It’s an exciting time at the moment as we're seeing existing business ideas made great by new innovations and user experiences. Spotify is one example. I feel it will beat iTunes and further revolutionise the media industry. Or at the very least make iTunes rethink the way they sell music.
If you haven’t used it, a brief introduction. Spotify provides quick access (no buffering means no waiting around for songs to load) to almost any song or album you want to listen to (after using it since January I’ve found I get 80%-90% of the music I want) through a desktop application (which means you can access it offline) which allows you to build playlists quickly. And the quality of the music files it plays is high. In exchange, you get an advert every 20 minutes, or for a small monthly fee, no adverts at all.
It’s great. As a big music consumer myself I can see it will put a big hole in the mp3 market. Spotify have done a number of things well that others should copy, namely;
Finding an unfulfilled customer need – What Spotify is doing is not new at all. Their model has its origins in Napster, Myspace, iTunes and last.fm. The customer need it fulfils is new though. Spotify takes the needs of ‘I want access to all the music in the world through a really easy interface’ (which iTunes has but last.fm doesn’t) and ‘I want free music and a community ’ (which last.fm does really well) and brings them together to exploit an unfulfilled need of ‘I want all the music in the world, for free, and have a great user experience’. This can be applied to be any industry, and perhaps your own. Spotify is a good example of how to do it well.
Understand the power of networks – In his recent book ‘What Would Would Google Do?’ Jeff Jarvis talks about the power of networks, and changing your commercial model from ‘charging the highest fee that the individual customer will bear’ to charging ‘the lowest cost you can charge that the entire network can bear’. His logic is that if you’re doing this the competition can’t undercut you without making a loss. Spotify have understood this – and made their service easy for a wide network of users to adopt with no or very little cost to the user – Spotify have their eye on making a living from the entire network and not the individual.
Make the user experience great – Use Spotify in comparison to last.fm and you’ll be impressed by its ease of use. They understand that users would be impressed by a ‘no waiting’ approach to loading tracks and their interface was familiar and easy to adopt (building an experience based on the design of the iTunes interface that users already knew well).
Get the right blend of advertising – Spotify kept it simple and didn’t overload their service or the users with adverts, and allowed users to opt out of commercial messages for a fee.
