5 ms·

Apple Blocks Spotify in the U.S.

5 points by tuxychandru 16y ago

thewordpainter 16y ago
don't doubt this story for one second. consumers may love the service, but no way they achieve the 10% conversion rates that the labels have called for. spotify has talked a big game, but their "imminent" US launch has yet to happen...and i'm not convinced it ever will. all said, i'd love to see daniel ek (spotify ceo) & steve jobs at the same table...
henrrrik 16y ago
Funny how it so many journalists believe that Apple would need a huge $1 billion data center to do streaming when Spotify obviously doesn't.
- manvsmachine 16y ago
  Apple doing it and Spotify doing it are two completely different things, traffic-wise. Assuming that Apple is basing their streaming solution off of Lala's model (not a given, but why else acquire them?), we're talking about giving every iTunes user streaming access to their entire music library, including songs that weren't purchased through iTunes (which would require a serious amount of cloud storage). Spotify reached one million users sometime last year; there are how many millions of iPhones and iPod Touch's out in the world?
  - mzl 16y ago
    Even though the most recent numbers from Spotify indicate something on the order of 10 million users, I agree that Apple still has larger innate audience. However, Spotify uses filesharing to further decrease the load on their own servers, which I don't think Lala used. For some fun details on the Spotify model, see http://www.csc.kth.se/~gkreitz/spotify-p2p10/ http://www.csc.kth.se/~gkreitz/spotify-p2p10/
petrilli 16y ago
It seems a bit disingenuous to say that Apple is "blocking" it. They may be working against it -- and probably are -- but blocking implies Apple has some magical veto. It might be hard to believe, but this sort of thing is pretty normal in the capitalist wunderland.
Tycho 16y ago
I don't like the naive tone of this article. First, they describe the prospect of Apple fighting the service as 'sinister.'Second, they say Apple are trying to scare labels by saying Spotify generates little revenue, which must be 'scaremongering' because Apple obviously 'don't care about record label profits.' There's nothing mysterious going on here... Spotify just doesn't make any significant money for anyone. It's a big free party that could disrupt proper businesses. I also don't see how Apple are 'almost inevitably' going to launch a Spotify style service. Where's their evidence for that, outside a large data-centre being built - which could be for any number of purposes.
- mzl 16y ago
  Just curious, why do you believe that Spotify doesn't make any money for anyone?
  - Tycho 16y ago
    They seem suspiciously tight-lipped about how much money they take, then there's been a few articles detailing how the royalties earned by musicians/publishers per play are minuscule. And just listening to the service, the adverts that get played are by charities and government for the most part, there doesn't seem to be any big contracts there. Plus the free service is excellent so I can't imagine there conversion rate to Premium membership is very high. And even if it is, the small amounts they charge, compared to the vast amount of intellectual property they're making available, and the bandwidth needed to provide it, doesn't make it look like a good business for the industry to get involved in.
    - mzl 16y ago
      I agree that they are very tight-lipped about actual revenue streams, but I don't think that is their fault. I would guess that it is the record companies that want to keep such numbers secret. One of the guys who started Spotify previously did Tradedoubler, so they know something about on-line ads. While they haven't said much officially, they did comment that ad-sales were going quite well. Regarding what musicians earn, the most interesting note is probably that the Swedish collection agency (STIM) said about half a year ago or more that Spotify is the number one digital earner for music in Sweden (passing iTunes for example). As for the bandwidth, see the paper I linked in another comment for some interesting statistics on how much bandwidth is actually needed (tl;dr version, surprisingly little thanks to p2p and caches).

5 points by tuxychandru 16y ago

don't doubt this story for one second. consumers may love the service, but no way they achieve the 10% conversion rates that the labels have called for. spotify has talked a big game, but their "imminent" US launch has yet to happen...and i'm not convinced it ever will. all said, i'd love to see daniel ek (spotify ceo) & steve jobs at the same table...

henrrrik 16y ago

Funny how it so many journalists believe that Apple would need a huge $1 billion data center to do streaming when Spotify obviously doesn't.

manvsmachine 16y ago
Apple doing it and Spotify doing it are two completely different things, traffic-wise. Assuming that Apple is basing their streaming solution off of Lala's model (not a given, but why else acquire them?), we're talking about giving every iTunes user streaming access to their entire music library, including songs that weren't purchased through iTunes (which would require a serious amount of cloud storage). Spotify reached one million users sometime last year; there are how many millions of iPhones and iPod Touch's out in the world?
- mzl 16y ago
  Even though the most recent numbers from Spotify indicate something on the order of 10 million users, I agree that Apple still has larger innate audience. However, Spotify uses filesharing to further decrease the load on their own servers, which I don't think Lala used. For some fun details on the Spotify model, see http://www.csc.kth.se/~gkreitz/spotify-p2p10/ http://www.csc.kth.se/~gkreitz/spotify-p2p10/

petrilli 16y ago

It seems a bit disingenuous to say that Apple is "blocking" it. They may be working against it -- and probably are -- but blocking implies Apple has some magical veto. It might be hard to believe, but this sort of thing is pretty normal in the capitalist wunderland.

Tycho 16y ago

I don't like the naive tone of this article. First, they describe the prospect of Apple fighting the service as 'sinister.'Second, they say Apple are trying to scare labels by saying Spotify generates little revenue, which must be 'scaremongering' because Apple obviously 'don't care about record label profits.' There's nothing mysterious going on here... Spotify just doesn't make any significant money for anyone. It's a big free party that could disrupt proper businesses. I also don't see how Apple are 'almost inevitably' going to launch a Spotify style service. Where's their evidence for that, outside a large data-centre being built - which could be for any number of purposes.

mzl 16y ago
Just curious, why do you believe that Spotify doesn't make any money for anyone?
- Tycho 16y ago
  They seem suspiciously tight-lipped about how much money they take, then there's been a few articles detailing how the royalties earned by musicians/publishers per play are minuscule. And just listening to the service, the adverts that get played are by charities and government for the most part, there doesn't seem to be any big contracts there. Plus the free service is excellent so I can't imagine there conversion rate to Premium membership is very high. And even if it is, the small amounts they charge, compared to the vast amount of intellectual property they're making available, and the bandwidth needed to provide it, doesn't make it look like a good business for the industry to get involved in.
  - mzl 16y ago
    I agree that they are very tight-lipped about actual revenue streams, but I don't think that is their fault. I would guess that it is the record companies that want to keep such numbers secret. One of the guys who started Spotify previously did Tradedoubler, so they know something about on-line ads. While they haven't said much officially, they did comment that ad-sales were going quite well. Regarding what musicians earn, the most interesting note is probably that the Swedish collection agency (STIM) said about half a year ago or more that Spotify is the number one digital earner for music in Sweden (passing iTunes for example). As for the bandwidth, see the paper I linked in another comment for some interesting statistics on how much bandwidth is actually needed (tl;dr version, surprisingly little thanks to p2p and caches).