Spotify unveil the future of music

Ad supported music streaming service Spotify has been talking about its plans to go mobile for a while now and judging by this clip of the work in progress Android app those plans are coming along very nicely indeed!

The liberation of Spotify from the desktop and onto mobile marks not only a revolution in music consumption but may also gives us a clue as to what the future "networked" home might feel like.

The key challenge facing the music industry is often defined as the battle of paid-for content vs. pirated content but I think what is really going here is a shift away from models of consumer ownership to models of consumer access.  In the old days you had to own a physical copy to be able to play something whenever you wanted.  Its clear from technology such as this it is that ownership - whether physical or digital - is not necessary or even desirable (given the needs to store & manage a library).  Perhaps I'm being a little optimistic here, but prevalence of illegal peer-to-peer networks could be seen as a transitionary phase in the march towards this model of "always on" access.  When you can get what you want whenever you want why go through the bother and risk of accessing these illegal networks?

The music business has long been accused of missing the digital boat when Napster first revolutionised the industry but its support of services such as Spotify and we7 show it is they who are leading the way as to how the digital future may look for the cultural industries.  With Sky rumoured to be soon launching a music streaming service (Sky Songs), its not hard to imagine a scenario whereby all music, TV, film etc is delivered via the internet to a single home receiver that then wirelessly connects to your TVs, hi-fis, computers and mobile devices.  With people like Sky then in control of distribution it would then appear that labels can get back to concentrating on marketing and building artist brands.  With consumers facing unlimited choices, getting them to find your artist will then be the major issue facing labels rather than losing sales to the pirates.

Empire of the Sun make interactive promo video

While MGMT-ites Empire of the Sun prefer to look backwards when it comes to musical inspiration, their new promo video is distinctly forward looking.

Viewers are encouraged click on sun logos that appear throughout the video in order to unlock exclusive content and enter a various competitions.

With different suns leading to different pieces of content or codes, the promo works as a kind of treasure hunt which, while engaging, ultimately distracts you from the video itself. It also appears that the interactive functionality works only on EOTS's own website and therefore they will still have quite a bit of work to do to drive views.

That said this is a novel approach to viewer engagement, data capture and a welcome innovation in music video that is therefore surely a step in the right direction. With laser precision brand fit partnerships and sensitive implementation, this type of technology could represent a new way for artists & labels to monetise their content.

Free is great. But what is better than free?

Kevin Kelly writes in a great blog (Better than free) that the internet is essentially one big copying machine. Furthermore, as the internet allows the infinite free flow of these copies, they become (financially) worthless. A pretty good summary of the fundamental problem facing the recorded music business I think.

According to KK, it is the things that can't be copied that become scarce and valuable. I won't explain the detail here, but these "things" (he calls them generatives) can be summarised as: immediacy; personalisation; interpretation; authenticity; accesibility; embodiment; patronage; and findability. It is within these qualities that the future business model for recorded music must reside.

The release last week of Depeche Mode's new album Sounds of the Universe is a great example of how this kind of thinking can protect (grow?!) revenues in this new world. Crucially this approach rewards producers by creating a better experience for the consumer - surely the goal for all marketing / product design.

As well as the now typical offering of standard CD or special edition CD+DVD options, the new release formats also included a limited edition box set and more innovatively an "iTunes pass" mechanic in the states (the first time this has been offered against a music artist).

After paying a one-off $19 (c. £13) the iTunes pass enabled fans to access a continuous stream of exclusive content prior to the official launch date. All of this exclusive content was downloaded directly into pass-holders' iTunes libraries as soon as it became available. This one mechanic delivers immediacy, authenticity, accessibility and patronage and is can therefore be viewed as a compelling alternative to pirated content. It will be interesting to see if this mechanic is continued on an artist by artist basis or whether this is a pre-cursor to a new subscriptions based model for iTunes (as opposed to current a la carte model).

Turning to the box set, the sheer scale of the offering is a perfect example of embodiment - the polar opposite to a formless digital download. Authenticity is literally achieved through the inclusion of a numbered certificate in the box (this definitely one for fans!).

This is all great in theory but what were the results? Although week 1 sales for this album were down 6% compared to their last release (2005's Playing the Angel) some rudimentary calculations show that although average CD prices have also fallen over the period (I have assume from £10 to £8 for ease) that total week 1 revenues are broadly on a par. Not a bad result considering an overall decline in the album market of some 30% (volume) over this period.

Although the super premium box set is of course not an option for all artists, I think the ideas above are a good illustration of where you can get to when you start to think about how you can compete with free rather than simply try to shut free down.