They’re Swedish!<\/p>\n
Martin Lorentzon couldn’t stop saying how much he loves L.A.\u00c2\u00a0 Because in the winter in Stockholm, it gets light just before nine and dark again around three, and that’s just too little daylight, for too little time.\u00c2\u00a0 If only winter were a couple of months shorter, it would be tolerable.<\/p>\n
Then again, Sweden’s got better cell service.\u00c2\u00a0 You don’t get the dropouts we do in America.\u00c2\u00a0 And the tech companies are more open.<\/p>\n
Speaking of tech companies, Martin made a mint.\u00c2\u00a0 After working for Alta Vista in San Francisco back in the nineties, he started a company in Sweden that…let’s just say it counted data.\u00c2\u00a0 I’m afraid most people reading this wouldn’t understand it if I explained it.\u00c2\u00a0 And there’s your digital divide right there. People who like to win on intimidation and those whose educations allow them a superior vantage point, enable them to move mountains, change worlds, make tons of money.<\/p>\n
And Martin put his millions in with Daniel Ek’s and they founded Spotify.\u00c2\u00a0 Which the labels were glad to extract an advance from, but were surprised actually launched and was successful.<\/p>\n
Are you following their latest products?\u00c2\u00a0 Wherein you can download 3,000 odd tracks to your laptop or mobile device?\u00c2\u00a0 It’s just like owning them.\u00c2\u00a0 Of course, you get this privilege only if you sign up for the premium service.<\/p>\n
And they’ve got software for not only iPhone, but Android and soon BlackBerry, they’re the anti-Apple, they’re not a closed system, they want to play with everybody.<\/p>\n
And they just might end up dominating.\u00c2\u00a0 If the labels will realize that streaming is inevitable and play ball.<\/p>\n
Oh, they’re playing ball so far.\u00c2\u00a0 That breakdown that hit the Web re Spotify’s costs isn’t accurate, they’ve got special deals with the labels, but they don’t go on forever, Spotify’s got to prove its mettle, it has got to generate profits.<\/p>\n
A couple of days back, Martin Lorentzon e-mailed me, he was in town, did I want to get together?<\/p>\n
Normally, I say no.\u00c2\u00a0 It’s a one way street.\u00c2\u00a0 You demonstrate your wares hoping that I’ll help you out.\u00c2\u00a0 But Spotify is revolutionary.\u00c2\u00a0 I was intrigued.\u00c2\u00a0 But I wasn’t sure of the agenda.<\/p>\n
So I showed up at the Mondrian today to find a well-dressed man of forty, voluble, polite and excited.\u00c2\u00a0 Not a passive manipulator, but someone intent on ingratiating himself.<\/p>\n
And after catching up, hearing a bit of history, Martin’s iPhone rang.\u00c2\u00a0 I could see it in big block letters.\u00c2\u00a0 It was Daniel Ek.\u00c2\u00a0 He was coming down.<\/p>\n
Wow.<\/p>\n
Where to begin?<\/p>\n
Spotify employs P2P software, that’s why it’s so damn good.\u00c2\u00a0 It takes 2-5 seconds to ramp up each and every song, which has reduced bit rate during that window, but usually that’s a relatively dead window and the listener isn’t paying close attention anyway.\u00c2\u00a0 Yes, there are tricks.\u00c2\u00a0 Only seventy five percent of the song is downloaded, an algorithm provides the remaining twenty five percent.\u00c2\u00a0 This is how they all do it, it’s de rigueur.\u00c2\u00a0 And the files don’t only come from Spotify’s servers, bits and pieces come from other users with the software installed on their computers.\u00c2\u00a0 Net effect?\u00c2\u00a0 It feels like you own the track.\u00c2\u00a0 Usability is equal to iTunes.\u00c2\u00a0 You can fast forward, rewind, there’s no lag time.<\/p>\n
But that’s on your desktop.\u00c2\u00a0 What about your mobile?<\/p>\n
Well, that’s a bit different.\u00c2\u00a0 You see then Spotify depends on the network.\u00c2\u00a0 Which is why they’ve limited sign-ups in the nations they’ve already launched in.\u00c2\u00a0 They want the streaming experience to be perfect on your mobile device, after all, you’re depending on it, their servers and their wallets cannot be strained.<\/p>\n
But if you want to pay, you can get Spotify instantly.<\/p>\n
And in order to use the mobile app, you’ve got to pay.<\/p>\n
And when you do pay, you can download the aforementioned 3,000 tracks to your hard drive too, which truly is like owning them.\u00c2\u00a0 Of course, if you stop paying, you don’t own them.\u00c2\u00a0 But if you start paying again, they return magically.<\/p>\n
Daniel was focused on the rental issue.\u00c2\u00a0 Needing to make purchase available too.\u00c2\u00a0 I think that’s bullshit.\u00c2\u00a0 You can’t listen to the hoi polloi.\u00c2\u00a0 In America we rented movies on videotape, bought them on DVD and are now renting them again via Netflix and Redbox.\u00c2\u00a0 Who says America is anti-rental?\u00c2\u00a0 It’s all about the user experience.\u00c2\u00a0 And the Spotify user experience is so good, that you don’t need to own once you’ve got it.<\/p>\n
But what about Apple?<\/p>\n
Martin and Daniel wonder too.\u00c2\u00a0 Why exactly did Apple approve their app?\u00c2\u00a0 They gave it a 50\/50 shot.\u00c2\u00a0 But Cupertino said yes.\u00c2\u00a0 Was it because Apple was worried about the backlash or Apple just doesn’t care that much about music.\u00c2\u00a0 Better to take thirty percent of apps than the small margin in\u00c2\u00a0 music. Then again, since the Spotify app is free, there’s no gross to skim from.\u00c2\u00a0 Then again, you can’t stream music in the background on an iPhone.\u00c2\u00a0 If you go to write an e-mail, you lose Spotify.\u00c2\u00a0 Whereas you can listen to your iTunes library while you surf on your iPhone.\u00c2\u00a0 All of which begs the question, will Apple compete?\u00c2\u00a0 Will Apple suddenly roll out a streaming service?\u00c2\u00a0 The guys at Spotify DON’T KNOW!<\/p>\n
But someone will.\u00c2\u00a0 Streaming is going to rule.\u00c2\u00a0 It’s just a matter of when.<\/p>\n
So when do we get Spotify in the U.S?<\/p>\n
At the end of this year or the beginning of next.<\/p>\n
Oh, I get it.\u00c2\u00a0 These guys are in way over their heads.\u00c2\u00a0 They can’t get it together.\u00c2\u00a0 They promise, but don’t deliver.<\/p>\n
Absolutely wrong.\u00c2\u00a0 They could launch tomorrow, they just don’t have all the rights.\u00c2\u00a0 You see a certain company doesn’t believe in free.\u00c2\u00a0 So, they won’t let Spotify launch with the European model.\u00c2\u00a0 But, without the free element, is Spotify doomed to fail?<\/p>\n
Believe me, Spotify wants people to pay.\u00c2\u00a0 They want to integrate so many desirable elements into the paid model that you’ll want to pay.\u00c2\u00a0 Being able to see what stars are spinning, what your friends are listening to.\u00c2\u00a0 Yes, merging social networking elements with music, something absent from iTunes. But you can only convince people to pay if they get to try the service out.\u00c2\u00a0 And so far, other than a handful of the connected, no one in America has Spotify, few even know what it is!<\/p>\n
Daniel felt this was a problem.\u00c2\u00a0 He had to convince the community, the artists and executives.\u00c2\u00a0 I laughed.\u00c2\u00a0 This is like MTV.\u00c2\u00a0 Once you see it, once it launches here, word will spread like fire, people WILL WANT THEIR SPOTIFY!<\/p>\n
Daniel feels he could have 50 million users almost instantly.\u00c2\u00a0 But it’s too soon.\u00c2\u00a0 He doesn’t want to risk messing with usability and doesn’t want to burn through the company’s cash that fast.\u00c2\u00a0 Yes, it costs to stream, not only server power, but licensing fees.\u00c2\u00a0 Also, he wants to tweak the service.\u00c2\u00a0 They showed me some unreleased elements, but they’ve got tons more.\u00c2\u00a0 They want to build it so you will come.<\/p>\n
What a radical change from those in the music industry, and from those in tech a decade ago.<\/p>\n
Ten years ago, the techies were arrogant.\u00c2\u00a0 They wanted to rip off the music industry’s wares.\u00c2\u00a0 The Spotify guys are different.\u00c2\u00a0 They want everybody to make money.\u00c2\u00a0 But they want the time and support to make it happen.\u00c2\u00a0 Honestly, they’re not exactly sure of the business model, they’re figuring it out. They want most people to pay, they want different tiers, but the customer is king, you’ve got to serve the customer.\u00c2\u00a0 Which the music business has not done in eons.<\/p>\n
These are not charlatans.\u00c2\u00a0 These are not guys in it for the fame.<\/p>\n
They are in it for the money.\u00c2\u00a0 But shouldn’t the music industry love them for this, feeling the same way?<\/p>\n
They’re smart.\u00c2\u00a0 They know tech.\u00c2\u00a0 They don’t intimidate physically, they make their moves via their intelligence, which flummoxes the music industry. An industry that likes to bully and rip partners off.<\/p>\n
But is that paradigm truly sustainable?\u00c2\u00a0 In an era where the customer is savvy enough to steal whatever he wants?\u00c2\u00a0 If you think free availability of music can be eradicated, you don’t know dick about computers.\u00c2\u00a0 The only answer is a better mousetrap.\u00c2\u00a0 Spotify is the first step.<\/p>\n
Most people bore me.\u00c2\u00a0 It’s all about them.\u00c2\u00a0 They want to tell me how great they are, why I should endorse what they’re selling.\u00c2\u00a0 But I was positively riveted for two hours.\u00c2\u00a0 I felt like I was at ground zero of the music industry.\u00c2\u00a0 Right there at the source.\u00c2\u00a0 Better than meeting Bob Dylan, who doesn’t talk much anyway.\u00c2\u00a0 Better than hanging with the rock stars of yore who feel they’re entitled, never mind the underschooled and inexperienced nitwits of today.\u00c2\u00a0 As for dealing with the label people, other rights holders, it reminds me of the sixties, there’s a huge generation gap.\u00c2\u00a0 My eyes roll back in my head, I just can’t waste the time.\u00c2\u00a0 But today, in the lobby of the Mondrian Hotel, I was excited.\u00c2\u00a0 These guys want to deliver more music to more people and get them to pay for it!\u00c2\u00a0 And the service is so good, it is worth paying for.<\/p>\n
So I don’t want to hear one naysayer.\u00c2\u00a0 You can still sell tracks at iTunes as a hedge, you can even sell CDs.\u00c2\u00a0 But streaming is the answer and these guys are the cutting edge.\u00c2\u00a0 They wanted the conversation to be off the record, but I insisted it couldn’t be, word has to GET OUT!<\/p>\n
P.S. Let me make this perfectly clear.\u00c2\u00a0 If you’ve got the premium service, you’re not reliant upon a wireless connection to listen to music.\u00c2\u00a0 You can download a little over 3,000 tracks to your mobile permanently (as long as you continue to pay, of course).\u00c2\u00a0 So if you’re in a dead zone, or camping in Timbuktu, you can listen to your music – as long as you can keep the battery of your mobile charged!\u00c2\u00a0 (No, your music doesn’t disappear if you run out of juice, the songs remain, but without power, you’ve got to bang on rocks, you’ve got to make your own music!)<\/p>\n
P.P.S. Please read Chris Anderson’s "Free".\u00c2\u00a0 <\/p>\n
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