Spotify Overthrows iTunes… for UMG… in Sweden…
By now, you know what Spotify is. If not, click here.
It’s being reported that Universal Music Group, the largest label in the world, has earned more money from Spotify in the past 5 months than it has from iTunes Sweden. The premium Spotify subscription runs for 10 euros a month ($14.27 USD), and users can also use the program for free with an ad-supported version.
“In five months from the launch, Spotify became our largest digital source of income and so passed by iTunes… It’s a fantastic development, explained by the fact that Spotify really has exploded.”
- Per Sundin, managing director UMG
So before we declare Spotify the new king of the music player hill, let’s break down what this could really mean.
Spotify is based in Sweden. Undoubtedly, there will be a lot more users supporting the home-grown product there; which may or may not translate to the tech-saturated US of A.
We also don’t know the rates that Spotify is paying UMG per play. If it’s some exorbitant amount greater than iTunes pays per track sold, then Spotify earning more money than iTunes for UMG does NOT equate to Spotify actually being more popular than iTunes.
What also may be of concern is that if Apple feels threatened by Spotify, they may block the Spotify iPhone App from the App store, just like they did with Google Voice. Without a way to take songs with you on the go (and don’t suggest a proprietary mobile device, those are lame and never worked for Pandora), Spotify would be doomed.
Spotify has also been tinkering with ways to enhance the social element of their product by including options to share songs on Twitter, Facebook, and other social sites. That’s where Spotify has a one-up on iTunes. Because it’s free and streaming, anybody with net can check out the songs that their buddies are listening too for free. Apple could never achieve that with iTunes because all songs must be purchased (or at least downloaded) to be heard in their entirety. The likelihood of me purchasing a song from iTunes solely because my friend tweeted it out… slim to none.
What Spotify needs to do next is borrow a play from the Zune marketplace; yes, I just said that. At the end of each month, premium subscribers should get to download and keep a certain amount of songs. If you paid $15/mo for unlimited streaming music AND got to keep 10 of the songs you played at the end of each month, the incentive to move towards the premium subscription increases dramatically.
That brings us to our POLL (You can select multiple options if pertinent):
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