#1 - It'll Get Better
The first episode of our new podcast is now out and it's called Unfair Advantage. In the weekly talk show we interview thinkers and doers from Northern Europe to understand what makes them tick. The show is co-hosted by me, Antti Vilpponen and our writer Greg Anderson. In our first show we interviewed Alex Esser from Sweden. He is one of the founding members of Tunaspot, a location based music discovery service. The service got its start from Copenhagen Startup weekend in 2011.
Angry Birds X-Mas Edition Is Angry Birds Seasons
Angry Birds phenomenon is through the roof again. Yesterday, Rovio released Angry Birds Seasons, which is the new and awaited Christmas edition of the game. It is also available as a free update for those players who bought the Angry Birds Halloween edition. The game is now available in the iTunes store as well as for the Android platform over here.
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.
The Game Industry In Flux
Those following the mobile gaming industry paid notice that the Finnish gaming studio Universomo was shut down (in Finnish) by its owner THQ Wireless, which acquired the Finnish firm back in 2007. Rumors started to spread on Tuesday this week and pretty soon THQ confirmed the liquidation of the studio. This is part of a bigger shift in the game industry.
Finnish Gaming Monopoly Ready To Sue An iPhone App Maker
It seems that the Finnish gaming monopoly, RAY, is the latest in the game of playing the big bad wolf who doesn't want to play nice. Finnish Helsingin Sanomat reports that they are ready to sue an iPhone app maker Elias Pietilä, for creating a game of the similar concept from one of the oldest coin games in Finland, Pajatso. Elias Pietilä calles his version of the game Pajatzo.
RAY (or the Finnish Slotmachine Association) has referred to the trademark law, law regarding good business practices (laxly translated) as well as the ever-so-famous copyright law. The first odd issue that puts the whole case into perspective is that RAY does not own the trademark to Pajatso, the original game concept.
MySites And Dazzboard Team Up
Two Finnish startups, MySites (see our previous story here) and Dazzboard (see our previous story here) announced recently that they will partner up: MySites which has completely rebranded itself as 'social cloud storage' is now offering Dazzboard users (as well as everybody else) unlimited amount of data storage for free.
We talked to both, MySites and Dazzboard CEOs, to get to the bottom of what is happening with the services and what the co-operation is all about.
MySites, for its part, is going head on againts services like Dropbox or even Mobile.me, which are cloud storage services primarily for consumer use. Ramine Darabiha, MySites CEO, emphasized that "MySites is going for the social angle. Not just a file service, but the best way to share files while you're on Facebook and on Twitter." Darabiha adds that "MySites is aiming to be the most Facebook friendly cloud storage service by integrating with many Facebook features such as friends and commenting to name a few".
Dazzboard, An 'Open iTunes'. We Have Invites
We all know and love Apple for giving us the almost seamless experience to manage content between the web, our laptop and ipod or iPhone via iTunes. Only problem is that it's as closed system as it gets. Linkotec, a Finnish startup is aiming to come to rescue with Dazzboard.
Dazzboard wants to become a non-proprietary, web-based personal portal for storing, organizing and sharing (via different of social networks) songs, photos, videos and other media content. Ideally, with Dazzboard you can sync anything with a memory to store your content.
Dazzboard overview from getdazzboard on Vimeo.
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 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:
Will The Future iTunes Look Like Spotify?
Here'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.
Spotify Opened For Public
Spotify, a Swedish startup offering a lightweight software application enabling on demand streaming of music, has opened up its service for public.
Earlier on we wrote about rumor that Spotify had raised €15m round from various investors. Last week I received a confirmation that Creandum and Northzone Ventures has invested undisclosed sum to the Swedish startup (more bout this here).
It's no wonder the startup is investors' latest darling as it just recently signed significant licensing deals with Universal Music Group, Sony BMG, EMI Music, Warner Music Group, Merlin, The Orchard and Bonnier Amigo.
The service launched on October 7th 2008 in UK, Germany, France, Italy, Spain, Finland, Norway and Sweden. Throughout the remainder of this year and into 2009 Spotify will be rolled out to further markets.
Spotify offers three different subscription models: Free, Day Pass and Premium accounts. Day pass cost you just under one pound sterling for 24 hours whereas the Premium account costs you 9.99 pound sterling a month. Free account is advertising funded, but if you have received your free account via an invitation already earlier on as I did, chances are you don't need to deal with any advertising yet. Advertisers that have signed up to be included from the launch include Ford, T-Mobile and Xbox.
Spotify – the story from Spotify on Vimeo.
In comparison, the service is better than any other music service I have seen so far. Spotify allows you to share songs and playlists with friends, and even work together on collaborative playlists. It will also recommend music you might like based on what you've listened so far. To my delight it also seems to do the recommendation very accurately to match my taste. Martin Varsavsky used a fitting analogies for the service.
[...] Spotify is like iTunes but with on-demand. It’s like Joost, but for music! It´s like Pandora without the need to vote and with your ability to listen to music anytime you want. It´s like Last FM without the community.
The only downside was that some of the current users saw many of the songs on their playlists disappear as Spotify cleaned their playlist to reflect the current copyright agreements that they have been able to push through. Regardless, I think this is a minor disappointment and the users will possible see many of the songs reappear as Spotify tries to get more record labels behind them.
You can also post and vote on your favorite playlist Digg-style at Spotylist. Spotylist also allows you to find new playlists that others have posted via simple links. I already found two good ones just from the blog comments.
The fact that another service has already build its own offering on Spotify's core product is a solid example that there is something very special about this service. Forget Last.fm, go Spotify!
