Booming Spotify on sound footing with ad offering
MD of music streaming firm in UK and Ireland tells Technology Editor Adrian Weckler about firm's commercial plans
'We firmly believe that what people really want is access over ownership'
Downloading is dead: long live 'streaming'. That's the message that global online music service Spotify has been saying for over three years. As the Netflix of the music industry, the Swedish company is booming worldwide.
But is it fair to artists? And can it persuade 'traditional' downloaders using iPhones and iTunes to ignore their stored-up digital collections and go with streaming?
"We firmly believe that what people really want is access over ownership," said Adam Williams, Spotify managing director for the UK and Ireland.
"But I don't think that downloading will disappear altogether. Don't forget, you still have people collecting vinyl. In fact, I think it's gone up 13 per cent in the last year."
Back-handed compliments to rival platforms aside, Mr Williams is on a mission to ramp up Spotify's business in Ireland. To this end, the company has launched several new commercial programs for Irish firms who wish to advertise on Spotify in Ireland.
The pitch is as scary as it is impressive.
"We know your age, your sex, the type of music you like and other things about you," he said, speaking to the Sunday Independent at Dublin's Web Summit.
"That's a very powerful proposition for certain types of advertisers who want to reach you. We're offering audio ads that target users who use the free PC streaming service, but not the premium mobile service."
One group which sometimes gives out about the move to streaming is artists.
Although Spotify does not divulge exactly how much it pays per song to bands and music labels, one recent estimate calculated that it required 200,000 plays per month to earn a single person's minimum wage.
"To be honest, that really depends on a lot of things," said Mr Williams. "It can vary according to which country it's in, the size of the market, the mix of free versus premium plays and so on. But we very definitely offer a fair deal to artists.
"We give 70 per cent of what we take in back to rights holders – and we will have paid over $1bn (€741,000) to music rights holders by the end of this year. Don't forget that we're obliged to pay the licence holders, which is often a different thing to paying bands or artists directly."
Not everyone is convinced though. Radiohead's lead singer, Thom Yorke, recently went on a rant about streaming services, describing Spotify as "f**kers" who simply want to "get in a way" of bands and their audiences.
"It's the last desperate fart of a dying corpse," he said.
"Spotify is suddenly trying to become the gatekeepers to the whole process."
According to most industry estimates, Mr Williams and Spotify are pushing an open door. Although the company does not give regional breakdowns in terms of its user base, the service is booming in Ireland. The advent of 4G mobile services with higher monthly data caps will increase the appeal of Spotify and its streaming rivals.
"We're pretty confident that people are using us as a great way to get music they would normally not have the opportunity of getting," said Mr Williams. "It's about access, not ownership."
Spotify is an internet music service that plays (or 'streams') music on demand to your computer, phone or tablet. Most popular music is there: the company says that it has over 20 million songs.
It's free (with some ads) to use on a computer, while it costs €10 per month to use it (ad-free) on a smartphone.
Unlike rivals such as iTunes, the service does not 'download' songs. Instead, it plays (or 'streams') them, in the same way that YouTube 'streams' videos.