Spotify’s Daniel Ek last night confirmed that Spotify is considering introducing different price points and that the percentage of premium members is not yet in double digits, and that 80% of Spotify users have stopped file sharing.
I was invited by Mauricio Samayoa and Sylvia Tan to attend Pop Idols, an event hosted by Glasshouse, with Spotify founder Daniel Ek taking part in a cosy chat, at London’s plush Royal College of Physicians. I spent the evening in the most amiable company of Mr. Michael Litman, live tweeting on the #glasshouse hashtag.
Mr. EK started by saying that getting Spotify off the ground was “all about drive and commitment” and advised the entrepreneurs: “don’t listen to what the public think,” although the “most important thing is the consumer”. He said that he had “no previous experience in the music industry” and that “Spotify is a consolation prize to not being a rock star”.
Daniel confirmed to the enraptured audience that the main limit to growth is the competition, which is piracy, not iTunes, and that the next challenge facing the Swedish start up is to get users to share their music effectively. Saying that music is the most sociable type of culture and that it “transcends cultures, demographic barriers,” Spotify want to “encourage developers to create tools around Spotify to share music” rather than replace them, taking a leaf out of Twitter’s book.
And on the subject of Twitter, Mr. Ek said that they have “learnt more from Twitter than any other service” and how amazed he was that on Twitter, Spotify users respond to questions, and that he doesn’t have to answer directly – an important popint for all brands considering social media and unsure of the power of third party involvement and advocates.
It is interesting to look at Daniel Ek’s values in a wider scope. He said that music sharing “must be legal and compensate the artist,” and that “once we’ve found the artists are making money, then we’ll look at different content”. He said that the end goal is to be the platform between the artist and the fans, and wanted to confirm that user data is not used yet, but that it is “definitely something we want to use to engage with brands”.
Richard Trenholm from CNET asked about the relationship between Spotify and the major labels, and if they would look to introduce more independent artists into their roster. Daniel replied by saying “cutting out major labels is not the way to go, but we do want to work with independent artists”, an interesting potential development for young up and coming bands.
Spotify have considered introducing different price points, and in 5-10 years, their revenue will be mainly subscription based with perhaps to a “60/40” split to advertising. Being typically coy about exact figures, he said Spotify “chose to grow quicker, rather than be profitable”, and when asked about PR, he confirmed that they have only ever issued 4 press releases and that “all marketing budget goes towards the product”
Daniel Ek pointed to the future with three things that Spotify fans could look forward to:
Integration with other social services
Letting artists interact with these other services to know who’s listening to their music