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Business News Digital
Spotify chief talks
By CMU Editorial | Published on Wednesday 1 July 2009
Some interesting comments from Spotify chief Daniel Ek on The Register, who chatted to the IT website’s correspondent and the editor of Impact magazine after speaking at the recent and previously reported AGM of the Music Publishers Association.
Observing that “it’s not hard to do illegal software… Spotify would be the most popular service in the world if it was illegal”, he talked about one of the main motivations behind the popular streaming music service, saying: “It’s sad that the one dominant player, iTunes, doesn’t care about the music industry. We want to be the second company that writes huge cheques to artists”.
While, of course, Spotify is partly popular because of its great user experience, the real challenge in creating a legal service of this type is licensing the music off the labels and publishers. Ek admitted that remained a challenge, saying: “We think the future of the music industry is an access model, where users pay either with their time by watching ads, or through ISPs or carriers, or through buying handsets. What is lacking in the industry now is what can facilitate those kinds of licensing deals”.
Asked about the firm’s ad-funded service, which is by far the most popular of Spotify’s offers at the moment, Ek admitted that while he had no problem recruiting users, advertising revenue was yet to really come in in a major way. Asked if Spotify was on target with its revenue forecasts, the rather open Ek responded: “Not really, to be honest. We’re in one of the world’s worst recessions, and it’s taken longer to get started. We view it as we haven’t really started yet. In four months you can’t build a self-sustaining model, like iTunes”.
As previously reported, numerous industry commentators not party to the deals Spotify has done with the labels and publishers question whether the service can survive once start up capital is spent, especially if rights owners subsequently look to move the firm from any special start up deal to its rate card royalty prices. Nevertheless, most of those commentators hope they can. Time will tell, of course.
