By Benjamin Cohen
If Apple allows music lovers to run Spotify on its iPhones and iPods, it could destroy one of the computer giant’s main money-spinners, writes Benjamin Cohen.
Spotify, the music on demand service that aims to revolutionise the legal online music sector, today revealed that it is attempting to launch an iPhone application.
Its website has been hailed as a potential solution for the problem of internet piracy.
Spotify, based in Sweden (the hotbed of internet piracy) is pretty simple. You can for free create a playlist of all of your favourite music from scores of record labels. But it’s only free if you’re prepared to stick up with radio-style advertisements every so often.
For an advert-free service you need to pay £9.99 a month. But not many people have, and the company is reportedly missing its revenue targets. The key problem has been that with Spotify, you can’t take your music with you. That is, until now.The company today submitted an application to Apple for use on the iPhone and iPod Touch mp3 player. It works very much like the internet version except that your iPhone downloads tracks so you can listen to music, even when you don’t have an internet or phone signal – say, while you’re on the tube.
But having your music downloaded to your iPhone or iPod sounds rather like iTunes, Apple’s own music service that charges 79p per track. And that’s the reason some industry insiders think that Apple will block the service.
Apple guards its iTunes app marketplace very closely, carefully approving only applications that it deems suitable to run on its iPhone and iPod Touch.
It’s Apple’s system, so the company has absolute discretion on what applications can or can’t be used. Refusing to approve Spotify’s iPhone app might result in the company being accused of monopolistic practices.
Although Channel4 News was unable to speak to anyone at Apple today, I was told by one expert that they would have no fear of blocking a competitive product. “They don’t mind being seen as nasty,” he told me.
But if Spotify’s mobile service proves to be popular on other devices, this could actually deter new consumers from purchasing an iPhone. So it might not be in Apple’s interest to block it.
In a way, Apple is in a lose-lose situation. It’s dammed if it does and dammed if it doesn’t. Blocking Spotify might be unpopular, but allowing it could destroy one of Apple’s main money spinners: music sales on iTunes.
Although the politics between Apple and Spotify are interesting, it would be wrong to ignore the question of whether or not the Spotify business model really makes sense.
Assume you’re a consumer with a big bank of music you already own in one form or another. If you’re anything like me, you’ll have a couple of gigabytes of music on your mp3 player. Remember (unless you pirate), you’ve already paid for it.
Although the “all you can eat” mentality of Spotify - offering millions of tracks for less than a tenner a month - sounds impressive, you have to discount all of the music you already own.
You’d actually need to consumer an additional 151 new pieces of music a year for it to make economic sense to subscribe. Because that’s how many iTunes tracks you’d get for £9.99 a month (with a couple of pennies change).
I’m not sure I would consume that much new music, but then I’m nearly 27 so I’m probably a bit past it.
And let us not forget that Spotify on the iPhone isn’t that much different from Napster to Go, which offers all you can eat music for £14.99 a month - a service that isn’t hugely popular when compared to the attractions of pirated content and iTunes.
But Napster doesn’t work with Apple products, essentially because Apple doesn’t want it to work. And due to the popularity of Apple iPods, Napster never really took off. Ultimately it will be in Apple’s court that the success or failure of Spotify is decided.
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