But there's another big story behind this Flash fiasco that has successfully remained off the radar of most. It's the answer to this question: How do the media companies -- you know, those people who use Flash to put their premium content online everywhere from Wired.com to hulu.com -- feel about having their primary delivery tool cut off at the knees?
Answer: Media companies hope to complain all the way to the bank.
First, a bit of disclosure. I'm the one who went on record explaining that the lack of Flash is one of the reasons I am not buying an iPad. So I'm clearly not a fan of the anti-Flash rhetoric for selfish reasons: I want my Flash content wherever I am. But I've spent the last few weeks discussing the Apple-Adobe problem with major magazine publishers, newspaper publishers, and TV networks. Their responses are at first obvious, and then surprisingly shrewd.
Simplicity has been central to Spotify’s success to date. In fact the Spotify experience was so simple it looked positively archaic compared to more feature-rich and socially-rich services such as Last.FM and imeem. But that simplicity was Apple-like in its elegance and a key reason it has proven so popular. The barriers to entry were lowered so that it had mass-market appeal rather than being condemned to ending up as another niche hide-out for the tech savvy music aficionados.
Spotify was always going to flick the switch on a greater level of sophistication, but only when it needed to. Doing so now is a very cleverly timed move. Today’s announcement both raises the stakes for new entrants such as mFlow and beats Apple to the music cloud. To understand why, we need to take a quick look at what strategy the new functionality implies. The two most important groups of functionality are social and cloud.
Spotify becomes a social experience. Spotify has always had a keen sense of how to coexist in the broader ecosystem rather than try to do everything itself (cf integrating audio scrobbling). It has now taken that a step further with Facebook integration and relatively sophisticated sharing and interaction. Doing it in the context of Facebook simplifies the education process for users.
Regular readers will be familiar with the mantra that I and my colleagues repeat: we are leaving the distribution era of the 20th century where music revenues were based upon selling units and entering the consumption paradigm, where monetizing consumption will be key to future success.
I recently came across a case study that illustrates well just how far along we are in the transition from a consumer perspective, if not yet from a business model viewpoint.
Armin van Buuren is a leading dance music DJ and producer, but unless you are Dutch, or a dance music aficionado it is unlikely you’ll be too familiar with him. Hailing from the Netherlands van Buuren has been producing music and DJing since the mid-nineties. Throughout the noughties he went from strength to strength, in no small part due to a very savvy use of digital technology including a weekly radio show (A State of Trance) that is syndicated across multiple analog and digital stations and platforms and reaches a weekly global audience of 40 million.
This context is important because van Buuren understands the importance of building an engaged digital audience. Which brings us onto the case study: his track ‘In and Out of Love’ featuring vocalist Sharon den Adel. The official video currently has 50.5 million views on YouTube. There are an addition 3.3 million unofficial video views of the track, of which 0.5 million are remixes and live versions. So that's a net total of just under 54 million views.
Consider those numbers for a moment. The biggest ever selling global single was Elton John’s Candle in the Wind in 1997 with 37 million copies. The biggest that the noughties had to offer was Leona Lewis’ ‘Bleeding Love’ with 12 million. Even Lady Gaga only made 11 million with 'Poker Face'. Getting to number in the UK charts can be done with less than 25,000 if you catch the charts on a bad week (Orson did it with just 17,694 in 2003 with ‘No Tomorrow’).
These include a suggestion that ISPs should consider using: “consumer tools for managing copyright infringement from the home (based on tools used to protect consumers from viruses and malware).”
The RIAA, MPAA, BPI, IFPI, NVPA - and all other acronyms of recording industry bodies that are lobbying governments – are right to focus on bringing their respective local legislative and judicial frameworks up to date. However it is crucial that a balance is struck The emphasis should be on establishing this bedrock upon which new service and product innovation can flourish, rather than simply trying to stem the digital tide King Canute-like.
Spain’s piracy problem appears to be testing content owner’s patience. Sony Pictures’ chairman Michael Lynton was reported yesterday as saying "People are downloading movies in such large quantities that Spain is on the brink of no longer being a viable home entertainment market for us."
Spain has long been the content piracy hub of Europe, both online and offline. Online music file sharing stands at over 30%, that’s more than double the European average. Movie and TV file sharing in Spain are both more than three times the European average. It is no coincidence that during the Spanish recorded music industry lost half its value last decade.
But that doesn’t justify Mr Lynton’s position. Like it loathe it (and if you’re a content owner it’s probably the latter) Spain is the shape of things to come. By that I don’t mean everyone is going to become a BitTorrent user, but consumers’ relationships with content is changing irrevocably. They increasingly just expect content to be there, and – also in growing numbers – don’t expect to pay a per unit fee for it. This is the Media Meltdown.
Instead of creating some sort of creative trade blockade around Spain – which of course will just force more Spaniards on to P2P networks to find Sony content – Sony and other content partners should invest their time and efforts instead on making Spain a test bed for content monetization models in the digital age.