Spotify’s streaming radio is close, but change is still necessary

Tom Dougherty, CEO – Stealing Share

22 June 2012

Spotify needs to differentiate itself from Pandora

Several months ago, Stealing Share wrote a three-part series on the streaming musical site, Spotify. With this series, we analyzed what Spotify was doing well and where it should hone its rebranding efforts.

At the time, we suggested that one of the mistakes Spotify was making (as were similar online music services, such as Rhapsody, MOG, eMusic) was that owning the music you listened to was simply not an option. Sure, these sites enable in-site downloading, but you have to remain tethered to the application to listen to music, which to me is a serious drawback.

While this remains a thorn in the side of Spotify’s brand, it has recently made positive waves with the addition of a free, streaming radio function.

Here’s what is smart about this addition.

“Spotify’s radio service is only as good as, say, that of Last.FM.”

When I think of streaming radio sites, Pandora immediately comes to mind. It, unlike the aforementioned musical applications, is merely a free, user-generated online radio service (you can pay for a membership without advertising). Through it, you type in almost any artist and you hear music by that same artist and similar ones. Through a focused cataloging of genres, Pandora has done an excellent job of finding similar artists for your unique radio mix.

streaming radioNow, Spotify is offering a similar, free, streaming radio option. This is essentially a free trial of the service, in which you can add a membership for the service (allowing immediate access to any song or album by a particular artist) – an option Pandora doesn’t have.

However, Spotify must consider a few changes to give Pandora the one-two punch.

If you examine the nitty-gritty of each site, Pandora is a very selective musical service. Not just any band with a recording of a song can submit its music to the site. Rather, Pandora has a team of listeners and a tough selection process for an album to be admitted. Ultimately, they select only 2% of all submissions.

Conversely, it is much easier to have your music included on Spotify. In fact, all you need to do is submit an album through a site like CD Baby, and it posts to the service if you select it as an option.

What this means is that, with Pandora, you can be content in knowing that you’re getting the best of all music. With Spotify, any artists who have categorized themselves like any other professional artist can be included in that streaming radio station too.

Spotify’s radio service is only as good as, say, that of Last.FM. (Last.FM allows anyone to upload a song to their site, tag it, and have it played alongside any other artist with the same tag). To me, this takes away the appreciation of the art and the professionalism of of the craft of music, and has made it a commodity that anyone can participate in. There should be a fine line and sites should work to create that line. Pandora has and Spotify has not.

Sure, there is something to be said for all musicians being given the chance to shine, but wasn’t this what killed Myspace too? It’s this double-edged sword that can kill these brands. Maybe a selection process is a good thing and everyone shouldn’t be allowed to play?

I do believe Spotify is on the right track by adding a streaming radio service, but it must become more selective with what it includes in its streaming service. If not, users will either remain with or return to the already selective service, Pandora.

The one caveat to that is, if Spotify adds a copy of Pandora’s model, it doesn’t take market share from Pandora, but simply stems any tide of those who switch in terms of usage. (Many music lovers have both.) To be more preferred, Spotify (or even Pandora, for that matter) must make its brand so emotionally powerful that it is coveted, regardless of its operational nature. Right now, they are becoming more and more alike, even in terms of brand.

In the end, these services are going to meld in the mind of consumers. Only a brand position that’s different and better will truly grow share.


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