Monday, March 30, 2009

Spotify shape-shifts into download store

Now, there's some words which might cause Apple a slight alarm - the words "iTunes killer" get flung about with gay abandon, and this ain't one, either; but Spotify have done a deal with 7Digital to allow selected European users to buy a download of selected tracks they might be listening to.

Not an iTunes killer, but - alongside Apple's enforced abandonment of one-price-fits-all, and Amazon's mp3 store - enough to give indigestion to iTunes.

Experts - or, at least, "experts" - see evidence of panic in the move, on Spotify's behalf:

However, said Mark Mulligan, analyst at Forrester Research, Spotify has found that far fewer users then expected are handing over the cash for a monthly subscription.

"The deal is happening now rather than at launch because Spotify is going through the process of re-learning its business," he said.

"It went into this thinking it was going to be a premium subscription business," he said. "The problem is what's proven to be the successful part is the free bit."

I'm sure Mulligan has good reason for believing what he believes, but I'd bet a signed Elastica seven inch that the reason why Spotify are adding this now, rather than at launch, was to avoid having their product clouded when it first went live. If there had been a chance to buy as well as subscribe, half the attention would have been on the download side and made Spotify sound like just another online shop.

And, again, Mulligan might have his reasons for believing that Spotify are "relearning" their business, but it would stretch credibility that they could have launched when they did assuming that more people would pay than listen through the ad-funded service. Perhaps they might have overestimated how much advertising would be around, but not that people would flock to free?

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