Music fans will buy songs, says head of free online music site Spotify
Record sales are down, illegal file sharing persists and a whole generation is getting used to enjoying music for free.
But Daniel Ek, the man behind Spotify, the world's fastest growing online music service, is convinced that fans will still pay for songs they love if they are packaged in the right way.
In one of his first interviews since the British launch in February of the "online jukebox" which allows users to listen to songs instantly for free in return for occasional adverts, Ek outlined a new blueprint for the music industry.
Ek is confident that the future is bright if the music industry seizes the digital initiative. "If you truly connect and empower your fan base, people will pay for music. Perhaps that revenue won't come primarily from selling records, but ad-supported music services, subscription music, downloads, merchandise and live shows as well as CD sales are all going to make money for labels and artists," he told the Guardian.
Today Brighton's new music festival and convention The Great Escape - think South by Southwest by the seaside - announced that Ek will share a stage with Patrick Walker, director of video partnerships at YouTube/Google at the event next month.
The pair will discuss new ways of making money and halting the decline of the music industry. With Spotify seen by many as the most important digital tool to hit the music industry since Napster, and YouTube embroiled in a rights row after removing all premium music videos from its site, it promises to be explosive, said Martin Elbourne, founder and creative director of the Great Escape. "YouTube is now bigger than MySpace for the music industry and Spotify is seen as its potential saviour, to have them sharing a stage is very exciting," he said.
Bands who have grasped the digital nettle include Radiohead, who turned the industry on its head when they invited fans to pay what they liked to download their album In Rainbows and Coldplay, who released their first single Violet Hill off their new album Viva la Vida exclusively on their website for one week. The album's title track went on to become Coldplay's first British number one based on download sales alone, after it was released solely on iTunes.
But rock band the Nine Inch Nails are seen by industry experts as the true trailblazers. Having connected with fans in a range of ways - from leaving USB sticks containing exclusive content in the toilets of their gigs to creating secret websites - the group's most recent album was released without a label in a variety of formats.
Among other options, fans could download the first nine songs for free, get the entire 36-track album for $5 (£3.37) or opt for one of an edition of 2,500 personally-signed box sets at $300 a piece. And it worked: the deluxe box set sold out in less than 30 hours and the album - available online for free - made $1.6m in its first week of sales.
"I think the music industry as a whole can be in a better position than it has ever been," said Ek. "There has been a massive shift from ownership to access but people will pay for music if packaged correctly and it offers them something special."
However, trying to force people to consume music in traditional ways, by prosecuting file sharing sites or the fans themselves for example, was futile and counter-productive, he said.
"Music is already available for free - 95% of all music downloads are currently illegal, it is pointless to resist that. Every time that you shut down a service like Napster another one will spring up. Instead, you have to make paying more attractive by offering fans more like exclusive content, interviews, live concerts."
Spotify was set up by Ek and fellow Swedish entrepreneur Martin Lorentzon in 2006. It employs an ad-based model that allows users to listen to a huge catalogue of songs in return for listening to an advert around every 20 minutes. Subscribers are able to get the premium service ad-free for £9.99 per month, or 99p per day.
But its advertising is so unobtrusive that some experts have questioned if it can make enough money to support itself or if it will follow in the footsteps of two ad-funded US music sites, Spiralfrog and Ruckus, which last week were forced to close due to insufficient ad revenue. Tony Wadsworth, chairman of the BPI, the record industry trade body, said: "It sounds great, it's user-friendly and it's legal, but you have to question any company based on an ad-funded model at the moment. Is it actually going to be possible to make it pay and produce the type of revenue that the creators and investors needs?"
Ek is confident it will. In return for access to their catalogues labels will be able to target their audience and market their product like never before, while in exchange for their talent artists will have direct access to their fans, and far more flexibility. And the service on offer is useful enough for users to pay, he said. Although he is far from claiming to be a knight in shining armour Ek is sure that Spotify has its role to play.
"We just hope that people will use it and that it will create significant revenue for the music industry," he said. "That way we can help support a fragile ecosystem so that artists can go on making music."
How the menu for consuming music online is growing
All you can eat, pay as you go, or grab it for free
The online store: amazon.co.uk
Amazon offers MP3 albums for £3, with hit singles from artists ranging from Coldplay to Lady Gaga at 29p.
The ad-funded free streaming site: spotify.com
Spotify offers instant access to a huge amount of music, legally and without charge, in return for one short audio advertisement every 20 minutes or so.
The daddy: iTunes.com
The biggest of the download stores, which also offers many free podcasts.
The music social networking site: Loudcrowd.com
Loudcrowd.com combines gaming, online chat, social networking and teen-pleasing electro-indie music. Users sign up, create their own animated character who dances to tracks and can chat to other users.
The legal downloading site: 7digital.com
7digital offers legal downloads at bargain prices, with albums from £5.
The suggestive site: last.fm
Type in a favourite artist and last.fm plays their music and music from others like them.
Another ad-based streaming site:we7.com
We7 lets you stream more than 3m tracks and download free MP3s by the likes of Motörhead, Moby and the Kinks, with an advert played before each song.
Alexandra Topping
The Guardian, Monday 6 April 2009
guardian.co.uk © Guardian News and Media Limited 2009
Record sales are down, illegal file sharing persists and a whole generation is getting used to enjoying music for free.
But Daniel Ek, the man behind Spotify, the world's fastest growing online music service, is convinced that fans will still pay for songs they love if they are packaged in the right way.
In one of his first interviews since the British launch in February of the "online jukebox" which allows users to listen to songs instantly for free in return for occasional adverts, Ek outlined a new blueprint for the music industry.
Ek is confident that the future is bright if the music industry seizes the digital initiative. "If you truly connect and empower your fan base, people will pay for music. Perhaps that revenue won't come primarily from selling records, but ad-supported music services, subscription music, downloads, merchandise and live shows as well as CD sales are all going to make money for labels and artists," he told the Guardian.
Today Brighton's new music festival and convention The Great Escape - think South by Southwest by the seaside - announced that Ek will share a stage with Patrick Walker, director of video partnerships at YouTube/Google at the event next month.
The pair will discuss new ways of making money and halting the decline of the music industry. With Spotify seen by many as the most important digital tool to hit the music industry since Napster, and YouTube embroiled in a rights row after removing all premium music videos from its site, it promises to be explosive, said Martin Elbourne, founder and creative director of the Great Escape. "YouTube is now bigger than MySpace for the music industry and Spotify is seen as its potential saviour, to have them sharing a stage is very exciting," he said.
Bands who have grasped the digital nettle include Radiohead, who turned the industry on its head when they invited fans to pay what they liked to download their album In Rainbows and Coldplay, who released their first single Violet Hill off their new album Viva la Vida exclusively on their website for one week. The album's title track went on to become Coldplay's first British number one based on download sales alone, after it was released solely on iTunes.
But rock band the Nine Inch Nails are seen by industry experts as the true trailblazers. Having connected with fans in a range of ways - from leaving USB sticks containing exclusive content in the toilets of their gigs to creating secret websites - the group's most recent album was released without a label in a variety of formats.
Among other options, fans could download the first nine songs for free, get the entire 36-track album for $5 (£3.37) or opt for one of an edition of 2,500 personally-signed box sets at $300 a piece. And it worked: the deluxe box set sold out in less than 30 hours and the album - available online for free - made $1.6m in its first week of sales.
"I think the music industry as a whole can be in a better position than it has ever been," said Ek. "There has been a massive shift from ownership to access but people will pay for music if packaged correctly and it offers them something special."
However, trying to force people to consume music in traditional ways, by prosecuting file sharing sites or the fans themselves for example, was futile and counter-productive, he said.
"Music is already available for free - 95% of all music downloads are currently illegal, it is pointless to resist that. Every time that you shut down a service like Napster another one will spring up. Instead, you have to make paying more attractive by offering fans more like exclusive content, interviews, live concerts."
Spotify was set up by Ek and fellow Swedish entrepreneur Martin Lorentzon in 2006. It employs an ad-based model that allows users to listen to a huge catalogue of songs in return for listening to an advert around every 20 minutes. Subscribers are able to get the premium service ad-free for £9.99 per month, or 99p per day.
But its advertising is so unobtrusive that some experts have questioned if it can make enough money to support itself or if it will follow in the footsteps of two ad-funded US music sites, Spiralfrog and Ruckus, which last week were forced to close due to insufficient ad revenue. Tony Wadsworth, chairman of the BPI, the record industry trade body, said: "It sounds great, it's user-friendly and it's legal, but you have to question any company based on an ad-funded model at the moment. Is it actually going to be possible to make it pay and produce the type of revenue that the creators and investors needs?"
Ek is confident it will. In return for access to their catalogues labels will be able to target their audience and market their product like never before, while in exchange for their talent artists will have direct access to their fans, and far more flexibility. And the service on offer is useful enough for users to pay, he said. Although he is far from claiming to be a knight in shining armour Ek is sure that Spotify has its role to play.
"We just hope that people will use it and that it will create significant revenue for the music industry," he said. "That way we can help support a fragile ecosystem so that artists can go on making music."
How the menu for consuming music online is growing
All you can eat, pay as you go, or grab it for free
The online store: amazon.co.uk
Amazon offers MP3 albums for £3, with hit singles from artists ranging from Coldplay to Lady Gaga at 29p.
The ad-funded free streaming site: spotify.com
Spotify offers instant access to a huge amount of music, legally and without charge, in return for one short audio advertisement every 20 minutes or so.
The daddy: iTunes.com
The biggest of the download stores, which also offers many free podcasts.
The music social networking site: Loudcrowd.com
Loudcrowd.com combines gaming, online chat, social networking and teen-pleasing electro-indie music. Users sign up, create their own animated character who dances to tracks and can chat to other users.
The legal downloading site: 7digital.com
7digital offers legal downloads at bargain prices, with albums from £5.
The suggestive site: last.fm
Type in a favourite artist and last.fm plays their music and music from others like them.
Another ad-based streaming site:we7.com
We7 lets you stream more than 3m tracks and download free MP3s by the likes of Motörhead, Moby and the Kinks, with an advert played before each song.
Alexandra Topping
The Guardian, Monday 6 April 2009
guardian.co.uk © Guardian News and Media Limited 2009
