But it is a bad comparison. Start with the consumer and work back.
Consumers expect their music streaming service to have any song they are looking for. For video they don’t have the same expectation.
Music has a greater element of “I want to listen to this particular song/album because it is my favorite”. Video is more about “I want to find something new to watch”.
That fundamentally changes the value of having a complete catalog in music and puts Spotify in a weaker spot relative to Netflix.
Netflix has been able to track exactly what types of movies consumers are into so that it can deliver more in the same vein. Originally, it would send consumers to other movies it licensed. Now, as a producer, it can direct consumers towards its own flow of productions.
Spotify's recommendation engine has long been a draw for many users. I believe Spotify is setting itself up to be able to increasingly direct users into its own Spotify-flow of artists and musicians. The recent change to playlist mechanics (so that playlists autoplay "recommended similar songs" once completed) will make this even easier.
Having a huge catalog is important, but controlling the flow of what's popular may trump the back catalog in the long run.
edit: Spotify is not as far along in the process as Netflix, obviously, and the entrenched nature of the music business doesn't help, especially with the market practice of locking artists into 7-year exclusive contracts. I believe it will go in the same direction - it's just going to take a little longer.
Netflix's "recommendations" have been pretty terrible from day 1 -- it's mostly random garbage, and suffers from serious issues like grouping sci-fi with horror (seriously? Star Trek TNG belongs in the same category as Hellraiser?) -- and since they started producing their own content their recommendations have quickly become thinly-veiled attempts to push their own mostly-poor content. Add in their horrible UI, replete with autoplaying previews as you browse tiles paired with obnoxious stock music, and Netflix has become something painful to use. I've been moving back to renting/pirating depending on availability and price this year because Netflix doesn't have anything worth watching that I haven't already seen.
Now I open Bandcamp first when I want music.
I think this has more to do with the economics of pirating movies versus music.
When Netflix started, people were not used to torrenting (or Napster-ing, or Kazaa-ing, etc) movies. They were already at the mercy of Blockbuster, so being at the mercy of Netflix instead wasn't that big a deal. Pirating movies is more popular today, but people are still generally OK with having a limited movie selection.
Whereas by the time iTunes Music rolled around, people were already comfortable with having the whole world of music at their fingertips. You can't undo something like that easily. So the only way forward has been to try to have everything.
Perhaps the most interesting part about all this is that there was never (to my knowledge) such a thing as a store where you could rent records, tapes, or CDs -- Blockbuster for music.
Not a store, but you can rent records, tapes and CDs at most libraries.
That is because it is illegal. 17 U.S.C. § 109(b).
It seems one could start a private non-profit library whose purpose is teaching about music history that rents CDs and promotes musical performances. I could call it "Musicbuster" perhaps. I'm assuming no one has done this because there isn't really a market for it? Or is that not a clear and easily exploited loophole in law?
Even if there is a market for it, the nature of the legal limitation to a non-profit library is that the usual capitalist incentives for serving such a market are removed.
Because Redbox rents games
I don't disagree but I also find these foundational to your argument and they appear to be perceived opinion.
Can you provide a source for this that adjusts for the increase in worldwide internet use as well as bandwidth?
When Netflix started, it was an overnight DVD delivery company, not directly competing with online movie piracy. Pirating movies in 1997 meant making large sacrifices over quality and convenience, not because people "weren't used to it".
By the time Netflix entered the online movie streaming market to compete with piracy, the DMCA had been in effect for years. The world was very used to filesharing before the DMCA went into effect. And Blockbuster was already suffering poorly not just because of Netflix but because of a general shift in how people consume their movies.
> Whereas by the time iTunes Music rolled around, people were already comfortable with having the whole world of music at their fingertips
Through YouTube? Because otherwise I don't know of a truly comprehensive legal streaming service. Unless you're referring to filesharing?
> Perhaps the most interesting part about all this is that there was never (to my knowledge) such a thing as a store where you could rent records, tapes, or CDs -- Blockbuster for music.
Music-ripping tools were ubiquitous at the time (everyone had a CD drive), movie ripping tools were not nearly as popular. It didn't economically make sense.
Why? The fact that it was physically hard to pirate movies in 1997 is part of why people didn't do it.
Through YouTube
iTunes Music predates YouTube being a viable music platform. I'm talking about filesharing.
Music-ripping tools were ubiquitous at the time
I'm talking about pre-CD-drive.
They are both media-consumption services but I think most people treat them like
Edit: Just remembered that Spotify may already be doing something like this[0] for certain areas where name recognition and back catalog don’t matter. A very clever approach, if they commissioned more tracks like these and filled their playlists with them, and concentrated on growing the areas of their user base that listen to those kinds of playlists, they could decrease their dependence on the record labels.
[0]: https://www.theverge.com/2017/7/12/15961416/spotify-fake-art...
But on researching this comment it would seem I may be way off base https://insights.spotify.com/no/2017/11/02/listening-diversi....
I really hope that is the case. I have more than a hundred artists in my saved list and a huge spread of genres and styles. I enjoy Spotify constantly for giving me some of these insights. I am just as likely to get a suggestion for an artist with 1000 followers versus someone with 500,000 thousand. The algorithm doesn't seem to give much weight to popularity and I love that. Popularity just isn't a strong indicator for quality music and people have been musing over that point for centuries.
I think for many, music is just background noise or social fodder. Used solely for those ends then popularity matters. Otherwise, it's a useless metric and you are just as likely to find a genius with 200 followers as you are a vapid repeater box with 500,000. The hurdles serve as enough of a barrier for people posting just garbage to the platform, but they don't seem to hinder those who are creative but unpopular.
That's me 90% of the time.
So names doesn't matter much AND I'd actually be happy if the artists got paid better, directly and without feeding the middle men in todays music industry.
Why would that need management folks? Wouldn't a simple signup form be enough?
No reason it has to be the same entity providing everything that the labels used to.
I love the music industry.
/s
It perhaps sounds borderline tautological, but I think the reasoning under Aggregation theory is simply: if they could attract suppliers directly, they would have, and therefore because they haven't, they can't. I think this is reasonable where Aggregation theory holds, since being an Aggregator is an incredibly strong position in the market.
To make a reductio ad absurdum example, as a musician, I believe you could currently just upload your recordings to Spotify, and skip the record label, in the same way that Youtube video producers upload their content directly. (Youtube is an example of a true Aggregator in Thompson's terminology.)
However it seems quite clear that the Spotify-only approach wouldn't be sensible, because Spotify doesn't get you onto radio, tv commercials, and all the other channels that a record label has available. And Spotify revenue alone is less than Spotify-plus-record label. (e.g. see Taylor Swift, who gets (by a very swift Google search) $160m in revenue [2], vs. $2m paid by Spotify [3] (and split between her and her record label). Obviously some of that revenue comes from non-music revenue, but the album sales numbers suggest that she's netting at least tens of millions per year.
[1]: https://stratechery.com/2015/aggregation-theory/ [2]: https://www.forbes.com/sites/zackomalleygreenburg/2016/07/11... [3]: http://www.businessinsider.com/how-much-taylor-swift-earned-...
Meanwhile I'd say that maybe 2/3rds of my playlists are tracks from the past decade or older. Having only access to a subset of the music being produced today is not really enough for me to justify paying 10 euros a month. When I hear some music that I like on the radio I fully expect to be able to find it on Spotify and most of the time I'm right. If suddenly I have to use 3 different streaming services to access all the music I like then it'll be back to pirating for me. How do you even compile a playlist in these conditions?
I really don't think that "pulling a Netflix" would make any sense for Spotify at all, and it would be a terrible thing for the users.
maybe it means 'exclusively'...
i.e. it's not the absolute size of user base that matters but relative
as long as there is no clear winner, artists would not want to sign up exclusively to one of the services