Tag Archives: spotify

Future of music: files are over says WME music boss (or, why Apple bought Beats)

In February at the music industry conference Midem in Cannes, Marc Geiger of  WME (William Morris Endeavor), which represents artists across all media platforms, gave a keynote about the future of music. Geiger is head of the music department.

It is from six months ago but only just caught my ear.

Gieger argues that the streaming model – as found in Spotify, YouTube, Pandora and so on – is the future business model of music distribution. File download – as found in Apple iTunes, Amazon MP3, Google Play and elsewhere – is complex for the user to manage, limits selection, and full of annoyances like format incompatibilities or device memory filling up.

With unusual optimism, Gieger says that a subscription-based future will enable a boom in music industry revenue. The music server provider model “will dwarf old music industry numbers”, he says.

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Who will win the streaming wars? Although it is smaller players like Spotify and MOG that have disrupted the file download model, Gieger says that giant platforms with over 500 million customers will dominate the next decade. He mentions Facebook, YouTube, Amazon, Netflix, Google, Yahoo, Pandora, Apple iTunes, Baidu, Android (note that Google appears three times in this list).

Why will revenue increase? Subscriptions start cheap and go up, says Gieger. “Once people have the subscription needle in the arm, it’s very hard to get out, and prices go up.” He envisages premium subscriptions offering offline mode, better quality, extra amounts per family member, access to different mixes and live recordings.

The implication for the music industry, he says, is that it is necessary to get 100% behind the streaming model. It is where consumers are going, he says, and if you are not there you will miss out. “We’ve got to get out of the way, we’ve got to support it.” Just as with the introduction of CDs, it enables the business to sell its back catalogue yet again.

A further implication is that metadata is a big deal. In a streaming world, just as in in any other form of music distribution, enabling discovery is critical to success. Labels should be working hard on metadata clean-up.

Gieger does see some future for physical media such as CD and DVD, if there is a strong value-add in the form of books and artwork.

You can see this happening as increasing numbers of expensive super-deluxe packages turn up, complete with books and other paraphernalia. For example, Pink Floyd’s back catalogue was reissued in “Immersion” boxes at high prices; the Wish you were Here package includes 9 coasters, a scarf and three marbles.

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This sort of thing becomes more difficult though as consumers lose the disc habit. If I want to play a VHS video I have to get the machine down from the loft; CD, DVD and Blu-Ray are likely to go the same way.

Geiger’s analysis makes a lot of sense, though his projected future revenues seem to me over-optimistic. People love free, and there is plenty of free out there now, so converting those accustomed to playing what they want from YouTube to a subscription will not be easy.

That is a business argument though. From a technical perspective, the growth of streaming and decline of file download does seem inevitable to me (and has done for a while).

Listen to the talk, and it seems obvious that this is why Apple purchased Beats in May 2014. Beats offers a streaming music subscription service, unlike iTunes which uses a download model.

Why Apple needed to spend out on Beats rather than developing its own streaming technology as an evolution of iTunes remains puzzling though.

Finally, Gieger notes the need to “put out great music. After we all have access to all the music in the world, the quality bar goes up.” That is one statement that is not controversial.

Here is the complete video:

Amazon AutoRip: great service, or devaluing music?

Or possibly both. Amazon’s AutoRip service means that when you buy one of a limited, but considerable, range of CDs, you get an MP3 version in your Amazon cloud player for free. Even past purchases are automatically added, which means US customers have received emails informing them that hundreds or in some cases thousands of tracks have been added to their Amazon cloud player.

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The service adds value to CD purchases in several ways. You get instant delivery, so you can start listening to your music straight away, and when the CD comes in the post, you can enjoy the artwork and play it on your hi-fi for best quality.

Amazon is differentiating from Apple, which only sells a download.

An infernal creature lies in the details though. Here are a few comments from Steve Hoffman’s music forum:

Got Auto-rip Pink Floyd’s DSOTM 2011 mastering of the DSOTM SACD that I bought in 2003.

and

I now have autorips of cd’s I no loner own…..interesting concept.

and

I now have autorips of CDs I bought as gifts.

These customers have done nothing wrong. They bought a CD from Amazon and gave it away or sold it, but it is still in their Amazon history, so now they have the MP3s.

Another interesting point is that Amazon appears to treat all versions of the same recording as equal. This is why I have included the comment about the Pink Floyd album above. Record companies have done well over the years by persuading fans to buy the same CD again in a remastered version, sometimes with bonus tracks. The Beatles 2009 remastered CDs are a well-known example. But if customers with unremastered CDs are now getting remastered MP3s automatically, this type of sale is harder to make.

The gift issue is more serious. The terms and conditions say:

Albums purchased in orders including one or more items marked as “gifts” at purchase are not eligible for AutoRip.

and intriguingly:

If you cancel your order or return this album, our normal order cancellation and product return policies will apply regarding the physical version of this album. However, if you download any of the tracks on the MP3 version of the album from your Cloud Player library (including if you have enabled auto-download to a device and any of the tracks on the MP3 version of the album auto-download), you will be considered to have purchased the MP3 version of the album from the Amazon MP3 Store and we will charge your credit card (or other payment method) for the then-current price of the MP3 version of the album (which will be non-refundable and may be a higher price than the physical version of the album).

Someone therefore has thought about the problem, though I predict unhappy customers, if they buy a faulty CD, return it, and find they have been charged anyway thanks to an auto-download feature of which they might not understand the implications.

Note also that many CDs are purchased as gifts without being marked as gifts in Amazon’s system. The idea of marking items as gifts is that you can have gift wrapping and get an item sent to another address, but if you plan to do your own wrapping, it is not necessary.

Here is something else. Audio enthusiasts are not happy with MP3s, preferring the real and/or psychological benefits of the lossless CD format for sound quality. For many people though, the audio is indistinguishable or they do not care about the difference.

What do you do if you receive a CD in the post, having already downloaded and enjoyed the MP3 versions of the tracks? I imagine some customers will figure that they have no use for the CD and sell it.  Provided they do not return the CD to Amazon, I cannot see anything in Amazon’s terms and conditions that forbids this, though I can see ethical and possibly legal difficulties in some territories.

The consequence is that someone may lose a sale.

Subscription is the future

My view on this is simple. The only sane way to sell music today is via subscription – the Spotify or Xbox Music model. The idea of “owning” music (which was never really ownership, but rather a licence tied to physical media) is obsolete with today’s technology.

Amazon’s new initiative demonstrates how little value there is in a downloaded MP3 file – so vanishingly small, that it can give them away to past customers for nothing.

Farewell to the Squeezebox

It looks as if Logitech has discontinued the Squeezebox, a range of devices for playing music streamed from the free Logitech Media Server. Logitech also runs a streaming service on the internet, Mysqueezebox.com, which supports internet radio, Spotify integration and more.

The Squeezebox devices are no longer on sale on Logitech’s web site, and a press release announces the Logitech UE range. This includes wireless speakers which play music via Bluetooth, a Smart Radio that connects to internet streaming radio and other services, earphones and headphones.

But what of Squeezebox? Here is the nearest I can find to an official announcement:

We’ve just announced our new brand, Logitech UE, and with it merging the design/engineering capability of Logitech and the Squeezebox product with the music know how of Ultimate Ears. We are positioning this new brand to serve music lovers across a wide range of music listening device, and amongst them the Logitech® UE Smart Radio.

Important for you to know, The UE Smart Radio can play alongside your Logitech Squeezebox products, but will operate and be controlled separately and will no longer receive updates. The team is working hard on releasing in a few weeks an optional software update for existing Squeezebox Radio users. This update will allow Squeezebox Radios to upgrade to the new Logitech UE Smart Radio experience.

Rest assured that the Squeezebox platform you’ve been enjoying over the years will continue to provide you access to a rich world of music and we’ll continue to address any questions or troubleshooting on our Logitech.com support page.

The news is sad but not surprising. Logitech is struggling with declining revenue and losses, and there are various reasons why the Squeezebox system no longer looks strategic. It works alongside iTunes but does not fit all that well with Apple products, it has always been a little bit too techie, and the era of filling huge hard drives at home with your music is probably in decline, thanks to internet streaming. I have been meaning to post about the good results I get from Google Music on the Nexus tablet, and of course there is Spotify.

I still love Squeezebox. If you want the uncompromised quality of lossless audio combined with multi-room support, where each player can play something different, it is a fantastic and cost-effective system. The Squeezebox Touch, reviewed here, is appreciated by audiophiles for its high quality audio.

Squeezebox might still be a viable for a company like Slim Devices, the original creator of the system, but makes less sense for a mass market company like Logitech, which acquired Slim Devices in 2006.

My thanks to the Squeezebox team for transforming audio at home for me and thousands of others.

Update: if you are wondering what is the future for Logitech Media Server (LMS) see this thread which has comment from a Logitech engineer. There is a new media server called UE Music Library (UEML) which is simplified compared to LMS and has no player control: the UE Radio can simply select music from the library and play it. No random play in UEML. UE Radio will not play music from LMS as far as I can tell. LMS is not going to receive major updates but will be supported with maintenance fixes for the time being.

An ugly dialog from Spotify

I am a big fan of Spotify, mainly because it works so well. Search is near instant, playback is near instant.

I understood when, under pressure from the music industry, it limited the value of the free version by restricting the hours of play and the number of times you can play a specific track.

This is ugly though:

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Spotify says:

From today, all new Spotify users will need to have a Facebook account to join Spotify. Think of it as like a virtual ‘passport’, designed to make the experience smoother and easier, with one less username and password to remember. You don’t need to connect to Facebook and if you do decide to, you can always control what you share and don’t share by changing your Spotify settings at any time.

Why care? Privacy? Because you might want Spotify but not Facebook?

I would put it another way. I am wary of putting Facebook at the centre of my Internet identity. If others follow Spotify’s example and the Web were to become useless unless you are logged into Facebook, that would give Facebook more power that I would like.

If for some reason you want to withdraw from Facebook, why should that affect your relationship with Spotify? It is an ugly dependency, and I hope that Spotify reconsiders.

See also Cloud is identity management says Kim Cameron, now ex-Microsoft.

Warring models of music distribution

How should we pay for the music we listen to? In the digital, internet era, it seems to me that there are three business models.

In the first model, you pay for a lifetime right to each album or track you want to add to your collection. This is the most similar to what we are used to from purchasing physical media like records or CDs. You do not own the music of course; all you have ever purchased is a licence to listen to it.

Until now the digital equivalent has been downloads as offered by Apple iTunes or Amazon’s MP3 store. However, Apple has now announced iCloud, which extends this model to de-emphasise the actual download. You download a track to play it on your device, but there is no problem if you have more licenced tracks than you have space for; you can just download the ones you want to play. You can also “upload”, but when you do this, you do not really upload the tracks, but rather just inform iCloud’s database that you are licenced for them.

The second model is where you subscribe, giving you the right to play anything that your music provider has to offer. The most successful example is Spotify, which has a superb client for Mac and PC that offers near-instant playback of any of 13 million tracks.

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An advantage of this approach is that it is naturally social. Since everyone has access to the same library, you can share playlists easily.

The third model is where you do not pay at all. In pre-digital days, you could listen to the radio or swap tapes with friends. Now almost anything is available, legally through Spotify (though now restricted to 2.5 hours per week and 5 times per track), or illegally through countless sites easily found through Google, or through copying your friend’s hard drive stuffed with music.

Personally I am a fan of the second model. I think musicians should be rewarded for their work, and that all-you-can-eat licencing is the best and fairest approach, taking advantage of what technology enables. Buying a lossy-compressed download with a restrictive licence is also poor value compared to buying a record or CD.

I get the impression though that the music industry is set against the subscription approach. Apple seems reluctant to embrace it, hence iCloud is still tied to the first model. Spotify still has it, but the company now seems to be putting increasing emphasis on downloads and locally stored music, which is strange given its original concept, as well as making its ad-supported free streaming account less attractive.

The business reasoning, I guess, is a belief that selling music piecemeal is more profitable, and exploits the collecting instinct that has served the industry so well in the past.

The risk is that the third model will sweep it aside.

Why Spotify should stick to streaming, not copy iTunes

Today Spotify announced iPod support. Essentially it has reverse-engineered enough of the Apple iPod’s protocols to let you connect an iPod and sync a Spotify playlist to it.

The catch: in order to sync a playlist you have to buy MP3s for all the tracks it includes.

Spotify has great software and I love the service, though sadly it is now crippled for free users. It already supports smartphone users through an offline feature, combined with a mobile app, though this requires a premium account.

The new model is different. Instead of being an offline cache for streamed music, it is old-style MP3 purchase. In fact, the promotional video presents the new feature in simple terms: you can now purchase and download your Spotify playlist.

So what is Spotify now? A streaming service, or a download service? Was the crippling of the free service done with this in mind, to push users towards MP3 purchase? Is this another symptom of music industry pressure? Will Spotify further cripple its streaming service, to promote download purchases?

Personally I have little interest in yet another MP3 download option. For iPod or iPhone users, Apple iTunes wins on usability and integration, Amazon MP3 on price.

I have great interest in subscription though. Spotify has been liberating in this respect. Want to play something? Just search and play, instantly. That is what Spotify does so well. It should stick with it, rather than moving back into the download era.

First encounter with Spotify sixth play bar – but what is the reason?

When I fired up Spotify today I was greeted by this large banner:

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Free listening has gone, unless you are happy not to have repeat listens. After five times, that’s it.

I sacrificially endured playing Winchester Cathedral by The New Vaudeville band five times over. I discovered that simply starting a track does not seem to count. On the sixth attempt to play the full track though, I got a slightly modified version of the above banner, and then a message along the top of the Spotify app:

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As a point of interest, this particular track is on a large number of different compilations of 60’s compilations. Spotify seems to consider each appearance a different track. So I was able to endure a sixth play of the track by picking a different compilation.

Why has Spotify made this unpopular change? The suggestion in the official blog post is that it was forced upon the company, either by financial necessity or the insistence of the music industry:

It’s vital that we continue offering an on-demand free service to you and millions more like you, but to make that possible we have to put some limits in place going forward.

There are over 9000 (mostly negative) comments post, but as far as I can tell no further official comment there.

Spotify’s chief content officer Ken Parks was available for interview and quoted by various sources; for example he told the Reg:

We’ve shown that the model is doing extremely well, but as things stand we need to tweak the service to ensure everyone has access to legal music in the long term.

Similar tone, but still no hard information. As for CEO and founder Daniel Ek he tweeted:

Things are not always what they seem…

which if it means anything means “watch this space” I guess.

The affect of the change is easy to predict. There will be more subscribers, but fewer users. Spotify will be less attractive to advertisers, but will get additional subscription income. Since it is still a good deal with the basic subscription, I would expect income to increase overall, but that is only a hunch.

I like Spotify’s performance and usability. The one thing I have against it is the annoying tendency of tracks to disappear suddenly. I played Paul Simon’s latest, So Beautiful or So What, on the service and enjoyed it. Then the next day it had disappeared. Even subscribers to the unlimited service do not get everything, only those tracks which the various rights holders permit.

Spotify is now less free but still a better deal than Apple iTunes

Spotify’s Daniel Ek has announced restrictions to Spotify’s free edition:

  • Users will be able to play any track for free up to 5 times only
  • Total listening time for free users will be limited to 10 hours per month

The changes are presented as a necessity:

It’s vital that we continue offering an on-demand free service … but to make that possible we have to put some limits in place going forward.

You can easily escape the restrictions by subscribing to the unlimited service at £4.99 per month (or equivalent in your currency), or the Premium service at £9.99. Unlimited offers music without advertisements, while premium includes mobile and offline music, and a higher bitrate of 320 kbps.

While it is a shame to see free Spotify become less attractive, the free and premium services are well priced. For the cost of one album per month you can play anything on Spotify’s service as often as you like. The main downside is that there are gaps in what is available. Over time, my guess is that either Spotify will win the argument and the business, and those gaps will be filled; or of course it may fail.

Spotify’s problem is that it has to pay even for the music that is streamed for free. That is always a difficult business model, and it seems that advertising is not enough to pay for it at the rates the music companies require.

If the restrictions result in a surge of new paid subscriptions, this may even work out well for the company, though the service is still not available in the USA.

Personally I think Spotify is inherently a better deal than iTunes downloads, for example, which offer an unlimited license but only on a track by track basis and with no resale value. Anyone who still buys music is likely to spend less with Spotify, and to get more choice. The subscription model is the only one that makes sense in the internet era.

At the same time, I can understand why the music companies want to maintain a high price for streamed music. They are playing a high-risk game though, since by making legal music more expensive and adding friction, they make illegal music more attractive.

For example, there is now more incentive for a user to record a favourite track during one of their five free listens, and never pay for it again; or to get the tracks they want from a friend’s ripped CD – both actions that are untraceable.

Amazon introduces its cloud player – but Spotify makes more sense

Amazon has introduced its Cloud Drive and Cloud Player. Cloud Drive offers 5GB of online storage free, with further storage available for a fee. For example, an additional 15GB costs $20 per year, and you can have a full 1000GB for $1000 per year.

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Having said that, a note in the FAQ says that:

The 5 GB free storage plan is available to all Amazon.com customers, however further upgrades to the storage plan are currently unavailable in the following countries

where the list is of countries in Europe including the UK.

The Cloud Drive looks nicely implemented except that there is no provision as far as I can tell for sharing. It is an odd omission, unless Amazon sees Cloud Drive as mainly for storing personal music and media purchases and wishes to discourage breach of copyright, so I am guessing this is the case. This does make rivals like Microsoft’s SkyDrive more interesting for general cloud storage though, particularly as you get 25GB free with SkyDrive.

So on to the Cloud Player. There are two versions, a web player that is part of Cloud Drive, and an Android player which is part of the Amazon MP3 application. My first attempt at using the web player failed – US customers only:

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However, when I uploaded some MP3 files to the Cloud Drive they played fine in the Cloud Player:

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I tried the Android player briefly. It worked well with MP3s already on my device, but I have not yet attempted to sign into the Cloud Drive.

There is no player for Apple iOS and when I visited the site in mobile Safari even the web player did not appear, though this may be another UK/USA issue.

Naturally Amazon is encouraging use of Cloud Drive and Cloud Player with its MP3 store. The idea is that you no longer need bother to download MP3 files. Just store them in Cloud Drive, and play them wherever you are, though download remains an option either on purchase or later from the Cloud Drive.

A few observations. Cloud Drive is a welcome feature, though it is nothing new and crippled by lack of sharing capability. Other applications built on Amazon S3 cloud storage do include the ability to share files.

Cloud Player enhances the Amazon MP3 store and I suppose is worth having, though I am sceptical about this model of music purchase. Once you have moved the focus of music storage from local drives to the cloud, and playback from the local network to cloud streaming, then a subscription model that offers everything available on the service makes more sense. This is what Spotify does successfully, though I appreciate that not all music is available on Spotify, and that some countries including the USA cannot use it.

I wonder what happens when you store an MP3 purchase in Cloud Drive? Does Amazon really store a separate copy for every user, or does it simply link to its master copy so that it appears to be in your personal space? The latter would save storage space; and the idea shows that technically it might not be difficult for Amazon to transition from a model based on individual track purchase to one based on all-you-can-hear subscription.

Agreeing this with the music labels and making financial sense of such a deal is another matter; but I hope that this new Cloud Player is a step in that direction.

Spotify everywhere: now on Logitech Squeezebox as well as Sonos, Smartphones

Spotify, the music streaming service, has announced a partnership with Logitech to enable subscribers to play music via Squeezebox. Logitech already has a partnership with Napster for a similar service, but Spotify is winning in terms of usability, ubiquity and mind share.

It follows a similar agreement last September between Spotify and Sonos, a Squeezbox rival. The company has also announced support for Windows Phone 7, which joins Apple iPhone/iPad, Google Android, and Nokia Symbian among supported smartphones.

Spotify is available for free on a PC or Mac, but supported by advertising, making it like a commercial radio station where you choose the music. However only paying subscribers get the benefit of using the service from these other platforms.

In my view streaming is the future of mainstream music distribution, so I see this as significant. Why pay for downloads, when you can choose from a vast catalogue and play what you want when you want?

The main snag with Spotify is that some artists are not available on the service, and some countries (including the USA) cannot get Spotify. Still, if it builds a big enough customer base, the music industry may find it cannot do without the service.