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There’s an App for That: Spotify’s Ambitious Battle Plan

As it stands Google Music, Amazon Cloud Drive and iTunes Match are a Spotify dream made in heaven. Three cash rich multinationals, who could buy or destroy Spotify in the blink of an eye, are preoccupied fighting with one another over variants on the same dreary Cloud Locker service.

Instead Spotify finds its main direct competition to be Napster (today bought by US-only Rhapsody), Grooveshark (facing a $17bn lawsuit from Universal) and minnows we7, Rdio amd mflow. Spotify isn’t so much fighting rivals as fighting to convert public opinion to streaming music before Amazon, Apple or Google do it.
And this is where the apps come in. In crowing about the future of music Spotify has cleverly realised it needs to bring some of the past with it. People like apps, coming to depend on a lot of apps breeds loyalty and there is no quicker way to drive adoption of apps than by making them free.

For developers the carrot again comes down to competition, or rather the aforementioned lack of it, because streaming is required to introduce people to new music they discuss and no-one else has Spotify’s global streaming presence. Spotify powered-apps-are-free-and-desktop only-for-now admits paid apps will come in time, but right now free is the best model for all parties. Again it is all about momentum, Spotify needs to grow quickly so that when the big three do make their inevitable moves into streaming it is large enough that it can’t be squashed. At this rate it might just succeed.
That said success isn’t certain. Much like a presidential candidate rushing to get into the White House, Spotify is making deals which may come back to haunt it. The Facebook partnership, for example, is not exclusive yet requires all new customers have a Facebook account and it may falter when Amazon, Apple and Google come to market.

Meanwhile Spotify apps will share revenue in time and where does the money come from with a business model already millions in debt and facing record label rebellion? Lastly it is impossible to escape the feeling Spotify has become a platform only in terms of semantics, but in reality remains the same service with niche add-ons.
Still it is hard to wish Spotify anything but luck. The music industry has been a dinosaur for decades and the tech giants which first woke it up are becoming entrenched by its dogma. “We’re getting people used to the idea again that music is worth paying for,” concluded Ek. There is truth in this, but the fact it is doing so by simultaneously breaking the mould could change everything…

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