

The other big question is regarding Apple's long term aspirations:

  • Option 1: they want lots of people (on the order of 100s of millions) buying lots of very cheap items from Apple. This has the advantage of being the same as their iPhone application strategy and lets them exploit economies of scale which would make it hard for anyone to compete with them. The bigger the market place the more customers you attract and the more customers the more likely people are to want to sell their products in your market place.

  • Option 2: they want lots of people (on the order of 10s of millions) to move to a subscription model for their music. This number is smaller than the first number as subscription requires a bigger commitment and that kind of commitment is likely to lose them some of the market. This has the benefit of a nice stable stream of revenue but fewer barriers to entry. Anyone can set up an equivalent subscription service (once they've got the record companies on board) and the only lock-in is the minimal length of the subscription contract.

I think the record industry would like option 2 as they'd still have the power to take away their music from the users of any subscription service that didn't play by their rules.

I think Apple are ambitious enough to seek option 1 as it potentially gives them control over a huge market in very cheap digital content: games, apps, music, ringtones, photos, micropayments for online services, etc. The systems they would need to make this work for music and iphone apps+games can be adapted fairly easily to lots of other small transactions once they've got their users comfortable with paying for things with their phone. The Japanese mobile phone market is a clear example of how this scenario can play out.

Jyri Engeström: @eldsjal I think I understand your approach fairly well although it's been a while since we discussed it -- which goes to show you're not visiting us often enough :)

As I recall pointing out before, Spotify's success against iTunes is affected to a significant degree by how well it can exploit the fact that Apple (awkwardly) wears two hats.

To be more precise, the interests of Apple the device manufacturer and Apple the online distributor are fundamentally misaligned. It's in the device manufacturer's interest to keep iTunes proprietary to the iPod; whereas it's in the online distributor's interest to sell music through as many channels as possible.

In the end this is a business equation. As long as Apple makes more money from devices, iTunes is likely to stay proprietary. But if the iTunes store grows into the de facto cash cow, or the iPod starts to lose market share, friction is bound to arise between the two units.

It's in Spotify's interest, therefore, that the iPod does well but not too well. Apple has to be compelled to keep iTunes proprietary, but worldwide sales of music players has to include a significant percentage of players that do not have iTunes. Spotify then has a shot at becoming the de facto music distribution platform 'for the rest of us'. Of course it'll face tough competition from other proprietary and open initiatives.


Jyri Engeström: @adewale I believe you're correct in that there are two business models, freemium subscription & per-item sales; however, they are not mutually exclusive. Of course Apple's not going to abandon sales of music tracks for ad-supported subscriptions. But it could easily add a free streaming/subscription mode to support its per-item sales (bait-and-switch like @oscar mentioned).

Daniel Ek, Spotify Co-Founder: +1 on @jyri :)

Jyri Engeström: @eldsjal reading the tealeaves from your "+1": the complementary nature of subscriptions and track sales means Spotify could just as well become iTunes ;)

Not only was this an interesting conversation on the future of worldwide music consuption and the direction of Spotify is heading, but this Jaiku conversation thread is also yet another evident that Jaiku is so much more than Twitter when it comes to conversations. Twitter surely has it's streghts, but Jaiku enables different kinds of communication. We need to have both(!), and as soon as Jaiku opens itself as well as its improved API to the public we will. Having Jaiku and Twitter sitting next to each other in a Tweetdeck would seriously change the way we communicate.

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Equal Dreams Connects Musicians and Audience

Equal Dreams logoEqual Dreams is a Finnish startup offering a fair music market. The firm states to "bring back the power" in music to audience and the artists. The company's service includes several tools for artists and music lovers to better find and cooperate with each other. Equal Dreams has divided their service into different parts: the Equal Dreams music market, Equal Share, and Equal Aid.

The music market allows artists to sell their music pricing songs and albums as they like. The artists keep the copyrights, and get up to 88% of the sales revenue (depending if the artist is part of any Composers' Copyright Society; Finnish Teosto takes 8 %). All music is offered DRM-free as MP3 or FLAC. At the moment there are around 200 artists, with over 2000 songs uploaded. Most, if not all, of the bands seem to be from Finland still.

Equal ShareEqual Share part of the service allows audience to invest in music and artists, quite similarly to SellAband. Differently to SellAband, though, the artists can themselves decide the amount of funding they seek, both singles and albums are valid projects. The artist also decides the percentage of profit they want to share from the sales of the final record. The audience is then free take the offer if they will, and to buy as many shares as they wish.

There are not that many bands active yet in Equal Share, apparently only five. Their specified need of funding ranges from EUR 500 to EUR 6000, and the highest profit share offering is 50 %. The closest band to their target has so far reached only 16 %. There has been an artist releasing their album as a result of the Equal Share service, though, in November 2008 (The Fogo Posto with funding of 1000 EUR).

Equal Aid feature is targeted to artists for supporting charities by donating a part of the sales profit to them. Artists can add Equal Aid deals to any songs simply by selecting the organization to support, and the donation percentage. The donations will then be made automatically per each song sale.

It is unsure yet how exactly Equal Dreams is going to go international, and how they will be able to compete the other similar services in gathering the critical user mass, but the motivation to do so is clear. The service now includes English, Finnish, German, and Swedish localization, and payment options cover credit card and Pay Pal, along with Finnish online bank payments.

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