Why Spotify will be the hit of 2011

By Peter Sims
August 12, 2011

By Peter Sims
The opinions expressed are his own.

I’m going to take a risk here, so bear with me and I will appreciate your views and reactions, but I think Spotify, the digital music and sharing service is going to be the product of the year and here’s why.

Let’s start with where online users find value.  I agree with David Pogue’s assessment of Google+ in the New York Times: that the most promising and innovative aspect of the offering is Circles (we should also add the chat functions).  While Google is (understandably) not releasing detailed Google+ usage stats, early anecdotal evidence would suggest that users aren’t really using, or valuing Circles – not yet at least.

But if there’s a golden opportunity in social networking, where the greatest user experience value gets generated, it’s to create more intimate connections between people.  This helps explain why Facebook users raved about being able to connect with long-lost friends or acquaintances from high school or college when they first logged in, as well as why Facebook’s growth jumped to an entirely new level after enabling photo tagging in 2006.  As David Kirkpatrick reported in the Facebook Effect, 70% of users began coming back to Facebook every day, while 85% started coming back weekly.

People feel connected to other people by seeing their pictures, their expressions and particularly their eyes.  But that need for moments of intimacy may be getting sacrificed by too much noise on Facebook, e.g. too many acquaintances, and a fear of saying the wrong thing that might jeopardize your job, career prospects, or family standing, since everyone from your boss to your rents are often on Facebook. This is something Google+ has tried to sell with Circles, that you can create spaces to be yourself with your real friends, without having to worry about your boss or your rents or some nut job who somehow ended up as a “friend.”

I’m sure Mark Zuckerberg and the Facebook team is keenly aware of this problem and opportunity, and strategizing about it.  That’s where Spotify comes in.

As early users know, Spotify has a user interface that is very similar to iTunes.  You can type in pretty much any band or song and access songs that you can then put into playlists, and access those playlists from your desktop or phone application.  However, you don’t physically own digital files; they sit in the cloud.  Lastly, the Facebook interface allows you to see what public lists each of your Facebook friends has.

Although it’s only a few weeks old in the U.S., Spotify offers users something analogous to what tagged photos did.  Aside from the fact that you can find and have immediate access to basically any music on Spotify that you could with iTunes, the elegant Facebook interface, and ease with which people can share playlists with your Facebook friends is brilliant.  With 175,000 paid accounts and 1.4 million total users in the U.S., early evidence would suggest that Spotify is ramping up very nicely.

In general, people love getting exposed to new music, and sharing their favorite playlists with others.  Your favorite music is a powerful form of individual expression, and when you find others who share those interests, you feel a closer connection, even if you hardly know them from in-person interactions.

Of course, it’s too soon to tell how Spotify usage will unfold in the US, but early indications via the blogs, Twitter, and elsewhere suggest strongly positive experiences, and rapid user adoption, with few complaints.  Spotify seems to have combined the best aspects of social with music, including an improvement on iTunes.

This is why Spotify is once again – like the rumors about acquisition talks with Google for around a $1 billion price-tag last year (as well as rumored talks with Apple) – one of the most attractive acquisition targets for Google, Facebook, and Apple.

That’s why I wouldn’t be surprised if Facebook, Apple, and Google aren’t talking with Spotify about an acquisition very soon, if they aren’t in active discussions.  (Side note: who wouldn’t love to be a fly on the wall for a negotiation between Facebook execs and Spotify investor and former Facebook president Sean Parker?).

Anyhow, that’s just my two cents.  As I like to say, I’m only an “n” of “1,” so I really look forward to your views and reactions.

2 comments

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I have loved music subscription services for years, and am happy to see Spotify finally garnering the attention and publicity I’ve thought they’ve deserved.

Their aggressive free offering and simple social features combined with a broad music selection are something other services have offered part of before, but not quite as simply or comprehensively as Spotify has. Spotify still isn’t perfect but I’m hoping their success means we’ll continue to have one or more of these sorts of services available for the long term. I just signed up for a year of their Premium service. :)

Posted by karmamule | Report as abusive

I couldn’t agree more…I’m fixated on my friends’ lists and notice when they’re listening to things off of mine. So far it’s infinitely more compelling to me than Google+, of which I am skeptical but fatalistic (I can’t say I really love the relative openness of it compared to Facebook…but I’m more of a Twitter person, anyway).

Posted by ELock | Report as abusive