Spotify shows Nokia how to do innovative music smartphones

Spotify, the music consumption service, has made another move into the mobile space. Following on from their iPhone app (and tantalising hint they are working on a Symbian version) their next move outflanks Nokia and their plans for music yet again. The launch of a monthly tariff and handset (HTC Hero), which has Spotify bundled, is going to be attractive to music lovers – not because it's better than Nokia's Comes With Music, but because it is more loved online, so the passionate users will do the evangelising.

Spotify is the current poster child of Web 2.0 in the UK and Europe and, like many before it, the team will struggle to do anything that draws criticism online. For those of you who haven't come across it yet, it is a streaming music service that lets you play any track in their extensive database. In return you might get the occasional advert you have to listen to between tracks. This basic service is free, but Spotify are hoping you upgrade to the premium members account which costs £10 a month. Pay that and you get to download tracks for offline listening, and the ability to use the mobile application versions of the service.

I think it's a given that Spotify will get their £10 a month from a monthly network contract far easier than the conversions from the free service (and it's worth pointing out at this point that the 3 network, where this offer is appearing, is an investor in Spotify). That's important because even with a nice bulk discount on the tracks played, Spotify appears to be paying the record industry on a per track basis – even those tracks streamed through the free accounts.

Nokia have been vocal in chasing music as a driver for their smartphones – the Nokia Music Store has been advertised and promoted for close to two years now, and the unlimited offer of “Comes with Music” has been around for more than a year.

With such a huge first mover advantage, a significant war chest and existing devices in thee market, Nokia should have captured the pole position, and driven off with the market like Jensen Button. Instead they have all the hallmarks of his team-mate Rubens Barrichello – the best car on the grid, failing to capitalise on it, and looking around for reasons not to be at the very front.

Actually, they did launch a revolutionary service – Rafe and I were in the audience when CwM was announced. Hidden away in the middle of a keynote, surrounded by other announcements and business indicators. It was almost like Nokia were ashamed to be doing something different. And as the buzz on the service started to build up, Nokia ducked a lot of questions in the early days, preventing people trying to work out the mechanics and the financials of the service, and generally acted like they had something to hide.

Is it any wonder that we just assumed that they were hiding something? That sort of thinking is going to colour a lot of opinion from writers, and then you have a delightful feedback loop.

And speaking of feedback loops, Spotify has a really good one. They have the buzz of something that feels right and should work – something that Comes with Music has never managed to cultivate. Whereas the default thought on Comes with Music seems to be to assume there's something not quite right, Spotify has that turned around 100%. They get the benefit of the doubt, time to expand and grow. This most recent move, to extend their mobile strategy by partnering with an operator (still the holy grail for services and apps), gives them more guaranteed revenue, more great press, and more legitimacy in the shark-pool of music... all by appearing on a single handset on the UK's smallest network.

Spotify, it seems, are playing all the notes, but, unlike Nokia, they're playing them in the right order. Or maybe it's the way the audience is responding?

-- Ewan Spence, Oct 2009.

Published by Ewan Spence at 11:08 UTC, October 20th

Categories: Industry, Editorial Thoughts
Platforms: General

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