Home
Spectators
Alan Kohler

Robert Gottliebsen

Stephen Bartholomeusz

Stephen Koukoulas

Jessica Irvine

Rob Burgess

Steve Keen

Michael Gawenda

Oliver Marc Hartwich

Ben Potter

John Lee

Tristan Edis

Supratim Adhikari

Jackson Hewett

The Distillery

Scoreboard

Keith Orchison

The Conversation
Alan Kohler
Alan Kohler is one of Australia’s most experienced commentators and journalists. Alan is the founder of Eureka Report, Australia’s most successful investment newsletter, and Business Spectator, a 24-hour free business news and commentary website. He also hosts Inside Business, a half-hour Sunday programme on the ABC, is the finance presenter on the ABC News - and producer of the nightly graph (or two).
Economy
Australian News

Global News
European Crisis

Global Financial Crisis

US Economy

Asian Economy

China

Commodities

Interest Rates

Tax

Productivity

Leadership

Innovation

Reserve Bank of Australia
Latest stories
WEEKEND ECONOMIST: Slip, slipping away
The federal budget revealed a worrying trend for the Australian economy, with disinflation a factor in the revenue slippage that led to the deficit.
Delinking indicators warn of a fractured system
The long-standing correlation in global economic data is being challenged. It reveals profound tensions underneath the world's central bank-inspired stability.
Markets
ASX
ASX Indices

Major ASX stocks

Markets Spectator

Breakfast Deals

Currency

ETFs
Latest stories
MARKETS: Riding the emotional waves
Hedge fund manager David Hobart says the key to investing is being aware of the emotions that drive markets – and how you manage your own.
MARKETS SPECTATOR: The local yield story is over
Tim Toohey says yield hungry investors will search outside Australia for markets that offer better returns.
Politics
Australian Election

Federal Budget

International News
Asia

Europe

USA

National Affairs
Latest stories
A subtle shift for Abbott's razor gang
After months of campaigning against 'wasteful' Labor management, Tony Abbott will be aware similar scrutiny will apply to his government, should the Coalition win.
WEEKEND ECONOMIST: Slip, slipping away
The federal budget revealed a worrying trend for the Australian economy, with disinflation a factor in the revenue slippage that led to the deficit.
Technology
NBN Buzz

Mobility

BYOD

Smart Devices

Emerging Tech

Applications

Big Data

Cloud Computing

Data Management

Reviews

Social Media

Start-ups

Security

Data Security

Identity Management

Wireless Security

Telecommunication
Latest stories
Why Google Music's stuck on repeat
Google's new product announcements typically impress. But this latest announcement about Google Music shows that the company is happy to copy other incumbents and not blaze its own path in the digital music scene.
The evolution of the social media advisor
The newly created role of the social media adviser is one shrouded in mystery. Part PR, part digital media specialist, it's yet to fully understand its place in Australian politics.
Climate
Carbon markets

Energy markets

Renewable energy

Resources

Solar energy

Wind power

CleanTech

Science & Environment

Green Deals

Policy & Politics

Smart Energy
Latest stories
Is this the end for Labor's 'CarbonChoices'?
Whispers in Canberra suggest Bill Shorten is canvassing the numbers for support on a huge Labor carbon pricing backflip after the election.
Obama's climate agenda nears judgment day
The US Supreme Court's decision whether to take up any of the petitions against climate change regulations could shape or shatter the Obama administration's efforts to solidify its climate change agenda.
Industries
Advertising and Marketing

Agribusiness

Automotive

Aviation

Construction and Engineering

Education

Family Business

Financial Services

Food and Beverages

Gaming and Racing

Health and Pharmaceuticals

HR

Industrial relations

Information Technology

Infrastructure

Insurance

Manufacturing

Media and Digital

Resources and Energy

Professional Services

Property

Retail

Telecommunications

Transport and Logistics

Small Business (SME)

Tourism
Video
CEO Hub

KGBTV

Leadership Lab

Management Insights

Young Leaders

EurekaTV
Latest videos

How to build a service business in China

King and Wood Malleson's China Partner David Olsson explains how Australian companies can tap into the huge demand...

KGB: ANZ CEO , Mike Smith

KGB: Mike Smith
Knowledge Centre
Investment Tips

Webinars

eBooks
Featured stories
Download the December CEO Pulse survey
CEOs outline changing views on corporate spending and profits, their economic expectations and political dissatisfaction, including advice for Julia Gillard and Tony Abbott.

TECHNOLOGY SPECTATOR: The audacious app trying to take over TV
UK-based Zeebox wants to be the intermediary for all social media-television interactions. It will not only have to lure viewers, but the networks themselves.

Spotify breaks out to an MTV beat

Ben Shepherd14 Dec 2012, 8:28 AM1

Following in MTV's footsteps, on-demand music service Spotify is aiming to take on the industry by creating individual connections between users and new music.

You must be logged in to read this article

Not a member yet? Register today ›

Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like

Register now ›

"Nobody falls in love with a jukebox, you have to bond with a human being.”

So said MTV founder Bob Pittman in the book ‘I Want My MTV’. Pittman made the quote around MTV needing a mix of on-air personalities to help define the character and make-up of the brand. The solution for Pittman, according to ex MTV exec John Lack, was to find "a black person ... a girl next door … a little sexy siren … a boy next door … and some hunky Italian looking guy with curly hair.”

These quotes were made just prior to when MTV launched. That was in 1981. It’s now 2012, and one could argue that Pittman’s vision still defines the network, even if they don’t play much music anymore. However when it launched (and did play music), MTV quickly emerged as a legitimate challenger to US radio and served to diversify the music acts broadcast to America’s youth who were being fed old album oriented rock through most radio stations. MTV opened up the US to a huge plethora of new acts, from Prince to Duran Duran to Motley Crue and even Michael Jackson.

The situation was relatively straightforward. There was a lot of music available – a stack of bands from North America and the rest of the world – and accessing their music was difficult. Radio playlists were conservative and generalist and of little relevance to anyone under 24.

You could argue right now we’re in a similar situation. And like in 1981, a new challenger is emerging. Well, challengers.

After having no real legal 'on-demand' music service of quality for years, early 2012 saw a plethora of the services launch. Most of them work in a similar fashion. Pay a monthly fee (say $8, $12, $20) and you get access to unlimited music on your PC and mobile. Some allow free use of the PC version, but with ads spliced within the music and limited functionality. Most allow some element of social plug-in, play listing, search function, recommendations and most can connect with other music services to enhance the experience.

From an onlooker's perspective, what I see are a heap of similar products. They are good products, they function well and technologically are impressive. But they are all very much alike and that can pose an issue in the fight for the consumers' love. They are not entirely dissimilar to ISPs – functional, high tech, but effectively a commodity. However unlike ISPs, there is not room for six or more on-demand music services in a territory like Australia. Well, not if they all want to run at a profit.

The market leader right now is Spotify. It is well funded, backed by some heavy hitters and is expanding rapidly. In Australia it has over 450,000 people using the service via a web browser, more if you count mobile and tablet. And last week, at a media session in the US, Spotify emphasised the importance of curation in the product moving forward.

Founder Daniel Ek summed up the current issue in a nutshell: "Spotify is great when you know what you know what you want to listen to, but not so great when you don't.” What Spotify is trying to do is differentiate itself by attempting to be the best at helping users find music they will love. Music that will inspire them. Rather than being a huge database of music, it has realised it has to connect the user and the content to truly demonstrate value to both sides. After all, that is what both are looking for. The user wants great entertainment, the talent want to increase their fan footprint and create fanbases they can monetise via more lucrative live music, recorded music and merchandise sales.

When MTV’s Bob Pittman made the quote at the beginning of this piece, he knew that – like Spotify's strategy now – what MTV did was easily replicated. It played music videos made by someone else, paid for by someone else, on TV. But he knew that personalities – exclusive on air talent – could give the channel a real point of difference and offer consumers something of value. It’s the same reason MTV got into creating its own programming.

Music services are not in an entirely different business. Their content is created by someone else, owned by someone else, transmitted on cables and connections owned by someone else. So if there are six or more services with more or less the same core functional suite, using the same distribution channels owned by ISPs and mobile carriers, who wins the battle for the consumers' love? And don’t underestimate the need for love here – these generally are not free services. Most require an investment of time, and more importantly money.

One could argue that Spotify and Ek have cottoned onto the same realisation Bob Pittman had, albeit 31 years later. Back then nobody did fall in love with a jukebox, but they did bond with the human element of MTV. This observation made MTV the first profitable cable network in the US and was the springboard to great wealth and an esteemed career. Will we say the same thing about Spotify in three decades' time?

Ben Shepherd is group commercial director at Dainty Consolidated Entertainment and blogs at Talking Digital.

Comments on this article

Comments Policy

Isabella Harbour, Fri, 2013-02-22 04:21

Interesting article. I love Spotify, but was not aware there were other services like it (Spotify breaks out to an MTV beat, December 14). I haven't bothered with the recommendations side as I'm working my way through "1001 albums you must listen to before you die", but if they can get that right they will be on a winner. For time poor music lovers like myself, there is a derth of opportunities to find music, especially as music radio stations insist on having comedians pandering to teenager listeners rather than playing music at peak listening times.

The Spectators

A subtle shift for Abbott's razor gang
Mitchell Neems 17 May, 7:33 PM | 9
After months of campaigning against 'wasteful' Labor management, Tony Abbott will be aware similar scrutiny will apply to his government, should the Coalition win.
WEEKEND ECONOMIST: Slip, slipping away
Bill Evans 17 May, 6:50 PM | 8
The federal budget revealed a worrying trend for the Australian economy, with disinflation a factor in the revenue slippage that led to the deficit.
Broken Glass won't hurt gung-ho Google
Ben Shepherd 17 May, 5:57 PM
So far Google Glass has been underwhelmingly modeled by unfashionable white men. But Google continues to outshine its tech-giant peers in the media with its boldness to innovate.

Index	Last	Chg	% Chg
DOW JONES	15354.40	+121.2	+0.8
S&P 500	1667.47	+17	+1
NASDAQ	3498.97	+33.7	+1
FTSE 100	6723.06	+35.3	+0.5
NIKKEI	15138.12	+100.9	+0.7
Hang Seng	23082.68	+38.4	+0.2

Latest stories

Latest stories

Latest stories

Latest stories

Latest stories

Latest videos

Featured stories

Spotify breaks out to an MTV beat

You must be logged in to read this article

Not a member yet? Register today ›

Already a member? Sign in here

More from Ben Shepherd

Related articles

More from Business Spectator

Comments on this article

Information

Policies

Advertising

BS Main menu

User login