Sean Parker: Spotify Will Overtake iTunes Within Two Years

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AUSTIN - Sean Parker is thinking big when it comes to Spotify, the company he backed in 2010 to the tune of US$15 million. In a Q&A session at SXSW 2012, Mr. Parker said that Spotify is going to be more important to the music labels than iTunes is today, and that it will do so within the next two years.

Sean Parker

Sean Parker
Source: Creative Commons

“If Spotify continues growing at its current rate in terms of subscribers and users, we will overtake iTunes in terms of the amount of revenue we contribute to the music labels in under two years” Mr. Parker said.

Sean Parker’s first venture was Napster, the file sharing service that was shut down by court order due to way it was used to trade pirated materials. In 2002, he founded Paxo, an early social networking service based around address book access, though he was forced out by the company’s venture capitalists backers.

He then went on to become the founding president of Facebook, though he was again forced out by the company’s backers after a cocaine bust in 2005 (no charges were filed). He is credited by many, however, as negotiating a structure that left Mark Zuckerburg in control of the social networking firm, and for helping to set the company’s early direction.

In 2010, Mr. Parker invested $15 million in Spotify, an online streaming music service that was then operating only in Europe. He helped negotiate deals with U.S. major labels that allowed Spotify to expand to the U.S.

Which brings us to this year’s SXSW, the annual music, film, and interactive festival that takes place in Austin, TX. Sean Parker and his Napster cofounder, Shawn Fanning, participated in an interview labeled Downloaded, and afterwards did a Q&A session.

During this Q&A session, Mr. Parker chided iTunes for being slow, saying, “It’s this Web interface inside their client app, and you click buy, and then…”

At this point he made a swirling motion with his index finger to signify the spinning gear we all wait for while it authenticates the purchase and begins downloading the file.

There was a common theme throughout the session—something Mr. Parker has said many times—about how he sees Spotify solving many of the problems that he and Mr. Fanning were trying to solve with Napster: no cost per song, a free option available, instant discovery of music, etc.

iTunes has grown to be the biggest music retailer in the world, eclipsing even retail giant Wal-mart. Apple currently only sells music, while Spotify is a subscription-based service that has more in common with Pandora’s streaming service than any of the more traditional music retailers.

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11 Comments Leave Your Own

fultonkbd

Subscription based… no thanks. That’s why I don’t use it.

Tiger

He might want to reconsider that. Apple’s juggernaut is steamrolling. Stock is approaching $600 per share. I sold at $16 years ago. I’d be a wealthy person if I’d hung on (just couldn’t at the time).

iTunes is constantly being refined. Just like Apple has done with the OS, it’s likely iTunes will be totally reworked. Spotify is the Johnny Come Lately to the crown I’m afraid. How many people are really going to attempt moving their music collections from one to another? I’m an amateur and I’ve got some 3000 songs purchased and imported from my CDs. I have friends who are audiophiles that have more than 10-20 thousand songs on their hard drives. Ain’t gonna happen.

John Molloy

I know several friends who had material put up on Spotify without their permission. Not artists signed to big labels but people who had complete control of their material and did not give Spotify permission to publish it.

Spotify is just Napster with a business plan.

dhp

A few years ago I couldn’t imagine buying downloads instead of CDs, much less paying for a subscription service. The “people want to own their music” line really resonated with me. But now I cannot think of one song I’ve purchased on iTunes since subscribing to Mog in the fall. (I chose Mog over Spotify because there is a Roku channel for it. Now that I have a MacBook Air connected to my sound system, I may switch because I like the Spotify interface more.) And now I’m actually listening to a lot more music. I only pay for the basic $5/mo service, not the premium mobile service. I’ve never listened to music much on my iPods (mostly podcasts), so the portability is not missed. Spotify and MOG are especially useful for my young daughter who is just discovering a lot of music and has a quickly evolving taste. Almost the entire history of recorded music is at her fingertips—or mine until she learns to read.

Jamie

Not bloody likely. I am one of said audiophiles, Tiger, I do have over 20,000 songs in my library, and that is not close to the entirety of my collection! wink Spotify will just never do for myself or others that actually buy music in quantity (I did try it, I deleted my account within days). A lot of the stuff in my collection, even this late in the game, isn’t available on iTunes or Amazon for download, let alone the streaming services, and likely never will be, and I want to stream my own (I serve it up myself) rather than pick a la carte from whatever’s available ‘off the shelf’; this is what I’ve always appreciated about Apple’s way of doing things in this area.

I do think commercial radio’s death knell has been sounded once and for all, however - to the casual listener, Spotify and its ilk pretty much nail it, methinks - but they can pry my home server from my cold, dead hands. wink

furbies

but they can pry my home server from my cold, dead hands.

Hear Hear!

I can’t stand the idea of not having complete control over what’s in my iPods

And what happens when one day the “Music Industry” decides to change the rules about when/where/how the likes of Spotify can serve up music ?

Or decides that once everyone is hooked, then increases the licensing fees ? After all the “Music Industry” still thinks it’s the 1960s or earlier and that money just falls from the sky or grows on trees!

And then there’s fact that in Australia we’re charged way over the top for data regardless of the method of delivery.

And in locations outside major metropolitan areas, 3G data speeds are appalling at times! And that assumes you’re in the coverage area And that there’s not several dozen or more other users trying to (a) connect & (b) download from the same “cell” tower!

I’ll stick to CDs & iTunes for music I can’t source locally. At least at the moment once I download a song/album from iTunes it’s mine.
(And no I don’t rip copies for family etc)

1stplacemacuser

Talk all you want, Sean, but there’s not a chance in hell that Spotify will outmaneuver iTunes.

Apple is never static.  They will constantly innovate and update and modify whatever it takes to stay number 1.

Intruder

Even if what he says is true, so what? Apple has stated many times that iTunes exists to sell the hardware. The fact that they make some amount of profit from it is secondary.

geoduck

Maybe not Spotify but I wish SOMEONE would put some pressure on iTunes. iTunes has grown into a massive one-tool-to-rule-them-all piece of bloatware. Maybe this sort of thing will get Apple to split into three or four pieces. Separate packages for iTunes-Music, iTunes-Video, iTunes-Software and iTunes-Store. There’s no reason when I load iTunes to listen to a radio feed that I end up waiting while the iTunes loads the Store, the Genius Libraries, and downloads the software I bought for my iPad.

wab95

Look at this guy,
Can you not trust that face?
Forsooth, methinks ol’ Spotify
Will o’ertake iTunes at first place!

Aye, Sean, what a laddy!
A maker of kings and cheats,
A time or two he’s thrown a paddy,
And wound up back on the streets.

But the steel in the man, y’see
Y’know, he just keeps comin’ back!
For talk is cheap, and lies are free,
An’ for suckers the world will never lack!

Aye, Sing a song of Sean the brave!
Sailing seas with hair and beard red,
For should iTunes smite poor Spotify,
He’ll be known only as Sean of the Dead!


Okay, no minstrel’s ballad, but the man is resilient.

For those in such a market, I hear that Spotify is rather well liked. Clearly, though, not everyone’s cup of tea.

Lee Dronick

Good one Wab95, very Shakespearian.
Sean should beware the Ides of March.

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