Comment by waitwhat | Hacker News Reader

Comment by waitwhat | Hacker News Reader

This is a sign of desperation from Spotify. Their product is far from unique, and only really interesting because it has better PR, more apps, a better library, and a slightly more legit licensing setup than the competition.

None of those are big enough barriers to entry to keep even the small players away, meanwhile the big dogs are starting to show a lot of interest in streaming music (admittedly for music you "own" at the moment, but it would surprise noone if this were to change overnight).

Apple has the marketing weight and a history of solving music licensing issues, Google has a track record of throwing money at problems to solve them, and Amazon is just about to make a major hardware play.

Spotify's only real hope was to latch onto the latest big thing (conveniently an infrastructure provider, so unlikely to launch a direct competitor) and hope to ride to success on someone else's coat-tails.

I have no idea what the contracts between the two companies look like, but I would have to imagine that they are heavily in Facebook's favour. After all, it would be a lot easier for Facebook to replace Spotify with another provider than it would be for Spotify to replace Facebook.

Desperation? How do you figure? They have a sweet partnership with Facebook. That doesn't sound desperate to me.

Their product is far from unique, and only really interesting because it has better PR, more apps, a better library, and a slightly more legit licensing setup than the competition.

Slightly more legit? I think the phrase you are looking for is "completely legit, as opposed to some of the others who are lawsuit-bait-on-a-stick."

After all, it would be a lot easier for Facebook to replace Spotify with another provider than it would be for Spotify to replace Facebook.

Only if that other provider had the same kind of licenses with the record labels. At this point, Spotify is far ahead of the pack at that game.

Desperation? How do you figure? They have a sweet partnership with Facebook. That doesn't sound desperate to me.

We don't know it's a sweet deal. My gut feeling is that it isn't, but that's by-the-by. We don't know anything.

Slightly more legit? I think the phrase you are looking for is "completely legit, as opposed to some of the others who are lawsuit-bait-on-a-stick.

From the point of view of the users it really is only slightly more legit. From the point of view of the content providers, slightly less legit is not the same as illegal, and from the point of view of the service providers, legal and and a one-off court case is better than legal and ongoing licensing fees.

You also appear to be assuming that Spotify are the only licensed game in town, and will continue to be. This is, of course, trivially untrue (Rhapsody).

Only if that other provider had the same kind of licenses with the record labels. At this point, Spotify is far ahead of the pack at that game.

You appear to be assuming that getting those licenses is difficult. It really isn't. If Spotify managed it, any competent competitor can also do it -- after all, the labels have no particular loyalty to a small Swedish online radio network.

You appear to be assuming that getting those licenses is difficult. It really isn't. If Spotify managed it, any competent competitor can also do it -- after all, the labels have no particular loyalty to a small Swedish online radio network.

Spotify is far from a small Swedish online radio network; here in Europe they are far and away the market leader. They have over a million accounts in Norway alone, which is phenomenal penetration in a country of 5 million.

Second, getting those licenses was incredibly difficult for them; the negotiations to enter the US market took several years. There is absolutely no indication that the record labels are prepared to give similar terms, or even any terms at all, to other competitors. Again, here in Europe, I know of several firms attempting to compete with Spotify, and they are getting hung up on precisely this point.

Spotify really is tiny. They make "a profit of €5m or less" -- http://www.guardian.co.uk/technology/2011/aug/28/spotify-on-...

You are right, they are not big, but turnover (Eur 59mn) is the P&L metric that counts as a matter of size, not profit.

Or you can have fun with GM having become massively negatively sized when it reported a $4.3bn loss in 2009...

Sure. And if you compare Spotify's turnover with that of the big dogs I mentioned earlier (Apple, Google, Amazon) with whom they are bound to eventually compete directly, they are still tiny.

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