Spotify said to hit 20M users, but it’s no wunderkind

Spotify has now 20 million monthly active users, according to new estimates based on publicly available Facebook data. The company’s growth has accelerated ever since its Facebook integration launched – but it’s success isn’t extraordinary: Long forgotten music services like Imeem were once just as popular.

Today in Social

Spotify announced its platform API that will enable developers to build apps for its own desktop application. Not mobile, yet. And Spotify has no Facebook Connect-like syndication strategy, so this won’t do much to attract new users or lock Spotify in to developer partners. Music industry analyst Mark Mulligan says music itself should be the API, and that’s more like what Napster and Rhapsody tried, in a limited fashion, a few years ago. That is, developers could use those services to play music on their own sites. Sure, this is a smart move for Spotify to add functionality (lyrics, concert info, reviews) to its app with limited work on its part. But there’s limited reward for developers – 10 million users and no revenue sharing isn’t that attractive. And come on guys, Rolling Stone? That’s barely a music brand these days, and certainly one that’s pretty irrelevant to young fans. At least Pitchfork is making playlists, too.

Today in Social

I’m heading west for our inaugural RoadMap event, with digital music on my mind. I’ll be presenting a new market forecast, and looking at where the industry is likely to be disrupted. We’ve identified six disruption vectors where companies can gain share and revenues. Can social media save music? Come to the conference to see what we think, and keep an eye out for a report on the subject. Meanwhile, the New York Times profiles Sony Music’s new chief, who sounds pretty old-school. And an old colleague, Mark Mulligan, is always thoughtful on the industry.

Today in Social

Everyone’s favorite – but still not in the U.S. – music streaming service Spotify has capped its ad-supported product with number of listens and hours limits. Bobbie Johnson thinks it’s the end of ad-supported on-demand music, and PaidContent wonders if its relative success in converting free users to paid – 1 million subscribers in Europe – will suffer. Forrester’s Mark Mulligan thinks it’s a wise move to improve margins, and possibly set up Spotify’s long-awaited US entry by making a limited service seem less Spotify-lite. Spotify was never going to get the record label deals in the U.S. that it got in Europe, and so far licensing requirements limit ad-based digital music to a radio-like experience. (Full on-demand rights cost more.) Nor have the labels and publishers taken to discounting for scale. There’s a reason on-demand subscriptions haven’t gotten past a few million subscribers, even though Rhapsody and Napster are solid offerings. Unless the rights holders are willing to experiment with price elasticity, this is what digital music is stuck with.