Spotify and the hope of a Social Broadcast License

Last Thursday was the US launch of the fabled european music streaming service Spotify. Spotify is part stand-alone audio player like WinAmp, iTunes, or Windows Media Player; part online music library like Rdio, Rhapsody, eMusic, and MOG.; and part mobile audio player for iPhone, Android, and Symbian. Ok enough with the buzz-word hype-fueled nonsense. Basically, Spotify is an authorized version of the old Napster from 1999.

It comes in three varieties: Free, Unlimited, and Premium.

Free: is well… Free = $0.00.
It is only available as a desktop app. There are ads, you are limited to 5 listens per track per month, and a total of 10-20 hours listening time per month. (I haven’t found any definitive info on total listening time yet. I’m guessing more details will surface in the coming weeks.)

Unlimited: $4.99/month.
The next level of service is the Unlimited package which removes the ads and allows unlimited listens to all the tracks in Spotify’s library. No access from your mobile device.

Premium: $9.99/month.
The premium service is the flagship of the service. No Ads, unlimited listens to unlimited tracks each month, and access to the Spotify library from both desktop app and mobile device, as well as local storage on mobile devices for listening when off-the-grid or as we New Yorkers call it “in-the-subway.”

Syncing music to your mobile device is kind of weird. You can sync music from Spotify onto your iPod via a hardwired connection without the use of a Wifi or 3G network, but if you are using an iPhone, Android handset, or really any mobile device with wireless connectivity, you will have to use the Wi-Fi or 3G for syncing which can be kind of sketchy. If you are on your own WiFi network it works fine, but if you are in an airplane, hotel, or some corporate office where you aren’t the network administrator then syncing can be an issue.

Right now, I’m at work trying to sync “N.A.S.A. – Spirit of Apollo” onto my phone for offline listening while I’m in the Subway. It is not working. There are times like this I’d like to be able to just connect my mobile device to my laptop and sync via a hardwired connection.

All levels of service allow playlist sharing and collaborative playlists. I think this is going to be the killer function of Spotify. Many times I go away for a weekend with friends, or to a bachelor party, or camping with friends and there is always a fight for the audio jack into the stereo. With a collaborative playlist anyone who is subscribed to the collaborative playlist can add a song to the playlist from their phone or computer without having to unplug the current phone that is plugged into the stereo.

There is still the issue of sharing playlists with local or unauthorized audio files, but this is where the real opportunity is from my perspective. Spotify could add an extra charge if users wanted to make their local files available to their friends via shared playlists. They could do so for an extra charge, to cover the added bandwidth costs and royalties.

The pricing could go something like this:
1 degree of separation = $1.99/month + Spotify Premuim
2 degrees of separation = $3.99/month + Spotify Premuim
3 degrees of separation = $6.99/month + Spotify Premuim
4 degrees of separation = $9.99/month + Spotify Premuim
5 degrees of separation = $12.99/month + Spotify Premuim
6 degrees of separation = $14.99/month + Spotify Premuim
7 degrees of separation = $19.99/month + Spotify Premuim

This would in essence be a Social Broadcast License. The idea is that users pay to give music to their friends not to get music from their friends. The main thing is that this is already happening. People are already sharing music with their friends. This would just allows them to do it with greater reach and simplicity, and it wouldn’t be a black market like it is today.

The future isn’t about getting more money from fewer and fewer major broadcasters, but to get a little bit of money from more and more mini broadcasters. Sell cheap licenses that make everyone into a broadcaster, not just super expensive licenses to a few major broadcasters.