Spotify is “Other Music” delivered at Scale
I love music and I’m a heavy user of Spotify. Like many others, I really enjoy their annual “Wrapped” feature where they produce a personalized summary of my year using their service. For the music lover in me, it is rewarding and fun to see what I’ve listened to from a 20,000 foot view. For the product person in me it is interesting to see how well it communicates how the product team is thinking, and how they are looking at the experience and interaction of listening to music.
I recently also watched the excellent documentary, Other Music, which tells the story about the rise and fall of the NYC record store.
A huge key to the success of Other Music was that they just employed people who loved music, loved finding new music, and were great at recommending that music to their customers. In turn, their customers loved them. A key subplot in the documentary is how they started across the street from Tower Records, a popular record shop, but outlived their success. Their ability to find good interesting music and match customers with what they liked was a big reason for that. And while they ultimately couldn’t no longer fight the two-fronted battle against NYC real estate and record store economics, they obviously left their mark.
Spotify is Other Music delivered at scale.
They understand that in a world of Tower Records, they need to deliver value on top of the commoditized, subscription “all you can eat” service. In the record store business, that value comes in the form of curation. Spotify understands that while they have a different business model and unit economics — they are still in the record store business. The fact that they lead their 2020 Wrapped with the number of artists and genres you discovered this year is only underscored by how many genres of music they see out there, similar to Other Music. Last year I listened to over 1000 genres of music with 424 new ones. Thats insane.
Other Music was great at curating audiophiles and tastemakers from throughout the community to work there to build a better discovery and matching service. While Spotify does this as well by hiring great people, they also offload much of this to their customers. One nice surprise in this year’s 2020 Wrapped was this moment where they called me out for being a “Pioneer”.
While this may have been written off as a cute moment to a story, it shows that Spotify is tracking the data about when everyone listens to a song and what the futures listens looks like. This means that they are looking for predictors and tastemakers in their own customer base. This was always something I wondered about, but it’s cool that it’s clear thats exactly what they are likely doing. I know enough to know that this is no small undertaking for a company of their size, so it shows how committed and focused they are on being a unique service on top of a commodity catalog of music.
At the height of Other Music’s success they became a platform for new artists to get discovered in NYC — and many believe they were the catalyst for the success of the NYC indie scene in the early 2000’s. From a business standpoint, they struggled with a common platform problem — they were unable to successfully capture and monetize the commerce that they enabled to happen off platform. It’s quite clear that Spotify sees themselves taking that step as well. Not only could they see what artists are going to be popular, they can optimize the popularity of artists they sign, or any artist. Why sign with a major label when Spotify gets you heard by more people, and could pay you more per listen. On top of that, should they be able to sign up and put on the best artists, they would be able to charge their competitors licensing fees to distribute their artists on their platforms — in essence turning their competitors main cost center into a profit center for Spotify. Like Other Music, they would also look to monetize off platform commerce — such as events and merch — which makes a ticketing acquisition or just new business launch inevitable as well.
I look forward to see what Spotify does in the future. It is by far one of my most used products and one of my favorite products. It is one of the few subscription service products that is truly a service, because they understand they need to be.
I’ll leave you with a playlist of some of my favorite songs I found or listened to this year.