The features of spotify and its abilities
Accessibility of portable music has come a long way, from the invention of music records to the use of cds .The music industry is prone to change and the introduction of spotify has taken it a notch higher. Spotify a company that originates from Sweden is the new way of accessing music thorough the internet. The creations of iphones and iPods seemed to be the greatest invention for music lovers around the world (Yoon 28).People could now download their favorite music in these devices and listen to their favorite music whenever they wanted. The introduction of ITunes into the industry further elevated the way we access our music in that we could let us keep our songs on our hard drive (Bakos & Brynjolfsson 74).
Spotify has the same qualities as ITunes but instead of storing music in a hard drive the music can be streamed over to the internet. With the collaboration of major music stations such as Universal, Sony and the Warner Company it has managed to revolutionize the way of listening to music. What makes it better that it is absolutely free since it is sponsored by advertisements. This has been part of their business strategy and plan.
The use of spotify eliminated the carrying around of hard drives that proved to be rather cumbersome .It reduces the use of tags and metadata and users do not have to manage their music library as opposed to ITunes ,this helps save time that would have been wasted .Spotify allows the user to create playlists that are similar to radio station like playlists .Due to the different tastes in music that people may have ,spotify ,enables people with the same musical taste to integrate which is known as srobbling. One way in which it hasn’t increase d its form of generating revenue is that it doesn’t link to a music service to download music. (Bakos & Brynjolfsson 74).
How spotify is generating revenue
Although Spotify has been able to make the accessibility of the music they provide free, in order for them to continue operating they need to make a profit .Since listeners have an option of accessing their music for free they have to endure the audio adverts they play every half hour, which sometimes is a bit destructing to people who are compiling an album. Some listeners do not want to be interrupted when they are listening or compiling their music. If a listener cannot stand the continuous repetition of the advertisements they have the option of 9.99 pounds per month so that they can listen advertisement free without interruptions .Since it attracts the young generation who may not want to pay money monthly they may opt for putting up with the advertisements .The use of advertisements then enables other sponsors to advertise their products due to the large audience Spotify has managed to acquire a supplementary revenue from this (Riley 56).
How spotify has affected terrestrial radio an ITunes
Spotify may be categorized as an augmentation to ITunes, seeing that it encompasses all the qualities that iTunes has. Some may say that all it has been able to do is improve on some major areas that ITunes had not touched on and thus reinvented the way of downloading music. (Bakos & Brynjolfsson 74).Music fans are always looking for the real deal, they are looking for ways of having better access of the music they love .By spotify picking up from where ITunes left off It has enabled people to access their music easily and reduce the use of hard drives .This has affected ITunes in that they are losing their customers to the new music service.
Spotify serves up any song that a listener may want to listen to a song service or album that one may think of .This makes ITunes look like an ancient music service provider. Since its launch in Sweden it has dominated most of the countries in Europe such as Finland, France, The Netherlands, Norway, Spain, and the UK and recently moved to the western countries. This new discovery has taken the use of the internet to a new level.
The use of spotify has changed the way listeners listen to music. This has changed the dynamics in which listeners tune in to radio stations .The use of the radio has been there for a long time and has been gradually diminishing due to the invention of the internet and the role it plays in the provision of music. This has also affected the artists in the music industry .Before the internet artist had more say in the way their music was sold and distributed writes. (Zhang 5).Every time we listen or request for a song on the radio an artist is paid in the form of royalties for their song .Since people did not have access to acquiring songs from the internet .They were forced to listen in on the radio stations and request for their favorite songs (Yoon 28).The existence of service providers such as ITunes and spotify has created a scenario where listeners are no longer at the mercy of the radio stations .This has reversed the way artist distribute their music in the industry .
Servers such as ITunes &Spotify have also made artists vulnerable to the leaking or unauthorized released of their albums before their due date .This has caused many artist to acquire losses that they would not have experienced before they introduction of the internet. (Zhang 5)
Will spotify work in the US
Spotify has done well in many Western Europe countries, One of their advantages is that it did not have a major competitor, although the use of ITunes is international .Spotify may have been created to suite these particular countries .The introduction of spotify to the US would then be received in a different way seeing that it is directly acting as a competitor of the much used ITunes. (Bakos & Brynjolfsson 74).
The use of ITunes which was introduced by Apple Inc provides the listener with similar features, but at a price. This is different from the use of spotify which has made it easier for listeners to get their music and at a cheaper price.(Riley 56) This advantage alone can drive iTunes down by a considerable margin. 80% of the revenue that Spotify gets comes from apple so it is a no brainer that they would not like to get on their bad side. Spotify has been said to postpone their launch in the US .this can be accredited to the fact that apple is still a major market player and can make the life difficult for the spotify company. If artists were to leave Itunes and seek other means of distributing their money, Apple would look for ways of changing the way in which they distribute the music so as to maintain their customers .The fact that ITunes charges for the downloading of their music ensures that the musicians are compensated.
Spotify thus may not be able to suite the demands of the musicians .This alone shows that the although they may offer free downloads the providers of the music are the ones who control where their music is sold. Since majority of the musicians are signed on to labels that are in collaboration with Apple, they are likely to remain where their needs are taken care of. (Riley 56)
Conclusion
With the economy still not at a good place people are looking for the cheapest and more reliable services. The use of spotify guarantees this and would do well in the US. The fact that it can work in the US may also be determined by its competitors who may counter react and improve on their services is left to be seen. Spotify may have a reputation of having better services compared to Itunes but that alone does not guarantee them success in the United States.
The use of internet has changed the way music is distributed in both positive and negative ways .It has made music more accessible to the customer .This has paved way for the discovery of more artists who download their music though the net and even get discovered .The use of the internet is therefore expected to have a bigger role in the music industry. Although Spotify may be the latest form of evolution, it may be replaced by a better service provider.
Works Cited
Alexander, P. “Peer-to-Peer File Sharing: The Case of the Music Recording
Industry “ Review of Industrial Organization. 20.5(2002):51-61.Print.
Armstrong, M. & Vickers, J. "Competitive Price Discrimination, "Journal of Internets Role in Business. 4.1 (2001):6-9.Print.
Bakos, J. & Brynjolfsson, E. "Bundling and Competition on the Internet:
Aggregation Strategies for Information Goods," Marketing Science 19.1(2001): 63-
82. Print.
Newbery, D. "Competition, Contracts and Entry in the Electricity Spot Market."
Journal of Economics 29.4 (2008):14-16.Print.
Reiley, D. "Business-to-Business Electronic Commerce." Journal of Economic Perspective Competing Firms 15.9 (2001): 55-68.Print.
Spier, K. "Revenue Sharing.”Journal of Demand Uncertainty, and Vertical
Control 12.7 (2000):45-49. Print.
Yoon, K. “The Optimal Level of Copyright Protection. “ Information Economics
and Policy.14.2 (2002): 27-48.Print.
Zhang, M.X ."Stardom, Peer-to-peer and the Socially Optimal Distribution of
Music. " Journal of Music Distribution 2.1(2002):4-9.Print.
