last100 » Spotify

3’s CEO talks iPad, the mobile network’s ‘perception problem’, Spotify, and more

Steve O'Hear — Tue, 02 Feb 2010 15:38:02 +0000

3UK’s CEO talks about how the network is planning to address its ‘legacy perception problem’ and why bidding for the iPad would be like trying to sign a premiership footballer

I’ve just got back from a fascinating press briefing with mobile carrier 3UK’s CEO Kevin Russell and CTO Graham Baxter, billed as a discussion of the “themes, trends and challenges that will shape the mobile industry in the UK in 2010.” Although the subtext was something more along the lines of: how is 3 addressing what was described as its legacy perception problem.

People still, wrongly or rightly, often associate the network with poor coverage and/or service. This despite the fact that the network’s coverage and capacity has and is improving and that in my view 3 is one of the most, if not the most, innovative of the UK networks, especially on pricing, data services and positioning.

Here’s what I learnt during two presentations and the very frank Q&A that took place afterwards:

3 has an image problem that needs be addressed.

Despite investing heavily in its network and seeing the benefits in terms of coverage, speed and capacity, the number one issue facing the network is how to shake off what was described as its ‘legacy perception’ problem. If I remember correctly, it’s the one thing that keeps Russell up at night. Two ways 3 can address this.

1) Organically by letting the network speak for itself as 3 attracts and retains subscribers who can experience the improvements for themselves

2) Try to create a big ‘catalyst’ moment, perhaps through acquiring a ‘hero’ handset or device as O2 did with the iPhone. Russell suggested that it could be a combination of both but wouldn’t go into specific details with regards to 3’s marketing strategy.

In terms of reality, 3 has been on a steep learning curve with regards to huge increases in mobile data usage by its customers, says Russell. But that the network has steadily improved its data coverage and capacity, in part through its network share with T-Mobile, and that 3 is on track to have over 12,000 base stations up from just over 7,000 by the end of October 2010.

It was also pressed home by CTO Graham Baxter that in the end all of the carriers faced the same challenge. The only real way to increase capacity is to acquire more sites (base stations/cells) and more spectrum. 3 is making great strides with the former but the latter is in the hands of the government/regulator. That’s why 3 is particularly worried about the Orange/T-Mobile merger.

Apple iPad maybe?

While Russell didn’t appear to totally rule out 3 offering a subsidised iPad (or perhaps a SIM-only offering that targets owners of Apple’s device) he acquainted bidding for an exclusive to trying to sign a top premiership footballer. Not only does everyone want the same player, but as a result there is a hefty price to play. A price that Russell suggested wasn’t usually worth playing. And besides, 3 likes to ’swim in the opposite direction’ to the rest of the industry.

He also wasn’t familiar with the new microSIM ’standard’ that the iPad requires, which provided a slightly awkward moment.

Spotify’s ’soft launch’

3 began offering the music streaming service Spotify with a single handset – the HTC Hero – in November of last year. It was a relatively soft launch, conceded Russell, and that the network was waiting till it could offer Spotify on more than one device before giving the service a much greater push. He also said that 3’s retail bricks ‘n’ mortar stores were the best channel to promote offerings like Spotify.

As for more handsets that support the service, Russell talked of a half-dozen rather than one or two more. Not surprising since Spotify has clients for Symbian, Android and the iPhone.

YouTube not iPlayer is the bandwidth hog

It’s YouTube not the iPlayer which stands out as 3’s biggest bandwidth hog. Although Baxter explained that in some ways the problem takes care of itself. YouTube throttles its own bandwidth at peak times so it’s often out of 3’s control anyway. In comparison, iPlayer hardly registers. Why?

No reason was offered but I think it could be to do with the way 3’s handsets support iPlayer. All of the Symbian devices support downloads not just streaming. Perhaps users are grabbing content over WiFi before leaving the house. Also worth noting: there’s currently no official iPlayer client for Android.

As you’d expect, Facebook has been a big driver of data usage on handsets too, though obviously nowhere near as bandwidth intensive as streaming video.

3’s been surprised by the Terminate The Rate campaign’s support

Russell said he’d been surprised by how well the carrier’s Terminate The Rate campaign had resonated with the public and members of parliament. The campaign is attempting to influence the decision Ofcom makes on reducing the charge of Mobile Termination Rates (MTRs). From the campaign website:

MTRs are charged when you call somebody on a different mobile network, or call a mobile from your land-line. Their network will charge yours a fee for receiving (or ‘carrying’) the call. This is a Mobile Termination Rate. The current charge is around 4.7p or more for every minute you’re connected – charges we think are excessive and distort competition.

Of course, 3 is particularly exposed to MTRs since it has less subscribers than its competitors so, inevitably, will have to pay out a lot more than it gets in.

Data roaming charges are “stupid”

Somewhat related to MTRs is the charge levied on customers when they consume data in other parts of the EU or elsewhere abroad. Russell highlighted the difference in price domestically and internationally.

Typically, 5GB of mobile broadband will cost £15 here in the UK, while it’s something like £6,000 when roaming. Russell said this is “stupid” and that the issue needs to be addressed now not sometime in the future as has been argued by others in the industry.

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The Guardian newspaper’s iPhone app offers off-line mode – mobile Internet’s killer feature?

Steve O'Hear — Mon, 14 Dec 2009 21:57:24 +0000

The Guardian has released a paid-for iPhone (and iPod touch) app that makes reading the UK newspaper on Apple’s device a truly smartphone experience.

Along with features such as the ability to customize the newspaper’s ‘front page’, support for audio, finger-friendly navigation, including ’swiping’ through photo galleries, the feature that really stands out is off-line browsing.

As I write over at TechCrunch Europe, the functionality…

… works in a similar way to music streaming service Spotify’s own iPhone app. Sections of the newspaper can be ‘cached’ in advance to enable access when outside of a WiFi network or mobile signal. As with listening to music, this is particularly appropriate for reading a newspaper on-the-go, such as when commuting on London’s Underground or any other subway for that matter. The app also offers access to the various Guardian podcasts, which can be downloaded in advance or streamed.

Even though we are (slowly) moving towards a world where our data lives in the cloud and broadband access is ubiquitous, there are always going to be times when a reliable Internet connection simply isn’t possible. However, with mobile apps incorporating caching functionality, such as Spotify and now The Guardian’s offering, we’re seeing the lines being blurred between cloud-based and locally stored content. This hybrid approach, if the user experience is done right, has the potential to offer the best of both worlds.

Might an off-line mode be the mobile Internet’s killer feature?

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3 and Spotify point to the future of music purchasing

Steve O'Hear — Mon, 19 Oct 2009 17:45:58 +0000

UK carrier 3 has teamed up with Spotify to offer a mobile tariff that includes a premium subscription, no ads and mobile usage, for the popular European (US launch pending) music streaming service. While the offer in itself is news worthy – it’s quite an attractive deal (more below) – perhaps more interesting is that the model may well point to the future of paid-for music.

Prior to 3’s offering, those wanting to utilize Spotify’s service on their handset were required to take out a premium subscription costing £10 per month in the UK. That’s quite high when competing against “free”, such as ad-supported offerings (including Spotify’s own, which prohibits mobile access) or illegal file downloads and the like.

However, by burying the premium subscription within a user’s monthly mobile tariff the service begins to enter the needed “feels like free” territory that self-proclaimed media futurist Gerd Leonhard has been talking about for years.

For £35 a month over 24 months, alongside an upfront fee of £99 for the handset (the very nice Android-driven HTC Hero – see my review) here’s what 3 are offering:

Unlimited Spotify Premium for 24 months (worth £240 at the non-bundled price of £10 per-month)
750 minutes to other mobiles
Unlimited texts
Unlimited 3 to 3 calls
Unlimited email, internet browsing and Facebook
Free Skype to Skype calls

Aside from paying an upfront cost for the HTC Hero, I think that’s a pretty good deal. My only real reservation is that I don’t like the move towards 24 month contracts, not because I particularly like to switch carriers but, being the early adopter I am, I like to upgrade my handset as soon as possible. On the other hand, for many users, a 24 month contract maybe a little easier to swallow while the music keeps playing. 3 have also hinted that the Hero is only the first handset to be offered with a bundled subscription to Spotify, and with a Symbian/S60 mobile app for the service just around the corner, I expect a range of Nokia phones on 3 to soon to be included.

As for the whole ‘feels like free’ mobile music space, 3 and Spotify’s offering will inevitably be compared to Nokia’s Comes With Music, which hasn’t exactly set the world on fire. However, CWM doesn’t offer a free version to hook users in and utilizes DRM in a much less user-friendly way. While Spotify does employs DRM, because it’s cloud-based (either streamed or cached rather than traditional downloads), the service can much more easily be used across multiple devices, Windows PC/Mac and on supported handsets.

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Spotify hits the iPhone and Android app stores

Steve O'Hear — Mon, 07 Sep 2009 11:57:32 +0000

The stars were already aligned: a preemptive PR strike, a premium business model, and regulators questioning anti-competitive practices with relation to the iPhone’s app store — making it less and less surprising that Apple should give Spotify the green light.

As of today, the iPhone version of the music streaming service is available for download from Apple’s official App Store — UK, Sweden, Spain, France, Norway and Finland only (with the U.S. debut planned for sometime next year) — while a mobile client for the Google-led Android has also launched. The app is free for either platform but you’ll need to be a Spotify premium subscriber — £10 per month in the UK — to access the service.

The key feature that sets Spotify apart from other music streaming services is the ability to play any track or album on-demand rather than at random within a particular genre or ‘artists similar to’. While the mobile version also one-ups its competitors by offering an off-line mode that caches play lists for when your phone is out of coverage or wireless is switched off. This means users can access the service while on the subway or a plane, for example, or utilize the feature to conserve battery life.

As I predicted, however, the iPhone version of Spotify has one major floor. Music can not be played in the background if a user switches applications. Not the fault of Spotify but a limitation imposed by Apple with relation to multitasking on the iPhone. Unsurprisingly, the Android version doesn’t suffer the same fate.

The is the first phase of Spotify’s ambitious mobile plans, with a version for Symbiam S60 (Nokia etc.) next, and a rumored tie-in with Hutchison Whampoa-owned carrier 3 and INQ Mobile, makers of the so-called Facebook and Twitter phones. The Really Mobile Project recently reported that Hutchison Whampoa “head honcho” Li Ka-shing has invested in Spotify and that INQ CEO Frank Meehan now sits on Spotify’s board.

Video demos of Spotify on iPhone and Andriod after the jump…

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Spotify on iPhone approved by Apple

Steve O'Hear — Thu, 27 Aug 2009 20:59:59 +0000

With Apple stuck between the FCC, Eurpean Union regulators and a hard place, I’m not that surprised to see the approval of music streaming service Spotify’s iPhone app. Apple today confirmed to paidContent that Spotify (currently Europe-only) has been given the green light and will be available in the App Store “very soon”.

While many had speculated that the app might be rejected by Cupertino on the grounds of ‘duplicating’ (read: competing with) the iPhone’s built in functionality — iTunes — I was confident that, especially in the current climate, Spotify would be approved.

I predict that Apple will in the end give Spotify the green light based on several factors. Avoiding monopoly accusations being one. Spotify’s pricing model being another (the iPhone app will only be available to premium subscribers so it’s far from a free-for-all). And then there’s Apple’s kludgy multitasking solution. The latter of which means that Spotify on iPhone will be unable to run in the background. Switch to a different app and the music stops.

One thing we don’t yet know, however, is if Apple has in anyway restricted any of the features of the Spotify iPhone app, in particular the ability to cache playlists for off-line playback. This feature alone means that Spotify competes more heavily with iTunes than other streaming music apps that already exist for the iPhone.

Overall though it looks like great news for Spotify and bodes well for the future of Rhapsody’s iPhone app, which is currently pending Apple’s approval.

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Real’s Rhapsody enters App Store submission hell, could bode well for Spotify?

Steve O'Hear — Mon, 24 Aug 2009 11:58:27 +0000

Adopting a similar PR strategy to Spotify, U.S.-only music subscription service Rhapsody ($14.99-a-month) has published details of its iPhone app, mid submission process to Apple’s App Store. While submitting an app alone far from guarantees that it will ever see the light of day through Cupertino’s official channel, by showing off the app now, including a video demo (below), it does ensure that any dirty linen on Apple’s part is aired in public. It also helps to build consumer demand from existing Rhapsody subscribers who also own an iPhone in preparation for a backlash should the app be rejected.

And rejection is certainly a possibility.

While other music streaming services have been green lighted by Apple, like European-based Spotify, it’s the on-demand nature of the service that potentially competes too heavily with the iPhone maker’s own iTunes. Unlike traditional Internet radio-type offerings, subscribers can pick a specific song or album from a catalog of eight million tracks for near-instant playback.

In other words, it’s like having the largest iTunes library in the world or kinda.

That is, it would be, if Rhapsody’s iPhone app enabled you to cache playlists for offline playback when you’re outside 3G or WiFi coverage, a feature that Spotify offers, even if like Rhapsody, the app has also yet to be approved by Apple. Rhapsody says it plans to offer caching in a version 2.0 of its iPhone app, presumably taking a one step at a time with regards to App Store submission hell.

Should Rhapsody’s iPhone app be rejected, it could actually help Spotify’s case, especially in the context of the current FCC investigation into the whole App Store submission process. Spotify is a relatively new startup, albeit one backed by the major record labels, and is currently a Europe-only offering, while Real’s Rhapsody has been around for a lot longer and is an American company. Real also hasn’t been shy of upsetting Apple’s legal team in the past either.

Rhapsody on iPhone from Jamie on Vimeo.

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Music streaming service Spotify demos Android app, off-line syncing included!

Steve O'Hear — Thu, 28 May 2009 18:13:24 +0000

Spotify on the Google phone

Music streaming service Spotify already offers a very compelling desktop experience. The Mac and Windows client features the familiar iTunes-esque User Interface, a fast growing music catalogue and the ad-supported free-ness that is so popular with users who otherwise might source their music from P2P filesharing networks. That’s all well and good but ad revenue alone is unlikely to generate enough revenue for Spotify to stay in business. Instead, the company is hoping that over time enough users will opt for the monthly paid-for subscription version and it’s here that mobile could be key.

Currently the paid-for version offers little to differentiate itself from the free offering aside from doing away with the ads. Ads that aren’t intrusive enough to make most punters part with their money. A mobile version of Spotify running natively on a range of handsets on the other hand might actually be something users are willing to pay for. Especially if its possible to ‘cache’ playlists to enable access to the music streaming service even when there’s no WiFi or 3G connection available.

On that note an iPhone version was already known to be in development, with Nokia’s S60 thought to be next. Now it looks likely that Spotify will in fact make its mobile debut on Google’s Android OS after the company published a video previewing a native Spotify client running on Android, off-line playback included. Video embedded after the jump (via TechCrunch Europe).

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Napster tries again, unlimited streaming and five downloads for $5 per-month

Steve O'Hear — Mon, 18 May 2009 14:14:53 +0000

Napster tries again

Now under the stewardship of Best Buy, Napster is taking yet-another-stab at offering a compelling music service since its glorious P2P days of yesteryear. This time round the company is touting the combination of unlimited streaming of its 7 million strong music library in combination with 5 DRM-free downloads per month, all for a monthly subscription of just five dollars. “Music fans now have the best of both worlds”, boasts the press release.

While that’s a bit of an exaggeration to say the least, Napster’s new offering doesn’t seem like such a bad deal at all. Essentially, you’re committing to buying 5 tracks per-month at average industry prices, with the company throwing in its streaming service for “free”. There is as always a potential deal breaker depending on how you like to consume your music. Device support for the streaming part of the service is, for now at least, quite limited: PC streaming through a standard web browser and possibly, though I can’t be sure, home audio systems, such as those from Sonos and Logitech (Squeezebox). In other words, there’s no support for streaming through mobile phones and other portable devices. If there were a Napster app for iPhone, for example, that might be worth paying the five dollars for alone.

Mobile support in general is an essential component if we’re ever to be persuaded to move to a cloud-based model whereby our music collection resides on remote servers and is only accessible through the Internet. That’s something that competing services such as Pandora, Slacker, Last.fm and soon Spotify, already acknowledge.

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7digtal powers MP3 downloads on AOL’s Winamp, following similar Spotify and Songbird partnerships

Steve O'Hear — Tue, 07 Apr 2009 16:04:47 +0000

7digital has announced a partnership with AOL to integrate its music download store with AOL’s popular Windows-based music player Winamp, following similar deals with Spotify and Songbird.

Built using 7digital’s publicly available API, European users of Winamp can purchase tracks from 7digital’s six million strong MP3 catalogue through the application’s ‘Now Playing’ menu, as well as access additional artist, track and album information.

The partnership follows a similar arrangement with open source music player Songbird (a top ten digital lifestyle product of 08) and the new favorite kid on the block, music streaming service Spotify (last100 review), although in Songbird’s case, the 7digtal store is more prominent, featuring its own dedicated iTunes Store-esque menu item (see screen shot below).

All three services get a kick back from 7digital for integrating paid-for downloads, which are offered as 320kbps MP3 compaitble with almost any music player, including iPods.

The availability of 7digital’s store through each application varies somewhat. The Songbird partnership currently covers the US, UK, Ireland, Germany, France, Spain, Austria, Italy, Belgium, Netherlands, Portugal and Switzerland, with 7digital on Spotify available in UK, France, Spain and Germany, while the Winamp deal is Europe only, including the UK, France, Germany, Spain, Italy, Austria, Portugal and Ireland.

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Why you may never see Spotify on iPhone

Steve O'Hear — Mon, 23 Feb 2009 17:30:15 +0000

The video demo of the upcoming version of Spotify for iPhone (and iPod touch) that was yanked from YouTube has reappeared via Tech Digest. The mobile version of the streaming music service looks as polished as Mike Butcher over at TechCrunch UK first reported, although now that I’ve had a few hours to ponder its existence, I can see a number of reasons why Apple may never allow Spotfy into the iPhone App Store. Spotify isn’t the only music streaming app for iPhone (and therefore iTunes competitor) but it differs in two crucial ways:

Unlike Last.fm or Pandora, specific tracks and whole albums can be streamed on-demand, as apposed to having to be content with the choices or recommendations of the app itself – with no limits aside from the size of Spotify’s music catalog.
According to reports, Spotify on iPhone is able to cache tracks referenced in the playlists it creates so that the service can still be used outside wireless coverage. This solves one of the major drawbacks of streaming-only offerings and makes Spotify a much more direct iTunes competitor. Interestingly, Slacker offers similar functionality in its Blackberry mobile app but stripped off-line plackback from the company’s iPhone version.

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Spotify for iPhone in existence, S60 version on its way too

Steve O'Hear — Mon, 23 Feb 2009 14:21:02 +0000

I recently hailed Spotify as my streaming music service of choice but bemoaned the lack of a mobile version. That’s set to change, reports my friend Mike Butcher over at TechCrunch UK, with a working version for Apple’s iPhone and iPod touch already in existence – though not yet publicly available through the App Store – along with a Symbian S60 version in development.

Interestingly, Butcher says that it’s rumored that the iPhone client will only be available to users who use the paid-for version of the service, which is certainly one way for Spotify to sell more subscriptions. Right now the audio ads that persist on the free version of Spotify aren’t intrusive enough to make me want to switch to the paid version, but adding more value through a mobile client could make the difference. Especially if playlists can be ‘cached’, as Butcher suggests, so that you’ll still be able to use Spotify on the go even when you’re without a wireless connection. This will also help to save on battery life too, which can an issue with any mobile streaming service, not just Spotify.

After viewing a video demo of Spotify running on the iPhone (which has since been yanked from YouTube), Butcher says that, with the addition of a mobile client, the service “could even give the iTunes store a run for it’s money”, since it gives instant access to millions of tracks. “Assuming Apple lets it into the App Store of course”.

Official video ad of Spotify after the jump…

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Spotify, a very compelling music streaming service

Steve O'Hear — Wed, 11 Feb 2009 16:15:03 +0000

My music streaming weapon of choice used to be Pandora, the Music Genome Project-based service in which a group of experts have analyzed the component parts or ‘genes’ of thousands of tracks in order to recommend like-minded music. I not only found its recommendations (play tracks similar to artist or genre x) to be more accurate than rival Last.fm, but also loved its simple User Interface, designed perfectly for when I’m in a lazy listening mood. The problem is that Pandora stopped being accessible from the UK a while back. Enter Spotify, a new music streaming service, which this week publicly launched in the UK.

Spotify isn’t browser-based but instead offers a very nice desktop client (Mac and Windows) that has a distinctively iTunes look and feel to it. Since the service has licensing agreements with all four majors and a bunch of indies, one way to think of Spotify is as a massive jukebox in the sky (music can be streamed but not downloaded). You can search for individual tracks, albums or artists, and unlike similar ‘Internet radio’ offerings, there doesn’t seem to be any restrictions on how many tracks of the same artist can be played sequentially or how many times etc. This means that you can search for a specific album and play through the whole lot, just like your own iTunes music collection stored locally. Other features include artist-based ‘radio stations’ and the ability to create playlists. Quite brilliantly, each track is also a web link, making it easy to ’share’ them with friends over email or IM etc. Hence some people have dubbed Spotify as Naptster meets iTunes.

The only catch is that the free service serves up audio ads every few tracks, although paid-for ad-free subscriptions are also available. On the downside, there is no mobile client, which is a real shame as I really want this on my iPod touch.

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