TechCrunch ran a story on Spotify a couple of days ago, where Daniel Ek had commented on some very interesting issues. Daniel Ek, Spotify CEO, spoke at SXSW and told in his keynote that, Spotify as a service consumes more bandwidth than the whole of Sweden (on certain days that is). Those wondering why Spotify is built in a P2P manner now fully understand the need for such a solution. Ek also commented that it’s a million dollar question why Apple remains to deliver all its digital downloads from a “single source” generating huge amounts of traffic that also need to be paid for.
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Spotify’s Monthly Revenues Around 3 Million Euros
Spotify Signs Exclusive Deal With TeliaSonera Finland
TechCrunch reports that Spotify has signed an exclusive deal with the Finnish side of TeliaSonera. The two year deal will give TeliaSonera the exclusive rights to sell Spotify Premium in Finland. The announcement comes on the same day as TeliaSonera unveils its IPTV service that is complete with a certain selection of television channels, video rentals and Spotify Premium. Spotify signed a similar contract with the Swedish side of TeliaSonera last year and it seems that the deal was worthwhile as the Finnish side of TeliaSonera also went forward with the partnership.
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Predictions For 2010 – What Are You Betting On?
The year has just turned to 2010 and it’s time to do some predicting into the future on the most likely trends this year. While they may not be accurate nor hold true in the end, it’s nice to get a feel for what people are predicting. I’ve got 6 predictions, some not so spectacular, others slightly more outside the possible reach.
The first one is a pretty obvious one based on the recent developments in the media world as well as the startups involved in this industry as well: online video will become a mainstream alternative for advertisers. This does not mean that online video itself will be watched in equally large amounts to regular television, but it will become an alternative and a possibility for advertisers. This essentially means that the industry itself will grow as a business and become an attractive platform for doing business.
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Is Spotify Doomed? An Alternate Reality Analysis
As 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? Continue reading »
Oskar Stål Appointed New Spotify CTO
Spotify blog has a post out that they have appointed a new CTO, Oskar Stål. He comes to Spotify from mBlox, a mobile transaction company he helped grow to a $100M business from a five-man team. The experience from mBlox is the main reason behind hiring Stål. Andres Sehr from Spotify writes that his experience in the art of building high performing technology teams and producing scalable, robust services in a fast growing environment is a significant advantage.
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Spotify Adds Support S60 Devices – A New Growth Strategy In The Making?
Spotify announced yesterday that is has added support for Symbian smartphones. Symbian is used by Nokia, SonyEricsson and Samsung. This has been a long awaited release as Symbian is still the most widespread phone OS around, thus dramatically increasing the potential for new Spotify users. While being a nice update and all, there might be something else in the makes regarding these application platforms. While many companies port their software to multiple platforms, not many are able to take advantage of them to the extent Spotify does. Earlier this month Spotify announced that it has signed a deal with 3 UK to distribute HTC phones with Spotify premium included. This may be the route Spotify is more eagerly going to take in the near future regarding other operators in Europe as well.
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Spotify Pays 30 Cents For 100 Album Playbacks
The 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.
http://go.gogoyoko.com/?p=767
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
http://en.wikipedia.org/wiki/Richard_Stallman
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.
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.
Interview with Daniel Ek of Spotify
Henrik Torstensson has posted a great blog post regarding a very thorough interview with Spotify’s Daniel Ek. The interview is well over one hour long and split into eight, approximately 10 minute-videos. The interview itself was done in one of the GlassHouse London events around music. The interview is done by Virginia Eastman of BBC Click.
There is a lot of insight into the Spotify business in the videos as well. Some insights include that less tha 10% of Spotify users pay for premium membership, Spotify is aiming to launch in the US late 2009 or early 2010, Spotify’s secret to success is a great product and getting the music licenses, the goal of the company; to be a platform between the artist and the fan. Have a look at the videos for more insight – these are a great catch for everyone who is hoping to understand more of the business thinking behind Spotify.
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Spotify And SoundCloud Winning At The Europas
The Europas, the inaugural TechCrunch Europe Awards 2009 for European and EMEA tech companies, were held last night in London, UK. Nordic and Baltic countries had a rather strong representation among the nominated startups and consequentially took home no less than 5 out of 15 categories. But these five wins did not scatter around just any startups. Four out of the five were taken home by Spotify and the fifth one belonged to SoundCloud, which has also its roots in Sweden just as Spotify does.
So Sweden truly lead the Northern European pack and really were an example to the whole Europe: Spotify not only took home 5 wins, but more impressively won Best New Startup, Summer 2008-2009, Best Startup Founder(s) and Best Web Application Or Service (EMEA) as well as was given the The Europas Grand Prix award by the 19 expert advisors, which included some industry movers and shakers and which I had a privilege to be included in (consider this as my disclosure). SoundCloud on its part won the Best Entertainment Application or Service (EMEA).
Spotify Aims For €230 Million Valuation
We 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 Pirates Of Sweden
Since the recently held European Election I keep getting questions about the Swedish Pirate Party and the Pirate Bay trial. I agree it might get a bit confusing trying to follow the evolving news on both, and while adding the newly enabled IPRED law to the equation one starts to wonder if, and how, it’s all connected. Here’s a summary hoping to bring some light into the current events. (Note: All link sources are in English, unless otherwise noted, mostly referring to The Register and Wired, who, imho, have been doing a very good job covering both stories outside Sweden.)
Firstly, to clear things up, The Pirate Party is unaffiliated with the Piratbyran, ”The Piracy Bureau”, which lies behind “the world’s largest Bit Torrent tracker”, The Pirate Bay. For example, Peter Sunde, the spokesperson of The Pirate Bay, has never been a member of the Pirate Party and voted for the Green Party at the recent European Election.
As widely reported, the European Election was a huge victory for the Swedish Pirate Party receiving 7,1% of the Swedish votes leaving three other established parties behind, as well as resulting to at least one seat in the European Parliament.
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:
Spotify Opens Up The Door
Both the Spotify and the developer community were absolutely delirious when the news about libspotify, Spotify API, were released on Tuesday evening. At first.
“The libspotify C API package allows third party developers to write applications that utilize the Spotify music streaming service. Hopefully, this will enable and inspire you to build some really cool stuff. We’re looking forward to seeing what you can come up with.“ So far so good.
Then they read the Terms of Service and were not quite as happy.
- “Approved Device” does not include any mobile wireless handset or any other internet-enabled device that is designed to be handheld.”
- “The Application Key must be embedded in your Application, including in all updates and revisions thereto, in a secure manner not accessible by third parties.”
- “Spotify reserves the right in its sole discretion to revoke your Application Key for any reason or no reason, without notice, and to block access to the API and Service by the Application, without any liability to you or your users.”
Are Telecom Providers Finally Becoming Service Aggregators?
ZilliongTV, a Sunnyvale, California based startup, is trying what everybody is talking about. They are trying to build a working model for viewing movies and TV programs over the Internet on demand. Instead of the traditional push, a functioning model for pull. There is already one, Hulu, but Hulu is very(!) much an extension of the big content owners who own the movies and does not work outside the US for this very reason. ZillionTV would be a step towards away from them, even if a small one. In effect, ZillionTV mixes Spotify, Videoplaza and Blyk models.
Just as with Spotify, ZillionTV has partnered with big content owners who are trying figure out how to monetize their content with poor results. What Spotify does for music, ZillionTV tries to do for moviews and TV programs. The vision is nothing short of Spotify’s neither: To secure all the content that’s ever been made in the world. Unlike many others in the IPTV industry, ZillionTV has also something to show as they have some really big companies already onboard (Warner, Universal, Fox and Disney).
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