Quick Thought: Promoted Posts in Spotify

It’s common knowledge that Spotify isn’t exactly profitable. As avid user, I’ve really liked their latest product introductions: Discover (suggested content from Spotify), Activity (what your friends are listening to), & Direct Artist Following.  With those features and Spotify’s financial struggles in mind, one revenue generating product seems obvious: sponsored content and placements. As we’ve seen with Facebook, it’s much easier to sell advertising inside an algorithmically generated content feed. And with Discover, Spotify has built just that.

Spotify builds a complex profile of your music tastes.  They get the data for that profile from a combination of places: what you listen to, what you add to playlists, what you “like” on Spotify Radio, what your friends and people you follow listen to, etc. So, let’s say I “follow” Justin Timberlake. And listen to his music. And add him to playlists. And on and on. Why doesn’t Spotify sell a placement in my Discover or Activity feed to a similar artist? Preferably, it would be an artist that Spotify’s data shows I will probably like. Or, like Facebook, Spotify should start charging Justin Timberlake to alert me inside Spotify and by email when he releases a new album. That kind of targeted email marketing is incredibly valuable to artists of any stature.

The cherry on top: if done in a clean enough way, promoted/suggested wouldn’t even intrude on user experience. In fact, it could be a genuine value add.

Seems like a layup to me….

P.S. This ad product also allow Spotify to further monetize premium subscribers. It wouldn’t be limited to “free” users.

*** Apologies for grammar, it was a quick thought. I’ll clean it up later***

Playlists Are(n’t) The New Album

Sean Parker is very fond of saying, “Playlists are the New Album.” He’s a tremendous salesman and one of his products, Spotify is in the business of playlists. However, as much as I love Spotify as a tool for music discovery and consumption, I do not love it as a tool for music curation. The reason? Playlists are too much work.

The renowned Venture Capitalist Fred Wilson is a believer in the power of curation. He states, “I’ve got a few simple frameworks for thinking about things. In social media, one of my main ones is the tenet that 1% of the users will create content, 10% will curate it, and the rest will consume it.” In the above linked article, he is making the case that the inclusion of the simple “like” button in Foursquare’s newly redesigned mobile application will allow users to better curate social content, which is vital to the success of the platform. Ease of curation for the user is incredibly important for any content-based platform.

Spotify is inherently different from Foursqaure. It is not a social media platform. It is most fundamentally a music listening service. However, there is a major disconnect in Spotify’s interface between all the content (millions and millions of songs) and the listener. The disconnect, simply put, is that it is hard to discover from and organize all that music into a format I want to listen to.

I am lazy with music. I do not like to take the time to build or curate playlists. Sure, I subscribe to some playlists which are good for music discovery, but the makeup of these playlists is not foolproof. Instead, I am forced to haphazardly toss music randomly into playlists in a disorganized format just to hold onto artists/albums/songs I like. There is not even a basic Itunesesque library function to hold all the music I want to remember from Spotify’s vast libraries.

This disconnect creates a tremendous amount of work for me, the user. It makes curation of my “library” extremely difficult. In addition, it is difficult to navigate within playlists. There is no easy search/sort feature that spans all playlists like in Itunes. I am instead forced to scroll for days. Searching for music is too much work.

The Search Bar Doesn’t Even Function Within Playlists

Sean Parker states that the Playlist is the new Album. He wants to believe it. But in Spotify’s current form, playlists are too difficult. They create too much work. They are difficult to curate, and they cause me, the user (a premium user, at that!) stress and anger. If I, the user, am going to pay for the ability to consume a service’s content, I want the curation to be straightforward and easy.

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Staggered Release Dates

Picture this. You are a fan of the Temper Trap. A big fan. Big enough that you were planning to PURCHASE their new album.  You live in the US. Their new album (self titled) was released in Australia on May 19th. But, the US release date isn’t until June 5th. What are you going to do? Wait for the US release, or simply torrent it, as the album is readily available online due to people in Australia uploading it.

I understand that there are contractual label obligations behind such a decision. But, all staggered international release dates do is hurt the artist financially. If a fan is loyal and rabid enough that they were planning to purchase the album, it means the fan is probably dying to hear the finished product. A few days is one thing, but releasing an album in a major territory weeks after the initial release is foolish, for many of those loyal fans will be impatient and will download the album illegally.

 

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Just Another Industry: The End of the Scarcity Model in Music

The following table examines the components of the music business that made it “perfect” for Internet-based disruption, and the state of those components afterward.

Business Component Pre-Disruption (Perfect Industry) Post-Disruption (No Longer Special)
Promotion Magazines pushing Record Companies’ product: Free Most music magazines have become culture based. Do not have nearly the same pull over readers. People do not need recommendations. They can sample and judge for themselves.
Promotion Radio pushing Record Companies’ product: Free Still relevant, but does not have nearly the same pull over listeners as before. Decentralized by emergence of Internet Radio.
Promotion Television: MTV: Free Advertising Now industry must pay for television advertising, like all other industries.
Promotion/ Distribution Physical Distribution. Chains of independent retailers whose focus was selling Record Companies’ product. Now only physical distribution is big box stores (Target, Walmart, etc.) or Mom & Pop indies. Physical is waning anyway. Digital distribution is not monopolized.
Distribution Controlled by Record Companies: Oligopoly. Distribution now flat. Internet is an equal space, any random musician can have worldwide digital distribution without Record Companies.
Listening Technology Records followed by CDs. High Priced. Cheap to produce. Not copyable. Wears out (must be replaced). Digital copies cost nothing or are cheap. They are easily copied. They do not wear out. Unlimited consumption streaming services like Spotify are emerging.
Costs of Production Used to take enormous sums of money to make a commercially viable album. Now solid albums can be created cheaply with virtual instruments and home studios.
Popularity Principle: Reinforcing Just had to get Album into Top 40 charts to create more sales: Consumer rationale “Must be good because it is selling!” World of niches. People can sample for free, will only buy what they personally like.
Cool Factor Music defines people over long periods of time. Still relevant.