/grammarnazi

Companies always make money off of temporary monopolies. What always happens is that other people, let’s call them Hitify, also want to make money and claim a part of this temporary monopoly. To do so, Hitify invent an even better service to take market share from Spotify. And this is exactly what’s so awesome about a free market and competition. We move towards increasing efficiency, less waste and better services for everybody. The musicians (who are adding value to the loop) also get more efficient marketing and distribution this way since music distribution and viral marketing becomes more efficient and less wasteful. Great musicians have nothing to gain from inefficient distribution and marketing. Quite the opposite.

So what if someone who is not adding value has the option to strangle this free market competition? Like, say, record labels who’s only “contribution” to the loop is that they can keep music away from listeners and potential fans by granting rights to “their” music to just one service? Then there is nobody who can challenge Spotify with a better service, and thus, Spotify don’t have to improve one bit. They will have the monopoly anyway, granted to them by the state… sorry… The Cartel. This is destructive for everybody, except those who claim value without contributing any – the record labels. I saw you using the word “parasite” above, and this is where you find the true parasites. (Chilirec is adding value by providing free distribution and marketing to musicians).

And it is exactly for this reason – to keep people from destroying productive competition – that we have legislation against this type of anti-competitive behavior in all free market countries. In other words, creating a cartel like the record labels have done is not only destructive, but also illegal. Chilirec have rightfully sued them over precisely this, and I hope for all of us that they win so that Spotify gets some healthy competition. We will all benefit from this, Spotify included. Even the people at the record labels will actually be better off since they can now move on to some productive activity where they can start creating value again. Parasites cannot be happy.

Ususally I think you´ve got some interesting things to say…but this..I don´t understand your point. What´s the problem? the industry finding new models good for them AND the consumer. You don´t have to pay if you don´t want to. The “free-service” is still good but the premium version is even better. Chilirec don´t want to pay for the content as Spotify do. They´re just another parasite. You can choose to publish your free content on myspace or any of those shitty sites where you don´t find anything unless you´re a geek spending hours in front of the computer. Spotify is a thing that MIGHT be good for all stakeholders. If they start making money in different ways co-operating with the business I don´t see a problem. Why shouldn´t the business protect their assets? Now thay found a way making it easier for everyone.

1. Barriers of entry are very high since The Cartel are killing off every Spotify competitor as we speak by throttling their access to music. Chilirec is a clear example.

2. Spotify for iPhone requires you to buy a premium account. They could never have done that if they didn’t have the monopoly granted by The Cartel. This is abusive in my eyes.

It is of course easy to imagine, and in fact there are already companies (I won’t use the word label) that provide the exact business model you recommend – music as promotion for experiences or tangible things. The young artists of today will understand this and it will grow as some sort of indie/underground movement, which is by the way the exact way that every new genre appeared: independent and wild at first, commercialized later.

All of this of course is implying that Spotify will do evil, which they like Google have yet to do. Personally, I think the deal offered by Spotify today is a fair one, but this might of course change – with great power comes great responsibility. But one of the benefits of the new digital world is that since barriers to entry are ridiculously low, it will be easy for someone better to come along and steal the users away. Just like Apple first got them, and then Spotify & co stole them away. It will be especially easy if you have the backing of the artists themselves.

Not sure how far to push this analogy, but in case we want to push it further, our hope now stands to the offspring of Spotify (through the open API) to amass a rebellion and save the universe.

Funny how the Stockholm Globe Arena has certain similarities to The Deathstar too.