OK, to be less glib and more constructive. A sustainable music distribution model needs to work for:
- the distributor (iTunes or Spotify, for example) or it is not sustainable
- the users, or they won't use it
- the makers of music, or they won't put their music on it
- the owners of music, or they won't put their music on it
If it works for all four, then things are aligned for a sustainable business model. If any one is missing, then the thing can't stay together.
iTunes, check, check, check, check. Four fingers fold in, thumbs up.
Spotify. Works for users, at its existing price point. Doesn't work for makers of music, unless the price point changes, at which point it won't work for the users - unless we are all missing that Spotify can charge significantly more and users would still be happy. Can work for large music owners, but as the original article points out the large owners can achieve this for themselves in a way that no longer works for Spotify.
Spotify is a valiant attempt at a new business model. If anyone can make it work, they are the ones and I salute them for trying. I just don't see how they can succeed.
iTunes doesn't work for me for discovery. The killer feature for me in Spotify is that I can give anything a listen with no effort and no marginal cost. I subscribe to various third party play lists, so I get suggestions pushed to me. If I like something, then there's a tangent for me to go off and explore. Also, although a much smaller concern, is multi-device asset management. Having to copy stuff around is annoying, which means I don't do it, which means the collections on my work and private computers and my mobile are constantly out of sync.
But where I think you're mistaken is in that the business model conceptually doesn't work for makers of music. If I'm anything to go by (and anecdotally I am), Spotify facilitates a lot of new revenue to enter the system. The concrete distribution of that revenue currently doesn't favour indies, but there's nothing inherent about the business model that says that couldn't change.
Perhaps tier the payment per stream: Random access gets low (radio-like) payment, repeated access get higher and higher payment until $1 (iTunes price) is hit, then little to nothing after that. My listening patterns would certainly make such a model sustainable.
I subscribe to various third party play lists, so I get suggestions pushed to me.
I strongly suspect that you are not the typical user. last.fm has been around for years, but still barely anyone uses it. It seems the majority of people use iTunes and Spotify in the same way- to look up and listen to their favourite artists.
Is it really true that a sustainable distribution model needs to work for all of these stakeholders? Sustainable doesn't necessarily mean that it puts food on everybody's table, but instead, that it just exists, and that the participants (musicians and users) reach mutual agreement through their activities/participation.
Wouldn't musicians continue to produce and distribute music even if they weren't able to monetize it through sales? Sure, its great to reward musicians for their work, and they'd love to sell CD's and digital downloads, but being a practicing musician seems to be one of those things that musicians are driven to do, regardless of whether there is a paycheck associated with it. If music sales disappeared tomorrow, my guess is that musicians would continue to produce quality music and find an audience.
If Spotify isn't "working" for makers of music, then either Spotify will fail, the expectations of "makers of music" will change to match the reality of Spotify.
I find this comment really unfortunate. I suspect you'll find that, notwithstanding their love of the trade, musicians are just as interested in getting paid as the rest of us. Unfortunately, given high transaction costs (in the econ 101 sense), they're not very well positioned to negotiate better terms. The only way they get paid is if the music consumer purchases their product in a manner that benefits the artist. As the comments above indicate, Spotify is not it.
- the distributor (iTunes or Spotify, for example) or it is not sustainable - the users, or they won't use it - the makers of music, or they won't put their music on it - the owners of music, or they won't put their music on it
If it works for all four, then things are aligned for a sustainable business model. If any one is missing, then the thing can't stay together.
iTunes, check, check, check, check. Four fingers fold in, thumbs up.
Spotify. Works for users, at its existing price point. Doesn't work for makers of music, unless the price point changes, at which point it won't work for the users - unless we are all missing that Spotify can charge significantly more and users would still be happy. Can work for large music owners, but as the original article points out the large owners can achieve this for themselves in a way that no longer works for Spotify.
Spotify is a valiant attempt at a new business model. If anyone can make it work, they are the ones and I salute them for trying. I just don't see how they can succeed.