Friday, June 24, 2011

Spotify - US launch expected mid-July?

Question: How important is Spotify to Earache? Do you make a significant income from it? I'm a subscriber to their premium service for £10 per month and have a number of Earache albums on my playlist (including the new Rivals Sons album), which admittedly I won't be buying the cds. I assume this is acceptable to Earache, as you have chosen for your albums to be accessed via Spotify.

I'm just keen that even if bands don't make any money from it (which I don't think they do) then at least underground labels such as yourselves do, so that hopefully the income can be invested into new bands etc.... is this the case?


Answer: Yes, of course, it's VERY acceptable for you to play our albums on Spotify- that's why we put them on there! In fact, I'd encourage you to playlist and stream even MORE Earache albums, because that's how we (and our artists) get paid. Open Earache New & Classic to grab a bunch of new and classic Earache albums handpicked by myself (Spotify needed).

Spotify is amazing and I use it myself on a daily basis, there's nothing better than dragging/dropping a bunch of new albums to my phone which I can then take with me to listen to on the daily commute into work. Its all legal and costs the price of one CD a month, any fool can see it's a bargain really. The key difference is that the songs remain in the cloud and are streamed to the device. Such cloud-based music services are the hottest new trend in tech, with Google and Amazon already launching cloud based music locker services, and Apple promising to launch a similar 'iCloud' with iPhone 5 in September.

Glad you are enjoying the new RIVAL SONS album on Spotify, but there is a slight sting in the tail because the iTunes version (which is on sale for the princely sum of £5.49) contains 2 bonus songs unavailable anywhere else. iTunes is the undisputed daddy of the music industry. From a standing start in 2004, it now represents a staggering 33% of the entire USA music marketplace.However, iTunes are anything but a faceless tech behemoth- they were smart enough to hire genuine music fans as label-liaison staffers for each genre- so customers get a knowlegable guide to all the new music every week. Many notable music writers and bloggers from the recent past have ended up working for these new billion dollar music sites as label-liaison staffers, its been a lucky career boost for them.

As for how we get paid- Spotify logs every stream, which number many billions per month, from a European user base of around 10 Million, of which 1 million are premium subscribers and pay the monthly fee.

It reports and pays labels like Earache based on the exact proportion which our tracks take up compared to the overall number of tracks streamed. All the numbers are becoming eye-wateringly huge. Earache typically has over a million tracks streamed every month, and as Spotify increase their income from encouraging more sign ups to the paid-for service, our income increases too. Earache's monthly income from Spotify has doubled in the last 12 months and is rapidly gaining on iTunes.

It's reported that some Swedish major labels make more income from Spotify than iTunes now, which shows the power of the site in its home country. Luckily for Earache, we have quite a few important Swedish Metal acts in our back catalog, which serves to boost our income.

The make or break moment for Spotify is looming soon as it finally enters the USA marketplace next month. Similar streaming music sites already exist in some form - Pandora, Rdio and MOG being the front runners, but the European invasion is imminent. Some very high profile backers - including original Facebook investors- have invested in Spotify making it a billion dollar gamble. If they are smart they'll sort out immediately the shockingly poor front page, which simply displays a random selection of the latest uploads, without regard to my listening tastes, and is a major turn off for new users.

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