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Sánchez-Ocaña Alejandro Suárez. Entrepreneur and private investor the Internet and new technologies sector.
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I hope I'm wrong and Google does not buy Spotify
Spotify is a wonderful product, blunt, and who has penetrated deep into millions of Internet users across Europe.
In my opinion when something is used by millions of people in different parts of the world, as is the case, it is not coincidence, but that is responding to the need of users.
MY opinion on Spotify requires a disclaimer. I am one of the investors Yes.fm that Spotify is direct competition in Spain and actually brought to market months before they left, it is clear he would be happier if they would have done worse. I notice that no one tells me that my view may be biased, may be so, because I have interests in the sector.
Labels die, they need to reinvent themselves and have few, very few wanted it. The change in content consumption have been caught with the wrong foot, and even today would be happy to sell CDs at 18 Euros and if it disappeared digital music consumption, which meet all their ills.
Spotify has done in my opinion some things extremely well, but also in other cheated creating the perception that free music consumption was normal and sustainable. Therefore, it has employed techniques are not new to approach the user, wanting to do it dependent until it has been sustainable and has to stop paying the party and cut the "free beer."
This is not a new marketing technique, and used it to promote themselves and settle. They knew that was not sustainable, especially in Southern European countries, where to put it delicately, everyone assumed that the percentage of people paying for the service is much lower than northern countries, especially Scandinavia.
If you think there has been a part of this tactic that has been bad for the industry to the new streaming services, and now returns as a boomerang against Spotify and was simply not hide the truth.
Each time a streaming service listening to a song the record companies charge for it. Ie if you listen to 100 songs per month, the record company takes 100 times. It is considered a micro suckers. So what happened when you use Spotify based advertising for X hours a day, the party is paid for them and consciously fidelizarte do they want to be like, want to be the Apple of music. That does not hold in the economic and know it also affects the music is a free good, and especially the user is happy thinking that the ad that put paid to the party and "spotify should be thankful because I use and make money with me. "
But then, I hear advertising does not pay the party?
Absolutely. Does not even cover the costs record (very high) and streaming (expensive), very few countries do, and certainly in Spain and does not cover 10-20% of these costs. For that reason, companies that want to have millions of users streaming, require at least 15-20% of users are to pay, otherwise the system does not hold.
The stark reality is that in Spain, for every million users can pay for these services 10000-20000, ie a small critical mass. If you give free music, you do not have a huge critical mass of subscribers, the house of cards collapses, and we must resort to seeking venture capital fund "to be the world leader in streaming music." You can run one, two or three times, but then there is a D-day in which you are required to stop giving, dealing with the situation and be honest with the user, he explained that I was paying for the party and now it's up to him. You know I will feel cheated, you'll get green and many left to use you, particularly it will hurt your brand ... but things that are not sustainable have a purpose, since business can not lose money for life.
Something very similar happened with LastFm , which decided to cut its services in countries with few subscribers and Spain, in fact only the service were opened in 2009 in a few countries, UK, Germany and USA, where the mix of advertising + subscriber was profitable . Users "total free" Spotify migrated at that time. In 2010, for the same reason they left the mobile streaming
I have the perception that Google will buy Spotify , and if this happens again the "free beer" for the giant of Silicom Valley can be very useful operation. I do not like frankly, I could lengthen a false perception that music has no cost, regardless, why not say that if Google buys Spotify is not good news for any streaming product in the world.
If Google buys, saves a company, and makes the "YouTube" of music, sets foot in a market owned by Apple, launches a nod to millions of users, has a good advertising medium, and they are involved in selling, that's what they do very well, also a product like Spotify integrated into the Google search engine would be tremendous.
This would also be a story that could further rile even the so-called record companies, in fact I think that is why if you have a certain charm 
No one knows if that will happen, but if so, may last for a few years and go back to thinking that music is free for a while until it is again untenable. Ojo, would also have all the sense in the world to buy Apple Spotify .
You always have the option to download. I'm not a moralist, I pay more people interested in these services because of my interest in them, but each has its own free choice, not me who take a talk to anyone. I myself have downloaded a thousand times.
I just wish everyone knew the music you hear in Yes.fm in Spotify, or any legal streaming service on demand etc is not free, it charges the SGAE, Promusicae, record ... and I think Spotify, which at the brand has done wonderfully, but was very clear that one day had to end the party, and as has not been truthful and has not explained well, many people have been pissed.
In its announcement on the blog (which by the way, do not say that you cut open bar, but they give you at least drink a month), the comments of some no waste :
1 week ago geekermo said:
Bye bye Spotify.
1 week ago araklan said:
Bye bye spotify ...
Im Beginning to save my lists ....
1 week ago patrux89 said:
It was nice while it last.
1 week ago xthief said:
Bye bye Spotify
A user is a man who appreciates your service, they would be willing to pay or use the form that promotional offer (free). The abuse of promotional opportunity, unlimited by decree does not create users, but parasites.
If not thank you received for free over the years, the service Spotify you loved and idolized, and now because you have limited consumption, flings himself pests, you feel offended and are not willing to pay 4.99 Eur 9.99 Eur per month or in the form higher (or stay in the free form, with its limitations), it may be you, that as a non-interest at the company, not the company has fallen out of favor for you.
Tags: apple spotify , Google , google spotify , spotify , streming , streming to the letter , yes fm
12 Comments to "I hope I'm wrong and Google does not buy Spotify"
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It's time to assemble your own company
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Excellent article, well, I share your vision.
Dear Alejandro
In this issue, I think we more or less, the only difference is that you have something of interest and a server, which is why pulling Spanish proverb, "the disorder is keeping order" in every way, I sincerely believe that music industry, tail out took advantage of the circumstances, super charging inflated prices.
Now the media has changed and the power do not have them, it is the former client directly, and I think the worst thing that's happening is that there is a feeling of doing something wrong, the opposite is a kind of "revenge" in which everyone (other than the sector) supported by the number of years of abuse, a point I guess we will too. At the moment the scales are tipped side discharging, among which I include myself.
I am quite sure that the remedy would be to find a solution that benefits everyone, "mediocrity" and they said the Greek classics, do not believe in limiting freedoms with laws and other nonsense SINDES solve the problem, as always, with creative ideas reach equilibrium and so everybody's happy.
God keep you
... ... ... ... Sorry, the comment before I rolled and I said what I think should there be the purchase by google, because I think long term the sector would benefit, for the reasons arrriba sponge.
Alejandro, sailing between tweets I found this post, and I have to admit that so far, you've won a follower and this response to your interesting point of view
In large part I agree with you:
- The rich business model for content producers and distributors of cultural industries has peaked with the digital content and must be renewed if it is to be overwhelmed (as is happening).
- The streaming model is not sustainable forever precisely because the royalties charged by these producers, distributors and other entities managing copyright (SGAE, Promusicae, etc ...)
However, I think:
1 - Google tries to save costs in product development and user search and buying a product made with the user market is well defined.
When Google bought YouTube, and had its own platform: Google Video. Years after gain a solid Youtube, has made it profitable inserting advertising through its AdSense service and premium platforms like Youtube or next VEVO Premium.
Google Video Google let die on their own 2 years ago, and has recently seen the news that all the videos and the website will be removed permanently.
Have you been out this adventure cost? In principle yes, but it could have saved a lot of money in production costs, development and launch.
Remember that Google Music is still a mystery, and that music with the film is the only cultural element that Google still has not touched with her wand.
Would not it be a good move to spend a little more money than would the development & launch and buy a platform and made very popular and profit by integrating with the rest of your services?
Is not that profitable (at the level of promotion) to record video clips from Youtube hang? What if Google were to cut the tap?
For another time would leave the issue of "omnipresence" digital "all-knowing Oracle" ... (aka Google), which would secure for another interesting debate.
It is curious that among all the actors who have appointed receivers of money (SGAE, Promusicae, etc), not the authors, who should be who should receive the bulk of cake.
So for now the system is unsustainable, fully manipulated by an industry expires and decadent.
I think if Google acquires Spotify will be a very bad news for the sector but not as bad for end users. Those who only cares about the price of the service.
Google is an expert in these matters, could leave Spotify free for several years .. as it has done with YouTube and other services. Youtube had views that would not be profitable, there was no way to monetize videos .. and have finally shown that. Just about a thousand services that have, free, to make essential .. Who would not pay a small fee for using Google services like Gmail, Webmaster Tools, Maps ...?
Spotify I use daily have migrated to the basic subscription, 5 € .. month .. 0.16 cents per day .. That is much less than the lost coins in their pockets, or tickets that you forget the pants and get damaged in the washing machine .. :-O
I do not understand people who defend the all free, no wonder the record companies are reluctant to migrate their business model to the digital age .. There are people who protest pay 5 € a month for unlimited music listening, is that with a CD that they now sell it for 4 users Spotify.
But I think gradually the Spanish user will enter the path of digital services, before it was "weird" user (not companies) who paid for some software, now, thanks to models like the AppStore, Android Market .. people will be aware that the software is paid, even € 0.79, € 1 .. € 3 which are, but the user gets used to pay for a service .. So did the music and iTunes, a service that a priori might seem unprofitable is showing that sell music online is very profitable ..
For me in this regard would have no rhyme or reason to buy Apple iTunes Spotify having not see compatible, why should I pay € 1 to download a song, if you pay 5 € a month I can listen to unlimited?
Anyway, I think it's a good move and that Spotify is not going to go wrong .. When the New York Times announced it would charge for access to news seemed to be announcing their debacle on the net .. and early figures suggest that they have not been too bad, I think the network users is far less than 10 years ago, paying for a service is now normal.
Hello Alejandro,
In my opinion, Spotify has not changed its conditions due unwilling or unable to continue paying the open bar. But has been one of the conditions that have required the labels to give them the rights to launch the U.S. service Spotify.
As you said, the labels do not want to prolong the perception that music is free and so is required by Spotify to reduce what they give for free with the hope that a greater number of users will pay for programs. Let's see if it works.
Anyway, if Google ends up buying a Spotify, record companies will not allow Google to pay the open bar either. Google will have to offer the same conditions as Spotify now going to offer.
Suárez Sánchez-Ocaña [...] has been the subject very outstanding this week and is worth reading what he has to say, especially when it is fully in the sector, via [...]
Xaco,
Cobra SGAE the authors. And yes, it is a part (about 20% of what it charges for its management services) but most authors are paid. Without SGAE not charge authors. Promusicae is the recording industry association in Spain and does not charge for the sale of music and playback on services like Spotify. Charges an annual fee (or quarterly) of their partners (the record).
Same thing happened to me Pandora. I imagine that those who are in it you will envy the algorithms to find related music. At the time users are honest with the U.S. were not saying they were not able to pay the rate increase had been.
Another excellent service is obviously Last.FM was also castrated and explain.
I think we should stop demonizing users who intend to listen to free music. It's like saying those who listen to radio or watching TV are pirated. The only thing that the Internet is to the letter then it would seem a "premium" service.
All this means assuming that all change, the technology for recording, distribution methods, etc ... The P2P showed that the machines of users could be servers, the musicians found that they necessarily need a studio to record or a label to be distributed (to some extent are still necessary, but not essential).
When we talk about music can not forget the cultural factor to take care only of economic sustainability. Either we believe that culture enriches people intellectually and therefore should have free access although they can not afford it, or consider it a hobby that you can afford it is obligated to pay for it. When we address these issues we should always take into account this balance because it is not the same as speaking of home furnishings and luxury cars.
Sorry for the can.
Google is full of "parasites" and do not see how much money he makes, Alejandro
Greetings!
I hope one day the consumers of this type of application to want to invest 5-10 per month to use them.