Spotify's right on the money
You probably haven't heard of Daniel Ek yet, but it won't be long before he'll be called "the next Steve Jobs" or "the next Mark Zuckerberg".
As the music industry struggles to find a way forward, Spotify, Ek's little Swedish start-up, is riding the waves of its European success with an America debut.
Spotify is a music streaming service but it has a remarkably simple interface and connects well with social media, especially Facebook, so you can tell your friends what you're listening to. Such referrals are gold in any industry, but especially so in the under-pressure music business, whose revenues are falling as fast as Lady Gaga's popularity is rising.
The thing is, there have been other streaming services, but none have captured the popular imagination - in Europe, that is, where it operates in seven countries - as Spotify has.
"Music's last best hope," BusinessWeek magazine trumpeted about Spotify's US arrival last week. The news magazine points out: "Worldwide revenue for the recording industry peaked in 1999 at $27-billion, according to the International Federation of the Phonographic Industry. By 2008, it had plummeted to $14-billion."
At the heart of Spotify's success is the same key impetus that makes all good products and services great: simplicity and ease of use.
Piracy - stealing music or movies - is just too simple. I've never used pirate software myself, but I have been shown how simple and quick it is to find songs, TV shows, movies, digital books, even comics, via various services.
Then iTunes came along and made buying music even easier - except in countries like South Africa where the licensing terms apparently haven't been resolved and the internet market is supposedly too small.
Apple's online store (which sells movies, TV shows, apps and other digital content along with the original music) has overtaken Wall-Mart and Best Buy to become the biggest seller in the United States. It's hands down the leader in selling digital content globally, and also offers a cheaper renting option for movies and TV shows.
But, for every one track purchased, five are pirated, according to industry estimates.
Having used Spotify for the past year, I can attest to its simplicity - and genius. You can listen to millions of songs free of charge for 10 hours a month. If you want to upgrade to an advertising-free service it costs just à5 (R48.43) a month or à10 for the premium service which lets you use it on a mobile phone and store "local files" for playing offline. The US offers the same options, except in dollars.
Despite its simplicity, Spotify is so inherently clever you're probably wondering why no one did it before. The thing is they did, most notably Rhapsody.
But it seems the right circumstances and ingredients have finally come to bear. Beleaguered big music labels have finally realised they are fighting a losing battle with an outdated business model (and world view) while social networking is now the de facto communication centre of the internet.
Faced with plummeting revenues, they have had to deal with Spotify and iTunes. Crucially, the big labels own small percentages of Spotify.
Only 28, Ek was involved with numerous internet successes before he started Spotify three years ago. He was chief executive of uTorrent, a torrent downloading app, and helped turn Stardoll.com into a 100million-user site that lets girls dress up dolls. His experience in peer-to-peer file sharing is part of the reason Spotify is so quick and easy. Piracy does have some positive results, it seems.