FREEMIUM

Rhapsody, MOG, Rdio… Features don’t matter, the barrier to entry was too high.

This is EXACTLY like music. This is the power of free.

Get people to listen first, charge them thereafter, once they’re hooked.

Don’t play the rights holders game, don’t give people what they want, don’t play in their sandbox, but stretch them into yours.

Subscription services have existed forever. If you’ve got a Sonos system, and you should, they’re essentially interchangeable. But no one checked them out because the barrier to entry was too high.

Apple taught us with iTunes that’s important to know who your audience is. Apple’s strength is it’s got everybody’s credit card information, it can sell to them with one click. Spotify now has everybody’s e-mail address, it knows who its customers are, it can reach them.

And once you’ve lowered the barrier to entry what is selling your product is quality, it’s just that simple. This is the opposite of twentieth century marketing, whereupon once you’ve broken into a limited universe, you’ve won. That’s thinking there’s only twenty five songs on the radio and yours is one of them and people will get it and buy it based on repetition. We don’t sit through most YouTube clips. You’ve got to catch us immediately and keep us. Don’t launch before you’re ready. You don’t have to be perfect, but pretty damn close.

Spotify launched for free and now everybody is talking about it and it’s converting free users to paid users. It killed the competition overnight. Got people to embrace rental, which conventional wisdom said they would not, overnight.

You’re selling Spotify. Each and every one of you. The company created the product, but you’re the marketing team. You’re incentivized by nothing so much as a desire to turn friends on to something incredibly cool. And since all of us are networked, we all live in a virtual high school, word spreads immediately and can become gargantuan overnight.

USABILITY

You need no tutorial. It’s not about additional features, it’s about being able to jump in and experience the greatness immediately.

Don’t frustrate users. Don’t listen to techies who say what you don’t have. Apple’s products don’t have plenty, but Apple’s poised to become the most valuable company in the world. Beware of feature creep.

COMMENTARY

I find the analysis in so much of the straight press hilarious, they just don’t get it. It’s like sending a Carpenters fan to a Metallica show. These same bozos comment on every news story that comes down the pike. Yesterday it was Spotify, today it’s Murdoch, tomorrow it will be their pets. We only listen to trusted advisors. The straight media is last, generalists are passe in a world where the words of true experts are easily available online.

Spotify got this right by seeding tastemakers, getting them on their side, and allowing these trusted sources to spread the word, to get you to pay attention.

Daniel Ek can be cerebral, Shakil Khan is equally smart, but fun. He’s got a gleam in his eye, he gets you on his side.

In other words, if you’re launching a company that depends on persuasion of intermediaries, that is not going directly to the public, you need a consigliere.

MUSIC DISCOVERY

The number one complaint of the uninformed. That’s like complaining a Formula One race car doesn’t have cupholders.

I’m gonna let you in on a secret. Music discovery is a completely different animal. And it won’t be based on algorithms, but human choice, trusted sources.

Build the platform that tells us what to listen to and you too can be rich.

This is an opportunity for old music business denizens. Techies are usually soulless. They think in ones and zeros. Music is about emotions, about feel, something no machine can quantify.

Future tastemakers will realize they can sell no tuneouts. Because of myriad options, you’ve got to gain people’s attention and keep it, via quality. After you gain their trust you can expand their horizons, but not before.

DAVID HYMAN/MOG

I’ve got no investment in Spotify, it does not need to win. The future lies with the company that knows access/streaming is the future, understands freemium and has a superior product. This is what David Hyman, head of MOG, e-mailed me:

From: David Hyman
Subject: for the Lefsetz mailbag…

Hi Bob,

I highly recommend you use our mobile app for 10 minutes. Then use the Spotify mobile app. Mobile is critical as it’s the service people are actually paying for!

And on web, be sure to use our latest player at http://mog.com/m  

We’re giving our users options of using this new html5 player, or our older one which has more features, but isn’t as blazing fast as this one.

NIckel Summary Breakdown on MOG versus Spotify

Spotify makes you work, MOG works for you.

Spotify demands users make playlists. You can search for stuff, sure, but unless you want to do a LOT of searching every time you want to play something, you’ll be making playlists for the things that matter.

You can’t, however, search playlists other users have made. They can only send them to you.

Spotify’s "Starred" tracks have minimal organization, which also makes managing any kind of personal collection a hassle.

Spotify has a decent social integration as long as your friends are on Facebook, are into music you like, and are using Spotify. Even then, if you want to share, you do work. If your friends want to share, they do work.

Good things about Spotify:

Fast playback start times on desktop. Try MOG. A hair slower.

Robust "Free" offering. Watch this space. MOG rolling out our own version of freemium soon.

Spotify allows local file playback in its desktop client and mobile apps

Spotify is basically a pile of music with a search engine and some Facebook links on it.

MOG works for you.

MOG Users can publish playlists which every other user can search for and find (this functionality is coming soon to MOG’s mobile apps). MOG’s playlists are also available right from relevant artist pages.

MOG has better than pandora radio powered by our mobius technology,  providing users with a slider that let’s them blend in similar artists based on a seed artist.  Listen to true artist only radio or a blend with similar. Save songs to favorites from radio.  Nothing comes close to this.

MOG’s "Favorites" and "Downloads" are viewable and sortable by artists and albums – the way users expect. Spotify gives you flat lists. Use our new player at mog.com/m  .  I think our favoriting user experience is unmatched and is far ahead of the competition.

MOG makes downloading easy on a mobile phone. Search for an album, press the download button.

Spotify makes you work – search for album on the desktop, add to playlist, go to playlist, "sync" playlist.

MOG’s new "Just For You" and "Inspired By Your Friends" instant personalization features when logging into MOG via Facebook Connect has no analog on Spotify. Again, MOG is working for you, Spotify is making you work.

Spotify’s search doesn’t do typeahead, MOG’s does. Compare Search!

MOG’s radio feature is tightly integrated in ALL MOG clients, including mobile apps. MOG works to bring you new music.

MOG is now built into all new LG, Samsung, Vizio lcd tvs and blu rays, as well as Roku and Sonos.  And soon all BMWS and Mini’s.

MOG has full catalog in 320kbps.  MOG lets you stream 320kbps and download 320kbps files in our mobile apps.