I’ve always been what could be considered a bit of an Apple ‘fanboi’. I’ve not really had much of a taste for their consumer gadgets (iPods, iPhones, iPads etc) but I’ll admit I really like their laptops, mice and monitors etc. Even more than their hardware, I love their software – it’s intuitive, easy to use, robust and very often bleeding edge.
This made me think about my brand loyalty, very rarely do hardcore Mac users ever migrate to PC’s, usually for the above reasons. I can’t think of any Mac product or program that I’ve abandoned for a better alternative on another platform — except iTunes. This software went from being horrible, clunky and overcomplicated in the days of Winamp to pretty much the most popular music program available today. (I may have made that up.) The iTunes boom also added to the already rife office one-up-man-ship of “Oh, I have over 84 gigs of music on my computer”. “Really, I have 92 gigs of Indy alone on mine.”
These days have been cut short in our office with the introduction and popularisation of Spotify. I’m still not 100% sure on how Spotify manages its flawless sound quality and uninterrupted streaming of the most eclectic mix of music you’d ever want (for free) but Apple are sure taking a long time to react to it. One can only assume the cost of royalties are covered by the advertisements played on Spotify but can you see Apple’s response running similar advertising campaigns? Knowing their rigorous brand/image protection, I can imagine third party advertising would somehow cheapen their product, which with apple, is the biggest of the big no-no’s.
How are Apple going to quash Spotify’s growing popularity without going down a similar route and making free music economically viable? How are they going to continue earning so many billions from the humble compressed audio format (not just iTunes music store sales but iPod sales also.) As more and more record companies publish their catalogues to Spotify, it’s going to be interesting to see how Apple continues to make the format pay!
Much will depend on whether Spotify can turn what is a very popular streaming service into a business that is actually making money. As I understand it, Spotify at present are relying on money from investors and may have defrayed payments to record labels by giving them a stake in the company. Only time will tell whether Spotify can become a profitable business.
The author answered his own question. Apple is too committed to the fascism of the Gated Community model to ever adopt a model like Spotify. That’s how they blew the PC business 30 years ago, when they had the best PC ever invented but couldn’t bear the thought of having to share the riches of the platform with anyone else. That is how the scourge of Windows got inflicted on us: DOS+ISA was the basis for a much richer ecosystem of buyer options than the Apple Ivory Tower, even though DOS+ISA was an engineering Trabant by comparison. This mentality is also causing them to hemorrhage market share in the smartphone space to the weaker Android offering, again, because people reject the fascism of the Gated Community when given the choice of a richer ecosystem of suppliers. People do not want to trade safety for freedom, no matter how many times fascists insist it is “for their own good”.
Not everyone who listens to music is a geek that sits in front of an office computer all day. The portability of the MP3 format won’t be soon replaced by a streaming model that requires a data connection. All the athletes, runners, triathletes, and others that work outdoors bring their iPod/MP3 player with them and won’t be switching to a service that doesn’t offer portability but chooses their music for them. In addition, this model doesn’t compensate artists fairly and may end up on the receiving end of litigation…from Wikipedia Criticism:
Despite its popularity, the service has come under fire for failing to compensate independent artists fairly. Helienne Lindvall of The Guardian reported that “indie labels… as opposed to the majors and Merlin members, receive no advance, receive no minimum per stream and only get a 50% share of ad revenue on a pro-rata basis.” [60] Swedish musician Magnus Uggla – who is on major label Sony Music – wanted to pull his music from the site, stating that after six months he’d only earned “what a mediocre busker could earn in a day”.[61] Norwegian newspaper Dagbladet recently reported that record label Junior Racing had only earned NOK 19 ($3.00 USD) after their artists had been streamed over 55,100 times.[62]
Luke Lewis of NME points to problems with the Spotify business model, saying he was “convinced the ‘free’ aspect of Spotify is unsustainable” and that if “Spotify is to have a future, it needs to be a viable business”.[63]