Posts Tagged Spotify
Via @TheMusicVoid, posted by Decibel Music Systems
Music streaming platforms currently dominate the global conversation on the future of music, with debates touching upon streaming ethics, application survival, and monetisation methods. The usual suspects included in the discourse include Spotify, Deezer, Rdio, and Pandora. But in terms of on-demand streaming, Spotify leads the English-language media discussion. While Spotify holds 4 million paid users, its French competitor Deezer holds 2 million. Sure, only half the amount, as many journalists are keen to point out—but this will not remain a constant ratio in user growth.
The media attention around Spotify is no doubt a product of its presence and accessibility in English markets, particularly the UK and US. Deezer’s later entry in to the UK market and lack of presence in the US has made the French company seem less significant, seemingly following in Spotify’s wake and mimicking their overall strategy. While drawing immediate comparisons to Deezer seems logical, an evaluation of data aggregated from research, articles, and interviews carve out key differences in the applications, including business strategy and position, market dominance, user experience, and artist interaction.
Deezer focuses on specific, emerging markets with rising music consumption patterns, low customer acquisition costs, and high growth opportunities.1 They use telecommunications partnerships, like their initial collaboration with Orange in France, to compound their exposure in mobile as they release their product in key developing countries. Deezer hopes to secure these customers early in their mobile and digital music consumption habits.
Spotify continues to move in mature markets like the UK and US, gaining traction in the major global music centres. Their current challenge seems to be to secure US market by marketing their free service and securing a large user base to convert into paid-users with stiff competition from iTunes, Pandora, and Rdio. Note: Deezer currently does not have a free service and only has a trial offering.
Deezer operates in emerging and fast growing markets, including 35 Latin American countries, Asia, and soon Africa. This will no doubt influence the future artist partnerships and availability on the site. There will be closer attention to the greater access to internet, mobile payment systems, and smartphone accessibility in emerging markets.
Spotify will fight with major players in the developed and mature US, UK, and EU markets, while still pursuing other markets
Deezer is a browser based platform that considers its speciality in music discovery and recommendation service Nevertheless, as a browser-based application, it has its limitations: Multimedia keys do not work for control.
Spotify operates as a desktop application and can easily import local library music and playlists with easy navigation (as opposed to Deezer’s often noted clumsy online sync).
Deezer recently launched Deezer for Artists, allowing labels and artists to connect to fans on Deezer through social media aggregation and content curation.
Spotify’s app studio currently acts as a vehicle for fans to interact with artists. Artist apps, like those of One Direction, David Guetta, and Blur, are unofficial means for connection, but Spotify is expected to announce more features for artists.
While some might argue that these are merely semantic differentials and that the product offerings are identical, these factors still dictate how each company will proceed in their global business development and market acquisition patterns. The future of these two companies and their interaction will be something to watch, as Len Blavatnik’s (Warner Music) stake in Deezer may a major strategic future advantage for the company. It is also important to note that Deezer is reported to be a profitable company while the Spotify continues to publically struggle with its financial model.
Check out the table below which details music catalogue sizes territories launched in and core strategies moving forward for each service.
(Lessons Learned on Latin America’s technology and innovation investments)
Stanley Kubrick’s classic film feature title (Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb, 1964), a masterclass of cynicism and irony on the nuclear bomb race, could be used as an analysis for the current reaction towards new markets, in particular, Latin America.
International Business Development has become almost a limerick in current corporate meetings. This sort of strange riddle conjures up the idea of deploying (all or part of) the company’s businesses in new and undiscovered lands. This, by way of international trade, foreign direct investments, or special structure of capital in the newfound lands.
For North American ventures, a European “invasion” could be considered as an option, but under the current issues of recurring economic crisis in the euro zone, the Old World has lingered in a particular ellipsis…. European investments still consider investing in other neighboring countries as well as the Eastern European Nations, of which some could still hold a certain margin of growth and development. The other option -the next option- is Latin America.
To relive the experiences of Columbus in a fabulous odyssey is what many small (and not so small) companies dream of. Under the spell of globalization, new countries came to rise –for different reasons- and now we are living the rebranding of Latin America as an investment haven under the North American and European current weather.
Brazil, Colombia, Chile, Argentina (to name just a few) comprise a very important market that has caught the attention of many companies, more precisely those in the technology and innovation arena.
These newfoundlands have few technological applications to consume, but enormous amounts of information, a capacity for spending and a sustained and growing middle class that considers new technologies as a basic means of personal and professional development. See the recent explosion of smartphones in the region, the unceased growth of internet and hi-speed connections. Latin America is aware, at the same time, of all the latest devices and applications available elsewhere, but not locally (from all things Apple, other Smartphones, Netflix et al, Spotify, Rdio et al.). Local consumers therefore know all of these products, but cannot access them directly. They are simply waiting for them.
That is why it is logical that many North American and European companies have decided to launch international campaigns in Latin America, with uneven results. The primary reason is the way the approaches have been designed, since many of them lack the know-how when attempting to integrate Latin American markets. It is incorrect to invest in Latin America with the eyes and vision of a European context and European rules. Doing business in Latin America implies a concrete prior knowledge of the commercial arena, players, competitors, politics, history, social implication, as well as managerial implications. It might sound funny, but it requires a history lesson. European businessmen know that in order to do business in China, major cultural adaptations and numerous types of concessions must be made.
Recent news in the region might be –prima facie- less encouraging to investors, as some circumstances in the traditional Latin American environment might be seen as a menace to investments and their necessary stability. Nevertheless, not all nations, nor all markets in Latin America, are reacting in the same way. Each nation deserves a particular treatment for investments, for capital structure and for any strategy for future investments.
As a part of many other prior requirements to consider before embarking in the big international leap to any Latin American market, some situations can be considered as crucial. Firstly, it is necessary to previously obtain the most accurate data on the market, analyzing potential competition, with the help of trustworthy sources. Secondly, to understand the reality of the timing, to know how to explain the real scope of the potential business in a cultural language that will be clear for the market needs, including all other cultural innuendos. And finally, to be aware of the differences that each country possesses in the process of developing business. In sum, before beginning the adventure, lower your guard and accept help. It’s all about how to learn to stop worrying and to love the international development.
Some sectors are still a priority for the Latin American markets: Technologies and innovations in general, the markets surrounding smartphones and the revamping of traditional sectors such as the music, book and film industries. It is still early to act in these markets, as the growth, luckily, is still ahead.