Spotify looks to turn up the volume of its Irish market

Music-streaming service Spotify came to Irish shores about a year ago and has since managed to carve out a decent market for itself. Now it has just become a bit more visible as it kicks off its first Irish-specific marketing programme.

"It's such a great market, with brilliant heritage in music, and it's one we want to continue to push on and grow," says Adam Williams, who is managing director of Spotify Ireland, UK and Benelux.

Quite how decent the Irish customer base is remains a bit of a mystery though, as Spotify doesn’t break out its customer figures for specific territories.

“All our markets are at different stages of development,” Williams says. “What I can say is it’s been massively successful. We wouldn’t be launching a marketing campaign – which includes outdoor, radio, digital, mobile, social – if we weren’t a success here.”

There are no plans to open an office in Ireland yet, although Williams says he would never rule it out.

In all, Spotify has 24 million subscribers using a combination of its free and premium services.

Free services in Ireland are limited; for the first six months, users get full access to Spotify’s music catalogue to stream on their PC, but after that trial period ends, you are limited to 10 hours a month.

This is to encourage heavy users to sign up for the premium services, which offer unlimited streaming without ads and the ability to sync songs to mobile devices to play offline, for €5 and €10 respectively.

It wasn’t always so; a few years ago Spotify offered an ad- supported free product that allowed you to stream music to your desktop without time limits. That changed in 2011. The move affected listener numbers a little, Williams admits, but the free service remains an important part of the Spotify line-up.

“The free service is for us very much an important area because it gets people in who then invest time and effort in the product,” he says. “They’ll be able to upgrade or use it as they choose.”

Williams says about 25 per cent of Spotify’s subscriber base has moved to the premium plans, leaving 75 per cent on the free.

“We’ve got 24 million users, of which six million are paying subscribers. I think that’s an incredible conversion rate really when you think about the business model,” he says.

“When you move into so many different markets – certainly when you grow into Asia or those different types of areas – will the conversion be the same? We really don’t know, but it’s really interesting, I think, to see how we continue.”

Spotify doesn’t have the Irish market all to itself; rival Deezer launched here in December 2011, almost a year before Spotify. In the US , the digital music market is even more crowded, although streaming playlist services aren’t quite as saturated.

Williams though thinks Spotify has just enough to make it stand out from the crowd, namely its content curation.

“We’ve launched a feature called Browse, which is human curation that effectively gives you playlists for moments or events,” Williams says.

“Imagine you’re rushing home, you’ve got friends coming for dinner, you need a playlist for a dinner party that evening; we’ve got a whole lot of people who have curated around is it a fun night? Is it a relaxed evening?

“Someone else has spent the time doing that and I don’t think anyone else is really doing that at the moment.

“We combine that with the social element – being able to follow artists and see what they’re listening to as well as follow your friends, so again get those recommendations.”

Spotify also has an open platform, he says, that allows people to build apps on top of it, to offer added services to Spotify users such as offering information on artists playing nearby if users have been listening to tracks.

Last year, it paid $1 billion to labels and artists; Williams says the more the company grows, the more it will be able to increase that number by.

“For a five-year-old business, paying 70 per cent of our revenues back to rights holders is a huge amount of money,” he says.

However not everyone is seeing Spotify and its ilk as the saviour of the music industry. In fact, several high-profile musicians – Radiohead front man Thom Yorke included – have denounced the model as having the potential to destroy the music industry, particularly for up and coming young acts.

“Everyone is entitled to their own opinion,” Williams says. “New technologies disrupt things and not everyone is going to agree with them or like them, but what we are seeing is that more and more people are coming on.”

Williams points out that Spotify users are more likely to experiment with different artists than if they had to buy the tracks from a download service before getting a trial run. That, in turn, can help new bands to reach a global audience.

“You can’t compare a download to a stream because it’s about multiple numbers of streams,” he says.

“We know a number of great successes, but what we also know is Spotify allows a lot of people who probably couldn’t get exposure before to get out in front of a much bigger audience than they could previously.

“What we know is that we’re a great source of data and information and a place for people to be able to market their own music. And we know a lot of people who are doing that very successfully.”

For the moment, the company is concentrating on increasing its user base.

“We want it to be much bigger and when we’re much bigger, we can pay even more back to the labels,” Williams says. “It’s been an incredible journey through different products, new markets; it’s fantastic – and there’s also a whole lot more to come, which is exciting.”