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Mike McCready

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Spotify Has More of a Fighting Chance Against Apple, Amazon, & Others

Posted: 07/21/11 12:17 PM ET

There are those who disagree, but I think Spotify has a real shot at winning the music game in both the US and Europe -- if not beyond.

Spotify makes almost all the music in the world available to you on-demand, 24x7. That's just going to beat any cloud service that requires you to pay for the cloud plus pay for the music you're going to store in it. And yes, the paradigm of owning all the music you play is familiar to the public but when access is perceived as good as ownership minus the storage and organization headaches, I can't see how anyone is going to prefer to own more digital files than they must. Storing and organizing your documents is hassle enough for most people. A solution that helps you avoid that kind of pain will be welcome relief for most.

Apple and Amazon are formidable opponents. Spotify isn't going to win easily and several solutions will co-exist for some time to come -- but eventually, I imagine Apple and Amazon will have to become more like Spotify to remain competitive rather than outperform Spotify with their current propositions.

I've been a premium Spotify user for almost 18 months and a free user when I'm in Europe (1/3 of the year) a lot longer than that. I practically quit buying music as soon as I became a premium user, which enabled me to use Spotify unlimitedly in the US. I even opened a second account and gave it to my dad for his birthday last year. He quit buying music after that too and hasn't turned back.

When access emulates ownership in the way Spotify pulls it off, there's just no need to own music anymore. Sure, Spotify has gaps in their catalog but I'm betting market forces will require content owners to resign themselves to Spotify's ways rather than have their content increasingly omitted from play lists or worse -- forgotten -- by an audience that becomes accustomed to Spotify's access model.

And yes, I know there are other access models here in the US that have been around for the better part of a decade, such as Rhapsody and, more recently, MOG and Rdio. But they don't have a freemium model that lets people get a taste. That's where Spotify can drive adoption and get people used to the access model and foster brand loyalty at the same time -- thus beating their access competitors as well.

It will be interesting to watch.

Regardless, other players will do what it takes to compete more effectively against Spotify. MOG, for example, is close to launching their own freemium model and there are parts of their interface and a few features that give Spotify a decent run for their money. And Apple is not one to be in any game and not be the leader. In my estimation though, it's just a matter of time before they will have to change their model to ultimately win against the currently superior access model and the more compelling user experience.

 
 
 

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