Is Spotify Looking To Enable CwF+RtB For Musicians?

from the that-would-be-cool dept

There's been plenty of buzz around Spotify, the online music service that is available in Europe, but not in the US. Having played with the product, it's really nicely done, but there's always been a huge concern over whether or not there's a real business model there. The record labels have been notorious for burdening any useful startup with ridiculous licensing terms that make it close to impossible for any such business to survive (let alone profit). Spotify had said it was going to launch in the US, but hasn't been able to, and while the company keeps saying it's close, other reports suggest that the major labels still haven't reached agreements with the company.

However, what's much more interesting is this interview with Spotify CEO Daniel Ek, where he suggests the company wants to branch out well beyond the subscription/ad-based business models and start enabling musicians to offer other business models that sound an awful lot like the CwF+RtB business model we talk about here:
"We want a platform where we can [allow] lots and lots of experimentation. We don't know what will work for an individual artist. Some will benefit from scarcity. Some will benefit from it being widely available, even free. They might make their money by giving away all their music for free ... In the best of world, Spotify will become the platform where you manage your music and because you do that, we will figure out what kinds of offerings you're interested in. For certain types of artists, you might be interested in something unique. You might do a meet-and-greet. It might be that you want it on vinyl because it feels better. Or just go and see the show. Or have the merchandise."
Who knows if Spotify can pull it off (and if it will build this itself, or partner to do so), but this is a much more ambitious play than what's been talked about in the past, and while it's risky, seems like a much better long-term bet.
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Filed Under: business models, cwf, music, rtb, spotify
Companies: spotify

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  1. identicon
    RD, 5 Feb 2010 @ 7:50am


    "Imagine that you take each of the pieces that the labels provide, from management, promotion, booking, inventory control, distribution, image, representation, local, regional, and national contacts, etc... you break each one of them off as a separate business. Now the artists end up contracting each of those pieces out to various companies at a cost, potentially higher because each of these companies has to make a profit on each piece, not on the overall.

    So if you look at things, it would appear that the artists make more money (because the income is paid to them, not a label), but they end up spending all that money (and more, because they would have to spend money to make money, not the other way around). So a band might have to max out their credit cards or mortgage their homes in order to afford to buy services."

    Fair enough, and a reasonable argument. However, the 2 big points you gloss over (ie. ignore) and that has been brought up NUMEROUS times to you in these arguments are:

    1) The big issue isnt that a "label" (or production) is needed, but that they take EVERYTHING from the artist, including their copyright, and rarely pay anything back. So, yes, there is a place for a label (Mike has pointed this out REPEATEDLY) but it shoulnt be to completely rape the artist (as you advocate).

    2) Selling things on plastic discs as the ONLY method of attaining the product is going away, and the labels/industry needs to explore other options. LEVERAGING the internet (and "free", the idea of which seems to short-circuit your brain) is going to become de facto, and the labels can lead, follow, or get out of the way. It WILL happen, legally or not, whether they want it to or not. The question is (and has been): ARE they going to do anything with it? OR are they just going to resort to lawsuits when their current methods get supplanted by the newer ones? Guess which road they have taken so far.

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