Thursday, 11 February 2010

Warner to pull out of Spotify?

Warner Music has said it will stop licensing its content to ad-funded streaming services like Spotify, We7 and Lastfm.

Surely this is a backwards step to be taking just weeks after Spotify has been publicly backed by Universal and its premium service has achieved its target of signing up 10% of its users in all but two of the countries it is operating in. I suspect the chairman of Warner has lost his nerve ahead of the imminent US launch of the site. If he really didn’t want to bet the farm on streaming services, why not introduce get-out clauses into Universal’s participation if the US product does not do as well as Spotify hope. The US was always going to be the key market for Spotify, so to cancel on the eve of its launch makes Warner look pathetic, especially when, as yet, none of the other majors look set to follow suit.

Warner, and every other music label, need to wake up to the fact that there is a generation who consider the traditional model of buying albums as a ludicrous, they should be doing all they can to support services like Spotify and make them into viable business models if they are really serious about putting an end to illegal music downloads. It’s interesting to note that Warner chief executive Edgar Bronfman Junior’s alternative to Spotify is to “promote services that require payment”, maybe I’m missing something here, but isn’t that what he is denying Spotify the chance to become?

Like it or not Ed, some people will never pay for music, they are douchebags, but what can you do? Well, for a start you could try and wring some value out of those who sign up for free streaming services but don’t actually buy music. A sizeable proportion of that group will probably buy music merchandise or gig tickets, so why not make it a condition of the free streaming service that users receive say, five emails a week, about tours/merchandise of the 10 bands they stream the most music by. The success of Bandcamp has already proved that people are willing to give their details to a scheme like this to get access to streaming services. This wouldn’t be too difficult to implement either; if google can pin down search demographics involving the whole internet for advertisers to exploit, surely a streaming music site can do so within its own domain.

In short Eddie my man, the way people consume music is changing, and you can’t stop that process, what you can do is deal with the cards you are dealt and make some money from the changes. In case you are reading, I have attached a link to the bandcamp website below so you can see what an innovative web music portal looks like. Enjoy.

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