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Tag: Spotify

Spotify is building shared-queue Social Listening

June 1, 2019 No Comments

Want to rock out together even when you’re apart? Spotify has prototyped an unreleased feature called “Social Listening” that lets multiple people add songs to a queue they can all listen to. You just all scan one friend’s QR-style Spotify Social Listening code, and then anyone can add songs to the real-time playlist. Spotify could potentially expand the feature to synchronize playback so you’d actually hear the same notes at the same time, but for now it’s a just a shared queue.

Social Listening could give Spotify a new viral growth channel, as users could urge friends to download the app to sync up. The intimate experience of co-listening might lead to longer sessions with Spotify, boosting ad plays or subscription retention. Plus, it could differentiate Spotify from Apple Music, YouTube Music, Tidal and other competing streaming services.

A Spotify spokesperson tells TechCrunch that “We’re always testing new products and experiences, but have no further news to share at this time.” Spotify already offers Collaborative Playlists friends can add to, but Social Listening is designed for real-time sharing. The company refused to provide further details on the prototype or when it might launch.

The feature is reminiscent of Turntable.fm, a 2011 startup that let people DJ in virtual rooms on their desktop that other people could join where they could chat, vote on the next song and watch everyone’s avatars dance. But the company struggled to properly monetize through ad-free subscriptions and shut down in 2014. Facebook briefly offered its own version called “Listen With…” in 2012 that let Spotify or Rdio users synchronize music playback.

Spotify Social Listening was first spotted by reverse-engineering sorceress and frequent TechCrunch tipster Jane Manchun Wong. She discovered code for the feature buried in Spotify’s Android app, but for now it’s only available to Spotify employees. Social Listening appears in the menu of connected devices you can open while playing a song beside nearby Wi-Fi and Bluetooth devices. “Connect with friends: Your friends can add tracks by scanning this code – You can also scan a friend’s code,” the feature explains.

A help screen describes Social Listening as “Listen to music together. 1. On your phone, play a song and select (Connected Devices). You’ll see a code at the bottom of the screen. 2. On your friend’s phone, select the same (Connected Devices) icon, tap SCAN CODE, and point the camera at your code. 3. Now you can control the music together.” You’ll then see friends who are part of your Social Listening session listed in the Connected Devices menu. Users can also copy and share a link to join their Social Listening session that starts with the URL prefix https://open.spotify.com/socialsession/. Note that Spotify never explicitly says that playback will be synchronized.

With streaming apps largely having the same music catalog and similar $ 9.99 per month premium pricing, they have to compete on discovery and user experience. Spotify has long been in the lead here with its algorithmically personalized Discover Weekly playlists, which were promptly copied by Apple and SoundCloud.

Oddly, Spotify has stripped out some of its own social features over the years, eliminating the in-app messaging inbox and instead pushing users to share songs over third-party messaging apps. The deemphasis in discovery through friends conveniently puts the focus on Spotify’s owned playlists. That gives it leverage over the record labels during their rate negotiations as it’s who influences which songs will become hits, so if labels don’t play nice their artists might not get promoted via playlists.

That’s why it’s good to see Spotify remembering that music is an inherently social experience. Music physically touches us through its vibrations, and when people listen to the same songs and are literally moved by it at the same time, it creates a sense of togetherness we’re too often deprived of on the internet.


Social – TechCrunch


What Spotify can learn from Tencent Music

October 7, 2018 No Comments

On Tuesday, Tencent Music Entertainment filed for an IPO in the US that is expected to value it in the $ 25-30 billion range, on par with Spotify’s IPO in April. The filing highlights just how different its social interaction and digital goods business is from the subscription models of leading music streaming services in Western countries.

That divergence suggests an opportunity for Spotify or one of its rivals to gain a competitive advantage.

Tencent Music is no small player: As the music arm of Chinese digital media giant Tencent, its four apps have several hundred million monthly active users, $ 1.3 billion in revenue for the first half of 2018, and roughly 75 percent market share in China’s rapidly growing music streaming market. Unlike Spotify and Apple Music, however, almost none of its users pay for the service, and those who do are mostly not paying in the form of a streaming subscription.

Its SEC filing shows that 70 percent of revenue is from the 4.2 percent of its overall users who pay to give virtual gifts to other users (and music stars) who sing karaoke or live stream a concert and/or who paid for access to premium tools for karaoke; the other 30 percent is the combination of streaming subscriptions, music downloads, and ad revenue.

At its heart, Tencent Music is an interactive media company. Its business isn’t merely providing music, it’s getting people to engage around music. Given its parent company Tencent has become the leading force in global gaming—with control of League of Legends maker Riot Games and Clash of Clans maker Supercell, plus a 40 percent stake in Fortnite creator Epic Games, and role as the top mobile games publisher in China—its team is well-versed in the dynamics of in-game purchasing.

At first glance, the fact that Tencent Music has a lower subscriber rate than its Western rivals (3.6 percent of users paying for a subscription or digital downloads vs. 46 percent paying for a premium subscription on Spotify) is shocking given it has the key ingredient they each crave: exclusive content. Whereas subscription video streaming services like Netflix, Hulu, and Amazon Prime Video have anchored themselves in exclusive ownership of must-see shows in order to attract subscribers, the music streaming platforms suffer from commodity content. Spotify, Apple Music, Amazon Music, YouTube Music, Pandora, iHeartRadio, Deezer… they all have the same core library of music licensed from the major labels. There’s no reason for any consumer to pay for more than one music streaming subscription in the way they do for video streaming services.

In China, however, Tencent Music has exclusive rights to the most popular Western music from the major labels. The natural strategy to leverage this asset would be to charge a subscription to access it. But the reality is that piracy is still enough of a challenge in China that access to that music isn’t truly “exclusive.” Plus while incomes are rising, there’s extraordinary variance in what price point the population can afford for a music subscription. As a result, Tencent Music can’t rely on a subscription for exclusive content; it sublicenses that content to other Chinese music services as an additional revenue stream instead.

“Online music services in China have experienced intense competition with limited ability to differentiate by content due to the widespread piracy.” Tencent Music, SEC Form F-1

This puts it in a position like that of the Western music streaming services—fighting to differentiate and build a moat against competitors—but unlike them it has successfully done so. By integrating live streams and social functionality as core to the user experience, it’s gaining exclusive content in another form (user-generated content) and the network effects of a social media platform.

Some elements of this are distinct to Tencent’s core market—the broader popularity of karaoke, for instance—but the strategy of gaining competitive advantage through interactive and live content is one Spotify and its rivals would be wise to pursue more aggressively. It is unlikely that the major record labels will agree to any meaningful degree of exclusivity for one of the big streaming services here, and so these platforms need to make unique experiences core to their offering.

Online social activities like singing with friends or singing a karaoke duet with a favorite musician do in fact have a solid base of participants around the world: San Francisco-based startup Smule (backed by Shasta Ventures and Tencent itself) has 50 million monthly active users on its apps for that very purpose. There is a large minority of people who care a lot about singing songs as a social experience, both with friends and strangers.

Spotify and Apple Music have experimented with video, messaging, and social streams (of what friends are listening to). But these have been bonus features and none of them were so integrated into the core product offering as to create serious switching costs that would stop a user from jumping to the other.

The ability to give tips or buy digital goods makes it easier to monetize a platform’s most engaged and enthusiastic users. This is the business model of the mobile gaming sector: A minority percentage of users get emotionally invested enough to pay real money for digital goods that enhance their experience, currency to tip other members of the community, or access to additional gameplay.

As the leading music platform, it is surprising that Spotify hasn’t created a pathway for superfans of music to engage deeper with artists or each other. Spotify makes referrals to buy concert tickets or merchandise —a very traditional sense of what the music fan wants—but hasn’t deepened the online music experience for the segment of its user base that would happily pay more for music-related experiences online (whether in the form of tipping, digital goods, special digital access to live shows, etc.) or for deeper exposure to the process (and people) behind their favorite songs.

Tencent Music has an advantage in creating social music experiences because it is part of the same company that owns the country’s leading social apps and is integrated into them. It has been able to build off the social graph of WeChat and QQ rather than building a siloed social network for music. Even Spotify’s main corporate rivals, Apple Music and Amazon Music, aren’t attached to leading social platforms. (Another competitor, YouTube Music, is tied to YouTube but the video service’s social features are secondary aspects of the product compared to the primary role of social interaction on Facebook, Instagram, and WhatsApp).

Spotify could build out more interactive products itself or could buy social-music startups like Smule, but Tencent Music’s success also suggests the benefits of a deal that’s sometimes speculated about by VCs and music industry observers: a Facebook acquisition of Spotify. As one, the leading social media company and the leading music streaming company could build out more valuable video live streaming, group music sharing, karaoke, and other social interactions around music that tap Facebook’s 2 billion users to use Spotify as their default streaming service and lock existing Spotify subscribers into the service that integrates with their go-to social apps.

Deeper social functionality doesn’t seem to be the path Spotify is prioritizing, though. It has removed several social features over the years and is anchoring itself in professional content distribution (rather than user-generated content creation), becoming the new pipes for professional musicians to put their songs out to the world (and likely aiming to disrupt the role of labels and publishers more than they will publicly admit). To that point, the company’s acquisitions—of startups like Loudr, Mediachain, and Soundtrap—have focused on content analytics, content recommendation, royalty tracking, and tools for professional creators.

This is the same race its more deep-pocketed competitors are running, however, and it doesn’t lock consumers into the platform like the network effects of a social app or the exclusivity of a mobile game do. It recently began opening its platform for musicians to add their songs directly—something Tencent Music has allowed for years—but this seems less like a move to a YouTube or SoundCloud-style user-generated content platform and more like a chess move in the game of eventually displacing labels. Ultimately, though, building out more social interaction around music will be critical to it in escaping the race with Apple Music and the rest by achieving more defensibility.


Social – TechCrunch


Spotify ends test that required family plan subscribers to share their GPS location

September 30, 2018 No Comments

Spotify has ended a test that required its family plan subscribers to verify their location, or risk losing accessing to its music streaming service. According to recent reports, the company sent out emails to its “Premium for Family” customers that asked them to confirm their locations using GPS. The idea here is that some customers may have been sharing Family Plans, even though they’re not related, as a means of paying less for Spotify by splitting the plan’s support for multiple users. And Spotify wanted to bust them.

Spiegel Online and Quartz first reported this news on Thursday.

Of course, as these reports pointed out, asking users to confirm a GPS location is a poor means of verification. Families often have members who live or work outside the home — they may live abroad, have divorced or separated parents, have kids in college, travel for work or any other number of reasons.

But technically, these sorts of situations are prohibited by Spotify’s family plan terms — the rules require all members to share a physical address. That rule hadn’t really been as strictly enforced before, so many didn’t realize they had broken it when they added members who don’t live at home.

Customers were also uncomfortable with how Spotify wanted to verify their location — instead of entering a mailing address for the main account, for instance, they were asked for their exact (GPS) location.

The emails also threatened that failure to verify the account this way could cause them to lose access to the service.

Family plans are often abused by those who use them as a loophole for paying full price. For example, a few years ago, Amazon decided to cut down on Prime members sharing their benefits, because they found these were being broadly shared outside immediate families. In its case, it limited sharing to two adults who could both authorize and use the payment cards on file, and allowed them to create other, more limited profiles for the kids.

Spotify could have done something similar. It could have asked Family Plan adult subscribers to re-enter their payment card information to confirm their account, or it could have designated select slots for child members with a different set of privileges to make sharing less appealing.

Maybe it will now reconsider how verification works, given the customer backlash.

We understand the verification emails were only a small-scale test of a new system, not something Spotify is rolling out to all users. The emails were sent out in only four of Spotify’s markets, including the U.S.

And the test only ran for a short time before Spotify shut it down.

Reached for comment, a Spotify spokesperson confirmed this, saying:

“Spotify is currently testing improvements to the user experience of Premium for Family with small user groups in select markets. We are always testing new products and experiences at Spotify, but have no further news to share regarding this particular feature test at this time.”

Mobile – TechCrunch


Spotify Advertising: The Why and How

May 19, 2018 No Comments

This blog post gives you the rundown on Spotify, including why and how you might advertise on Spotify’s new self-serve ad platform, Ad Studio.

Read more at PPCHero.com
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How Spotify is finally gaining leverage over record labels

March 19, 2017 No Comments

 That’s why over the past few years, Spotify has been pushing five different paths to putting pressure on the labels to cut it a better royalties deal. They all hinge around the idea of making the labels need Spotify as much as it’s historically needed them. When Spotify launched in 2008, it had no power in the relationship since it had so few listeners. It needed to raise over… Read More

Mobile – TechCrunch


How Spotify is finally gaining leverage over record labels

March 19, 2017 No Comments

 That’s why over the past few years, Spotify has been pushing five different paths to putting pressure on the labels to cut it a better royalties deal. They all hinge around the idea of making the labels need Spotify as much as it’s historically needed them. When Spotify launched in 2008, it had no power in the relationship since it had so few listeners. It needed to raise over… Read More

Mobile – TechCrunch