Archive | August 2012

Spotify vs. Rdio

Since the spring I have been using Rdio to stream music on demand. As their free version allots you a given amount of listening time before waiting for it to replenish (not sure exactly the quota), I preferred it to the free version of Spotify that plays advertisements after each song. I probably used the free Rdio for about 6 months, until sometime recently when my listening allotment was no longer able to be replenished. I surmise that with this strategy they are attempting to convert longtime free users into paying subscribers. My reservations towards getting the subscription are primarily financial. I say that not as someone who has reservations about paying for music, but as someone evaluating a monthly subscription service. Paying to own is straightforward, paying to access is less so. Would I use the service often enough to warrant the $9.99 monthly charge?

I wanted to test this out before committing money to a service. Interestingly enough, Spotify offers a month trial period (though they cleverly require your CC to begin the trial) whereas Rdio only offers a 7 day trial. In addition to Spotify’s better offer to me, I was pondering if joining either service would be more beneficial to music creators. I theorized that since Spotify has a substantially larger user base and is paying out more total $ to music creators, my joining Spotify would theoretically benefit those creators down the road by growing that service. So, two weeks ago I started Spotify premium for a free month, granting me unlimited on demand streaming access on any web/mobile device.

Since then, I have enjoyed using Spotify but I have started to reconsider my assumptions about the advantages of choosing it over Rdio. Thinking solely as a rational consumer, I should want to subscribe to the BEST service possible (in my best interests), not the service that is in the best interest of others. The theory being that over time, users will flock to the best service above all else. [So I started the Rdio 7 day premium trial, to compare the services]. Which brings me to the real discussion: which service is better from a user experience standpoint, Spotify or Rdio? The criteria is: a) catalog – is the music I want available? b) functionality – does the service/apps work well/fast/do what they’re supposed to do c) user experience – is it enjoyable to use/are the features laid out well?

As far as catalog, it’s basically a wash. I can’t say that I’ve spent hours and hours scouring both services’ catalogs in search of what is or is not available, but for the most part the same albums that are on Spotify are on Rdio, likewise the same albums are mostly unavailable on both. I might give a slight edge to Rdio since they and not Spotify have one of my favorite albums, Glenn Lewis’s “World Outside My Window.” In all seriousness, I imagine that because it’s perception is less polarizing than Spotify’s, there are probably a few more older albums available on Rdio. But new releases I can’t imagine an advantage for either.

Functionality is a tough category to judge, and granted my entire assessment can only be so objective. Again, I think it’s virtually a tie. In terms of desktop computer use, Rdio offers a desktop client and in-browser web-based streaming, whereas Spotify forces you to use their desktop client. As far as basic usage, they both work very well. Spotify has its famous Facebook friend column on the right side of the application, enabling users to see what their Facebook friends are currently listening to on Spotify. Rdio has not incorporated as much sociability into its app, although it does send notifications to Facebook of each track/album you play. Both of their respective mobile apps are very serviceable. From limited observation I would say Spotify mobile streaming is a bit faster/more reliable. Songs perhaps load a bit quicker and play with fewer interruptions in Spotify. Overall, I’m impressed with both mobile apps.

Searching for songs – this overlaps between the categories of functionality and user experience but is a crucial aspect of using on demand streaming services. I give the edge to Rdio here. If you search on Spotify by artist, you get the “top songs” by that artist, plus their discography in chronological order from most recent to oldest. On Rdio, you get the artists’ top albums first, then their top songs. In my opinion, this is a huge distinction and advantage for Rdio. Finding a song is equally easy on both services, but finding an album is much easier on Rdio. On Spotify I have to scroll down through numerous albums, often cheesy compilation albums (if it’s an old artist like Marvin Gaye for example), but Rdio points me directly to the Marvin Gaye albums I want. Big win here for Rdio.

To user experience, in terms of design and aesthetics, I give Rdio an edge, but there is a caveat. Rdio’s color scheme is not original. It’s white and blue, just like Facebook, Twitter, Foursquare, and who knows how many other interactive brands these days. As for Spotify, it’s black. The functional design works, but aesthetically it’s uninteresting. One aspect of Spotify I prefer is in regards to mobile playback (iOS). When you are playing a song, Spotify offers a scrub fast forward bar on the bottom of the screen, while Rdio uses a scrub bar in the same location for volume control. To fast forward a track in Rdio’s mobile app, you have to tap the screen and scrub forward on a much smaller drop down bar. The distinction is subtle, but for me Spotify’s way is much preferable. No other features have really stood out, but I may revisit this in the near future.

I don’t know if I can crown a clear winner just yet. A combination of each platform’s best features would be ideal. Here’s to hoping something like that comes along in the near future.

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Do Streaming Services Make Sense For Labels/Artists?

Metal record label Century Media was recently in the news for deciding to bring (at least some of) their catalog back on Spotify. Without going into the pros and cons of using streaming services from a consumer perspective, I want to address from a record label’s perspective a few basic issues I see with distributing music on streaming services.

Century Media is not the only label to vacillate back and forth on the streaming services question, and for good reason. It’s clear without a doubt that direct profits from streaming plays are negligible (there are many variables that impact the actual payout figures, but as a rough estimate it takes over 150 streaming plays to earn $1). Labels do earn money from streaming services, but the profit amounts are meager in comparison with regular retail profits. Still, publishing your music on streaming services has benefits, but not universally. I believe labels have to consider their artists individually and whether it’s appropriate for that particular artist to have their content on streaming services.

(Huge caveat for my argument: I don’t have a confident answer as to whether or not streaming use erodes potential retail sales. Are streaming and retail complimentary? I’m assuming they are not completely complimentary, and that more people would purchase a given song if they were not able to stream it for free. Of course, that’s what everyone thought before Napster came along 10 years ago. And now we have Pirate Bay / Bit Torrent, which is Napster on steroids. But hear me out…)

I think artists can more or less be grouped into 3 categories, although the distinctions between these categories is very subjective as well.  The categories are: emerging, established, and stars. Unequivocally, emerging artists should have their music on streaming services. It helps gain exposure and build a fan base. On the other hand, stars should not have their music on streaming services. From a business perspective, there is no reason why Taylor Swift, Beyonce,  Justin Bieber or any artist selling a million records should be on Spotify.

At some point in the future, selling recorded music may not be feasible, and then the conversation changes. But today music still sells. Artists like Taylor Swift have fans that are willing to pay for her music, so why give it away to them for fractions of pennies? I heard an anecdote today about digital sales along those lines. A track on iTunes typically costs .99 ($1.29 for higher quality / premium artists). Taylor Swift’s manager allegedly wants to sell her tracks for twice that much, and they’d probably sell almost as many units at that price.

However, stars like Taylor Swift represent 1% or less of all artists. But it does raise the question of whether variable / demand pricing should be applied to music sales. Taylor Swift tracks could sell for $2, while an artist like Michael Kiwanuka could sell tracks for $.25. I would buy his debut album for $2.50, but not at its current price of $7.99. Why should all tracks and albums be worth the same? Why should we restrict music sales to traditional retail pricing tiers? What if the lead single was $.99 but all other tracks $.69? (I didn’t see my argument going in this direction, but at the moment this seems like a compelling idea, aside from the accounting nightmare it would inflict, and no doubt other serious ramifications).

To rehash the main point, making your music available on streaming services is a yes for emerging artists but a no for stars. Most artists would likely fall under the “emerging category,” but I would say about 10-20% fall under the “established” category. For these artists, it’s less clear whether or not having their music on streaming services makes sense. Established artists gain the same marketing and exposure benefits as emerging artists, and the detriments (decreased potential retail sales opportunities) are less since potential retail sales for their music are less. I think an important variable is whether the artist is on tour or planning to tour. If they are on tour, it makes sense to utilize streaming services to help build fanfare in other states and countries. If the artist is not on tour, it’s perhaps best to concentrate on retail sales. Of course, getting into the practice of toggling an artist’s catalog on and off streaming services based on these types of variables could alienate fans. There are so many unknowns in this entire equation.

What is clear, ultimately, is that music is more popular than ever. Digital music sales are still increasing, while physical sales continue to decrease. Touring is accounting for a larger portion of revenue than ever before. The sales are in there somewhere. I look forward to returning to this topic in 6-12 months, I’m sure the landscape will have changed again.