What’s next for Spotify…a prediction

Around the time Spotify first became available in Canada I predicted that Playlists would be come the new Mix-tape. An engaging means for which people could compile music and share it with others. Playlists have now become a driving engagement component when it comes to streaming music. With that prediction coming true, I figured I’d make another prediction. Let me know what you think…

socialcardAccording to a year-end report released by Nielsen this past January, over the course of 2016, streaming became the primary mode of music consumption in the U.S. BuzzAngle also reported that there were more streams on an average day in 2016 than songs downloads for the entire year. (An average of 1.2 billion streams per day versus 734 million downloads for all of 2016)*SOURCE

Streaming has come a long way in a short time. Or has it been a short time? Internet Underground Music Archive (IUMA) launched in January of 1993 as the first free online music archive of Mp3 downloadable songs. More followed, Last.fm (2002), Pandora (2005), Soundcloud (2007), Bandcamp (2008) and with Spotify officially launching in Oct 2008 and not officially becoming available in the U.S. in July of 2011. Even Napster entertained the idea of offering access to their service via a monthly subscription fee back in 2002 so after their peer-to-peer (P2P) service was shut down.

If streaming music has been around, in one form or another since 1993, why did it take so long for it to become the primary mode of music consumption? What was the turning point?

New technologies have always taken a while to catch on and become the norm. The first patent for the compact disc was filed in 1966 and was finally granted in 1970. It would be another 12 years before Philips and Sony would release the first Compact Disc, which was originally developed to store and play only sound recordings. It wasn’t until 1991 that the CD over took cassette tapes for music sales in the U.S.

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In 1917, Finnish inventor Eric Tigerstedt filed a patent for a “Pocket-size folding telephone with a very thin carbon microphone”. The first handheld mobile phone came from Motorola in 1973 and weighed 4.4lbs and in 1983, the DynaTAC 8000x was the first commercially available handheld mobile phone. In 1998, we saw the first examples of media content being available through the mobile phone. In early 2007, Apple Inc introduced the iPhone.

For both the Compact Disc and the Mobile Phone, there was what author Malcolm Gladwell would call a ‘tipping point’. The ‘tipping point’ is that moment where an idea, trend or social behavior crosses a threshold and spreads like wild fire. Was there anything that helped contribute to streaming music hitting its ‘tipping point’ in 2016?

I think Netflix played a role in helping music streaming reach it’s ‘tipping point’.

Netflix helped people come to terms with subscribing to a service to gain access to a catalog of content that you can use. Initially Netflix offered a movie rental by mail service, but dropped the single-rental model in early 2000 and switched focus to a monthly subscription model. Netflix’s ‘tipping point’ occurred somewhere between 2006-2011 as the sales of DVD’s decreased. As Netflix started making various TV shows available, we discovered the joy of binge watching one of our favorite shows. Then in 2013 Netflix debut its first exclusive TV show, the fourth season of Arrested Development, six years after the highly popular show was canceled by Fox. Now, original programming is a major part of Netflix appeal, scoring 91 Emmy Nominations this year, beating out NBC, ABC, CBS and FOX

Monthly subscriptions, binge watching and exclusive original content made streaming services more appealing. As streaming movies and TV programming the became part of our regular TV consumption, people became more open to subscribing to other similar services, for example one that offered access to a massive music catalog.

If you compare Netflix to a music streaming service like Spotify you can see similar trends emerge and if those trends continue, you can also predict what might be next for Spotify.

Netflix offers access to a massive catalog of movies. Spotify offers access to a massive catalog of music.

Netflix created an opportunity for independent films and documentaries to be view by a larger audience. Spotify created an opportunity for independent artists to be heard by a larger audience.

Binge watching TV shows became a new norm thanks to Netflix. Binge listening is technically an option on Spotify. Whether it’s a specific artist, genre or even moods, Spotify offers a playlist for music fans to follow and ‘binge’ listen to.

Netflix now offers exclusive TV series and Movie. Spotify offers…

Could this be the next step for Spotify? Original exclusive music content?

iTunes/Apple Music have the iTunes Sessions, which are typically acoustic performances of an artist’s hit songs, done specifically for the Apple services. The acoustic performance is exclusive to iTunes/Apple Music, but you can still get the artist’s other music on any service.

Netflix original content is not available anywhere else but Netflix.

u2Y40TqWhen similar services like Shomi and Crave TV entered the market, original content like “Orange Is The New Black” and “Stranger Things”, gave Netflix the competitive edge that Shomi couldn’t compete with and forced Crave TV to focus on original content of their own like “Letterkenny” and “Casual”.

It is not likely that any of the major labels will agree to having one of their artists exclusively on Spotify, but much like Netflix picked up and continued cancelled shows like “Arrested Development” and “Gilmour Girls”, could we see Spotify signing deals with artists who have been dropped or whose contracts have expired with a major label? Maybe we will see Spotify ‘signing’ new artists and using their reach to help these artists reach new audiences.

As streaming music continues to grow as the primary mode of music consumption, competition between the streaming services will also increase. We’ve already seen similar services disappear, either shutting down or being absorbed by a larger player in the game. What makes one streaming service different from the rest will be the key to staying competitive in the market. Exclusive content could be a game changer and if labels don’t want their artists limited to which services they’re available on, the way to go will be original exclusive content.

Do you agree? Disagree? Let me know what you think.

Want to learn more about Streaming and how it can impact your business as an artist/band?  Danny Fournier and Oddball Productions are putting on a workshop in Edmonton on July 26. ROCKSTAR 101: UNDERSTANDING STREAMING & HOW TO MAKE IT WORK FOR YOU

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About thef3k

Danny Fournier is a marketing expert with over 15 years working within the music industry, including 5 years with a major label. With university degrees in both Marketing and Sociology, Danny brings a unique perspective to marketing with a strong understanding of the needs of the end user and how to engage them. Along with his music and business background, Danny has worked as a corporate trainer, facilitating and write courses for corporate audiences. Danny has been commended for his facilitation skills and understanding of adult learning.
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One Response to What’s next for Spotify…a prediction

  1. Pingback: A Journal of Musical ThingsRandom Music News for Tuesday, July 18, 2017 - A Journal of Musical Things

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