Streaming LO: Develop understanding of the place of streaming within the music industry, focusing on Spotify as a case study

What is music streaming? Website that offers the user the ability to listen to music but without actually owning the music – they are “online music libraries” that offer easy ways to find music you like (e.g. by genre/artist etc). They often charge a monthly subscription fee, though some offer services for no fee.

Brainstorm What music streaming sites can you think of? Which ones do you use?

Spotify Launched in October 2008 by a Swedish startup company. Currently has 10 million users. Available in most Western European countries. Uses “ad funded” and subscription revenue model: –Users can register for free accounts supported by visual and radio-style advertising – these are now offered by invitation only to manage growth. –Or they can opt for paid subscriptions without ads and with a range of extra features like higher bitrate streams and offline access to music. –During 2010 Spotify paid more than €45m to their licensees. A "Premium" account is required to use Spotify on mobile devices.

Spotify (cont.) Currently has 10m tracks available (growing by 10k per day!). Some artists are missing in certain regions due to licensing restrictions imposed by the record labels: –For example, Oasis and Led Zeppelin are currently unavailable to UK listeners. In March 2009, Spotify began to offer music downloads at £0.99 per track in partnership with the 7digital music store.

Synergy? In April 2010 Spotify gave each user a profile page and allowed users to connect to their friends on Facebook to share playlists and view friends' most listened to artists and tracks. A Spotify application is available for the iPhone. A version for the Blackberry is underway.

Criticisms of Spotify Many music artists have complained that they receive very small royalties for any songs of theirs that are played on streaming sites Helienne Lindvall of The Guardian reported that "indie labels... as opposed to the majors, receive no advance, receive no minimum per stream and only get a 50% share of ad revenue on a pro-rata basis." Swedish musician Magnus Uggla wanted to pull his music from the service, stating that after six months he'd only earned "what a mediocre busker could earn in a day".

What is the place of music streaming in the future? Initial thoughts: –Some people believe music streaming might become a viable alternative to illegal downloading and help the music industry make more money. –Do you agree? Show of hands please – “Would you pay for an online music streaming service?” How do you compare to the Hertfordshire data? –“78% of respondents state that they would not pay for an online music streaming service” –“Even if they paid for an online music streaming service, 49% of respondents said they would still download music” Luke Lewis of NME points to problems with the Spotify business model, saying he was "convinced the 'free' aspect of Spotify is unsustainable" and that if "Spotify is to have a future, it needs to be a viable business".

“Spotify will succeed financially in the future.” –Thinking of all we have discussed watch this video and make notes and the arguments for and against this statement. eCPYshttp:// eCPYs

For and Against For: Fast access Higher quality music than from illegal downloads Choice Advertises music for artists to people who may then buy music Multi-platform availability Potential to expand to other markets (e.g. US, Canada) Against: Sustainable business model?: –Will users grow now free membership is on invite only basis? Think about Hertfordshire data. –Licensing issues (artists not happy at low levels of royalties) Can’t carry the music around on your MP3 etc so cannot listen to it in non Wi-Fi area so will it be used as alternative to downloading?

Plenary Written task – for and against summary?

Quiz Name 3 music streaming sites What year was Spotify launched? How many users does it currently have? What business model does it use? What criticisms have there been from the record industry of Spotify?