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Digital
Ek confident of Spotify model, and US launch
By CMU Editorial | Published on Monday 23 November 2009
Daniel Ek has again said that he expects Spotify to launch in the US early next year, though speaking at last week’s Media Festival in Manchester he was talking “first half of 2010”.
As much previously reported, the arrival of the popular European streaming music service is much anticipated in the US digital music market. Though concerns remain in some American record labels that if they licence a free-to-use ad-funded Spotify service – like in Europe – they might damage the slowly emerging subscriptions market in the US digital music domain. The fact Spotify is struggling to turn its free-service users into paying subscribers in Europe adds to those fears. Some question if the ad-funded free-to-use model is a viable solution for streaming music long term.
Some – most recently research firm Big Champagne’s Eric Garland speaking to NPR – reckon that when Spotify launches in the US it will do so as an exclusively subscription-based service without the free-to-use suck-it-and-see version that has made it so popular over here.
But at the aforementioned Media Festival, Ek talked up his company’s existing model of offering both free and paid-for services. He also argued that his strategy to turn European free-service users into paying subscribers was working, most notably through the addition of the mobile service for premium members (a service further expanded today through the release of a Spotify app for Symbian-based Nokia phones).
Though admitting that the ad-funded model alone is unlikely to work long term, according to Billboard Ek added: “Subscription doesn’t work on its own [either], and that’s been proven for ten years now. But the combination of an ad-funded model and a subscription model does. So far, in terms of Spotify, we haven’t actually spent any money at all on marketing. But what we have done is that we have taken a lot of people in by them using the free service. They start using the free service and then find attractive options that motivate them to become paid users – may be because they want to use the service on their mobile phone, or because they want to have higher volume quality. Enough people have now done this so that we can say that we’re the biggest subscription service in Europe”.
