Spotify is great, but the article paints it as the utopian fulfilment of the evolution of the music industry. While it would be wonderful (as a Brit) to think the European music industry has finally reached enlightenment, that's not the case.
* it's not "any song by any artist" (although it does pretty well). Recent releases are generally missing; certain artists (like Bob Dylan) and labels have opted out entirely.
* Spotify has negotiated a deal with the collection agencies to get its music catalog. If the agencies decide to renegotiate, they could essentially kill Spotify at will (like what nearly happened to Pandora, and forced them to block non-US listeners).
* the service doesn't "support itself" - last year it lost £16 million [1]. While I'm sure they have plans to reach breakeven, until they do they're dependent in principle on their ability to raise new capital.
* the "big four" major European record labels are investors and shareholders in Spotify, between them holding nearly 20% of the company according to some sources [2]. They probably (speculation) have board seats. In other words, the labels have significant control over Spotify's direction and decisions.
* the popularity of Spotify is a highly visible PR win for the music industry's political campaign. The EU and its member states are currently debating things like copyright reform and how to stimulate an IP-centric economy. The record labels, of course, lobby to keep the law exactly how it is, but with stronger rights enforcement measures (preferably in civil as well as criminal cases) and longer copyright terms. Entrepreneurs are calling for things like a compulsory music license for online broadcasting, meaning music startups could experiment with new business models with predictable costs, and without the massive existential risk of having to individually negotiate terms with the collection agencies. Spotify means the music industry gets to say "look, music startups are doing great!", hiding the fact that most prospective music startups won't ever have the chance to get the kind of licensing deal Spotify got by handing over equity to the labels.
I'm not meaning to bash on Spotify as a service - it's brilliant. But it's not an indicator that the music industry "finally gets it". The music industry is just as screwed and stupid as it's always been, and their backing of Spotify is so politicised it's hard to see it as a good sign.
* it's not "any song by any artist" (although it does pretty well). Recent releases are generally missing; certain artists (like Bob Dylan) and labels have opted out entirely.
* Spotify has negotiated a deal with the collection agencies to get its music catalog. If the agencies decide to renegotiate, they could essentially kill Spotify at will (like what nearly happened to Pandora, and forced them to block non-US listeners).
* the service doesn't "support itself" - last year it lost £16 million [1]. While I'm sure they have plans to reach breakeven, until they do they're dependent in principle on their ability to raise new capital.
* the "big four" major European record labels are investors and shareholders in Spotify, between them holding nearly 20% of the company according to some sources [2]. They probably (speculation) have board seats. In other words, the labels have significant control over Spotify's direction and decisions.
* the popularity of Spotify is a highly visible PR win for the music industry's political campaign. The EU and its member states are currently debating things like copyright reform and how to stimulate an IP-centric economy. The record labels, of course, lobby to keep the law exactly how it is, but with stronger rights enforcement measures (preferably in civil as well as criminal cases) and longer copyright terms. Entrepreneurs are calling for things like a compulsory music license for online broadcasting, meaning music startups could experiment with new business models with predictable costs, and without the massive existential risk of having to individually negotiate terms with the collection agencies. Spotify means the music industry gets to say "look, music startups are doing great!", hiding the fact that most prospective music startups won't ever have the chance to get the kind of licensing deal Spotify got by handing over equity to the labels.
I'm not meaning to bash on Spotify as a service - it's brilliant. But it's not an indicator that the music industry "finally gets it". The music industry is just as screwed and stupid as it's always been, and their backing of Spotify is so politicised it's hard to see it as a good sign.
[1] http://eu.techcrunch.com/2010/11/22/spotify-had-a-16-66m-los...
[2] http://techcrunch.com/2009/08/07/this-is-quite-possibly-the-...