Breaking Now: Streaming music service Spotify – born in Sweden but currently taking the UK and the rest of Europe by storm – has released a video of the iPhone app which they’ve just submitted to Apple, which means it could be out in a few weeks. They’ve also revealed more of their business model – mobile access on any device will require a premium subscription.
Interestingly, you’ll be able to use the app when there is no wireless connection. The application has an offline mode that allows users to temporarily cache playlists to their phone for use when there is no connection. The video shows how this works.
Keen observers will note that since Spotify allows access to millions of music tracks, why would Apple allow this app to go into the store and potentially compete with iTunes? Apple has allowed the Last.FM app into the store but this is more like a radio station – Spotify behaves like a jukebox, bringing up exactly the song and artist you want with one click.
However, it’s common tech industry knowledge that Apple makes fairly meagre profits from iTunes, as it’s largely a honeypot to get consumers to buy Apple hardware, sales from which form the bulk of their profits. So Spotify would not compete nearly as much as you might think – plus, making it a subscriber-only application on the iPhone further creates a barrier to competition with the iTunes store.
Spotify recently signed a deal to bring two million more tracks from indie labels to the services in preparation for a US launch expected later this year.
No way, José. Why would they approve an application that hurts their business?
mark: Because it would sell plenty of iPhones and that’s direct profit for Apple.
So is iTunes, what’s your point?
Never gonna happen in a million years. First, people need an Ipod Touch and a Pro account at Spotify.
I am sure most people won’t do that just to get the iphone application.
Apple understands that no matter how cool the toy, content sells hardware. Spotify shows a marked improvement in content for the iPhone and if the goons at the appstore really understand this business model (content sells hardware), they’ll allow Spotify.
They learned this lesson especially well with the Apple TV where content failed to appear and the device “failed” (at least in the first round).
Spotify should be approved, its a great content add for the iphone and imagine if Spotify only showed up on Android – that would be a reason for people to not buy the iphone.
So what happens when they release it for android phones, too?
In my mind – it makes ABSOLUTE SENSE – that apple just purchases this company outright and integrates their technology as a subsidiary – or even pushes some of their music stuff to a dedicated company.
Of course, the music industry would absolutely hate this – as then apple would be in control again. But still – cant see why with all the dollars sitting at apple they wouldnt want to either clone this technology or simply just purchase it.
Of course the other possible buyer would be Newscorp – may sit nicely with any respective myspace properities.
This looks pretty fly! Let’s just hope that Apple approves the App.
Anyway, congrats to the Spotify team and now please release the Andriod App
Spotify is not available in the U.S. Their site doesn’t really say when it will be available. Says “We will notify you as licensing agreements are established in your country”.
That’s sort of a bummer because this looks pretty kick ass.
Spotify have recently said that they hope it will be available in the US by “the end of the year”.
http://news.bbc.co.uk/1/hi/technology/8169971.stm
(Penultimate paragraph)
They aren’t available in the US, but if let’s say you live in Europe and *travel* a lot to US, with a premium account you can listen as much as you want (or 14 days with the free one)
Any idea why the iPhone app has been put through before the Android app, seeing as they demoed the Android app a while ago?
Any news when the Android app might be available?
Aaargh! It’s the Spotify advert voiceover guy!! He’s worked his way into my head and I can’t get him out. Damn you Jonathan from Spotify!
I would be surprised to see this let through. Why would you ever need to purchase music again? This really could hurt apples business. My money would be on apple saying no. Of course if they allow it they perhaps could stipulate that the offline mode be taken out thus meaning buying iTunes content would still be beneficial.. But aren’t spotify about to start selling music too? ( if that’s not already being done).
However I would love to see this app.
It’s quite good to see a British product being sought after by Americans for once. Lets hope it gets in. I just don’t see it happening. If they did.. What’s in it for Apple?
Did you not read the article? Clearly states ‘born in Sweden,’ as in, the app was created in Sweden, not the UK.
sic transit gloria Britannia
Britanniae
This won’t be rejected by Apple. They make money on hardware, not the music store.
My questions:
1. Is this only for the premium subscribers, as I’ve heard Spotify say, or is it for all users?
2. Can we please have it in the US already? This app is too good and I can’t wait until the end of the year.
Then why did they reject the itunes-like music manager. And the alternative browser app. And the Google Latitude download app.
I don’t know what iTunes manager you’re speaking of but you can run alternative web browsers as long as they’re Webkit based. The SDK says you can’t run executable code which is why you won’t see Gecko browsers. As for Latitude you’d have to ask Apple or Google because there are already a lot of apps that have the same kind of functionality.
Well, that:
“This won’t be rejected by Apple. They make money on hardware, not the music store.”
is a bit silly really. I might agree that the revenues Apple generates from hardware sales are much higher than the revenues Apple generates from it’s Music business. Apple however is a software company in it’s heart. A lot of it’s success, especially when it comes to their portable products (iPhone, iPod etc.) lies in the close combination of iTunes and their hardware.
In opinion at least.
right. what would ipods be without itunes? another mp3 player.
spotify has loads and loads of fans who would be willing to download the app and install it with the ad hoc method anyway.
if they don’t approve it, we would end up with the odd situation where android phones have a better alternative to itunes, and apple does not want that.
Well, that:
“This won’t be rejected by Apple. They make money on hardware, not the music store.”
is a bit silly really. I might agree that the revenues Apple generates from hardware sales are much higher than the revenues Apple generates from it’s Music business. Apple however is a software company in it’s heart. A lot of it’s success, especially when it comes to their portable products (iPhone, iPod etc.) lies in the close combination of iTunes and their hardware.
In my opinion at least.
Not sure how this ended up here twice. Sorry.
The margins in the itunes store aren’t nearly as high as the margins on the hardware. So the question with apps like spotify is: Do we allow an app to cannibalize our low-margin products? Or do we encourage them to go elsewhere and give competitors a killer app that eat our high-margin products?
My point exactly.
I agree. But at the same time as i pointed out below, Apple’s hardware reveunes are closely tied in with the Software they are providing. Right now they are in the great position that iTunes has no competitor on their own platforms.
Now, if i have to place a bet i would tend to say that Apple WILL approve the app eventually.
Ultimately I think it means very little to Apple where they get their music as long as they are within the Apple ecosystem. Spotify will not disrupt that. The Spotify app will still live within the Apple ecosystem as an iPhone app.
Also, I wouldn’t rule out Spotify being bought out by someone like Apple considering they have $32 billion in the bank to play with.
Impressed that it allows users to temporarily cache playlists to the iPhone, will definitely check out this app when it’s released!
it will get approved. Apple cannot be seen as a dictator, if someone else has made a cool app that good for them. the point is Apple cannot lose because of hardware sales. Refusing spotify is like free marketing for the product which effectively will hurt Apple worse.
Apple is very much still in the driving seat!
i agree, if the loose the sympathy it will hurt them in the end even more.
Great news for iPhone customers I think healthy competition is always a good thing. Apple will still make money out of selling the app.
we really need a symbian version of this too
It’s in development. That said, since there’s CWM I’m not sure Nokia will use it.
…
Actually, they probably will – Nokia aren’t uptight about these things.
I don’t know if Apple will approve spotify application. Spotify has an agreement with 7 digital. When someone wants to download a song listened on spotify, she’s directed to the 7digital retail platform. Maybe they have to change this in favour of itunes store to get an approvation.
I believe they will approve it. If they don’t they will have legal problems…
Apple will approve it. And I bet they even put Spotify on the iphone adverts as well. Apple have a very clear vision. They are a consumer hardware business. They only make software when there isnt enough content to sell their hardware.
They got into the itunes business only because record companies were trying to shut p2p down. Apple saw the itunes store as a way of getting people to easily load up on content (and get the record companies off their back because of the “rip and burn” adds Apple were running at the time) . Apple are not a charity and are not ego-driven (like MS is). If it’s going to sell more devices in the long run they are going to allow it.
When looking at what Apple will do in the future always look at the bottom line. They are the most revenue motivated company in the sector, they just have great PR that make them look like a charity or something.
Finally, not having the spotify app would kill them marketing wise. When “joe” realises that he can get an android phone and never have to pay for a track again (because he can run the spotify app he is already familiar with), joe will not buy the iphone.
Apple cant afford that to happen, so they will have to approve the Spotify app. Not doing it would provide too much marketing amunition to Nokia, RIM and all the Android phone companies.
“Apple have a very clear vision. They are a consumer hardware business.”
“They got into the itunes business only because record companies were trying to shut p2p down”
“Apple saw the itunes store as a way”
Bold and assumptive assertions, I assume you sit on the Apple board then ?
Completely agree. It´s interesting that the the Ipod was a success (released 2001 with an at the time astonishing 5 gigs of storage) long before Itunes was created in 2003 (with a very modest 100 000 songs available for purchase i).
Apple allowed people to fill their Ipods with illegal content for almost two years before Itunes made it slightly easier to be legal. But I still think Apple is a hardware
company at its core. Spotify will simply make Iphone and Ipod touch much better devices. Thats all that matters in the end.
Just wanted to point out that I agree with albsure….
Wow, really interesting stuff
Truly killer app. I hope this makes it into the app store.
>>However, it’s common tech industry knowledge that Apple makes fairly meagre profits from iTunes, as it’s largely a honeypot to get consumers to buy Apple hardware, sales from which form the bulk of their profits.
I’d like to see the figures on this “common knowledge” assertion. Firstly because I’d like to know how much they are making from the music store and secondly because I suspect the author was too lazy to track down the figures and so went with
>>However, it’s common tech industry knowledge that Apple makes fairly meagre profits from iTunes, as it’s largely a honeypot to get consumers to buy Apple hardware, sales from which form the bulk of their profits.
I’d like to see the figures on this “common knowledge” assertion. Firstly because I’d like to know how much they are making from the music store and secondly because I suspect the author was too lazy to track down the figures and so went with an unsubstantiated “common knowledge” nugget.
James: Apple take about 20% of every sale on the app store. Thats like 20p in Uk money for a single. 20p x (lets say a billion singles) is 200m pounds. That might sound a lot, but Apple’s revenue in the last quarter was $8.34 billion! (£5.08bn)
Consider the bandwith cost to serve the billion singles and I would be surprised if Apple made anything more than a modest profit. On the other hand the profit margin from their hardware is legendary. Thats why they make their billions.
The itunes store is almost a loss leader in the same way that supermarkets sell cd’s for £5 pounds to drive up sales of their other products. (n.b. Itunes does not operate at a loss however, apple just dont like to see the word “loss” anywhere on a balance sheet).
My opinion is that apps like spotify would probably allow apple to sell more phones and mp3 players rather than destroy sales. Since the average ipod owner buys very few itunes songs per ipod, it would be fair to assume that demand for ipods are not closely tied to demand for itunes songs.
It seems that the ability to get/play/download music from anywhere is what drives mp3 player purchases, not a “particular” mp3 store.
Apple would be insane to approve the distribution – it’d be a slow death for them.
I’d like to see it though. Spotify has been one of the best startups I’ve seen for quite some time.
If Apple does not approve it, it could be a way to change to Android platform
http://www.wired.com/epicenter/2009/05/spotifys-android-app-should-frighten-apple/
I think the overlap between Mac users and Spotify users is quite high (in Sweden at least), and we all now how we love to hate our beloved Apple when they do something wrong.
Approve this or face a shitstorm
I for one have got my angry twitter finger ready
Apple will have to either create a service that completely mimics Spotify or they will have to buy it. Spotify will just go to Android and Pre phones if they are rejected (they will probably go there no matter what). Sometimes a company just does a good job at something so the bigger fish has to buy them i.e. Amazon/Zappos. It’s a good thing for start-ups to know this still exists.
Who would pay £10 or $10 a month to have this App on their iPhone, especially as it doesn’t feature songs from Three of the biggest ever UK Recording Acts.
The Beatles, Led Zeppelin & Pink Floyd.
Spotify is a great start-up, but it ain’t perfect yet.
Moe, if you love the ‘big three’ then you’ve probably already got their MP3s on your iPhone/Pod… Spotify certainly doesn’t have everything I want, but it has a LOT more than ANY other service (at that price) and it is without doubt the best ‘music discovery’ service out there IMHO. iTunes give you what 30seconds of a track? I could see them increasing that to a single, whole, track (just once).
Just cant stop my self to comment on your blog. Good post.
That will be real hardcore decision let see what iTune are up to.. Nice info
Got any idea how much off-line content you can download and how long before it expires?
If they approved, what is the next ? I have no idea.
How about a free, legal music festival just using Spotify playlists?
http://www.invisiblefestival.org
Check it out. We have 50 VIP spotify passes to give away for the weekend so you can listen advert free
mark
Dont hold your breath I have been waiting for my http://www.appgiveaway.com iPhone app for over a month and I still havent had no reply back from Apple other than we are reviewing it. Reviewing what exactly???? I dont know!