The Ramifications of Free - Spotify - iCloud - YouTube - Rhapsody

Spotify hit the streets of America this week and suddenly the world got even smaller. I can now listen to over 15 million tracks for free on my computer, my iPad or my smart phone. I have to listen to some commercials, but that's called commercial radio.  Unlike commercial radio, I don't have to listen to the obnoxious banter of a bad DJ or songs I don't like (the good). Unlike commercial radio, I don't have the opportunity to have a great DJ introduce me to largely unknown yet brilliant artists (the bad)....and unlike commercial radio, I have the choice to pay a subscription to eliminate advertising (for a marketer..that may be the ugly).

Will it work? That is probably a few years from being known. Without subscription revenue, I'd find it difficult to believe that advertising revenue on it's own could sustain it. Unfortunately, once the price point is free, it's difficult to go up from there. Lady Gaga's limited $0.99 album download gave us a good indication of what happens when you offer something for virtually free, then try to raise the price. What happens with Netflix after their recent significant price hike is something to keep a close eye on.

Since this post is about ramifications, what happens to radio? If we can get any music we want, when we want it for free via our wireless devices, can traditional radio survive and if so, what do they have to offer to compete? What about paid satellite radio? I guess talk radio could be a substitute, but how much blather can a population endure? That's going to be an interesting scenario to watch.

Earlier this week ASCAP announced a U.S. licensing deal with Spotify. That is a good thing for the thousands of artists who are having their music streamed to millions of listeners, though the rate is so small as to be relatively useless to all but the most highly listened to songs.

But how big a deal is Spotify and will it be a significant impact on the way music is distributed? Even before Spotify, I've been able to go online and listen to millions of songs for free. YouTube videos of rarely seen concert, film and television performances by many thousands of artists, both known and unknown have been a wonderful and welcome form of entertainment. Would I pay for it? I'm not sure that I would..at least on the level that I tend to use it. Are the artists getting compensated? That is very debatable, but generally I'd lean to the no/low compensation side of this argument. Yes, the artist is getting some free promotion, but often not under any sort of control or measurable form and in a field of 15 million and growing, creative marketing is more important than ever. With Apple's iCloud coming, YouTube, Rhapsody, Turntable.fm and many other music sharing services, the music lover's world is our oyster. For the folks who make their living in the music industry, life is going to be in flux for a while longer.