by : Business, October 2011

Facebook Mines Music

Facebook Mines Music

Facebook announced it’s highly anticipated integration of a variety of media services at its F8 conference last month, putting to rest months of speculation as to what Facebook was building behind the scenes.  Though the offerings include watching movies and TV shows with friends, the incorporation of various music services such as Spotify, Rdio, MOG and Rhapsody is the main crux of Facebook CEO Mark Zuckerberg’s intention to “rethink a lot of industries at the same time.”

At the conference, Spotify’s CEO Daniel Ek took the stage to announce the partnership of Spotify and Facebook  relating the discovery of music to the inclusion of friends.  Music is a social experience, and with Facebook’s 800 million users, that experience is now ubiquitous.  Do not mistake this for a new music offering;  Facebook did not launch a music service.  Instead, the company decided to partner with a number of streaming music based services to create new features of Facebook that make music more discoverable and more easily shared.

Spotify, MOG, Rdio, and Rhapsody are all streaming music services, allowing their subscribers to stream any song at any time.  They don’t offer ownership, rather the ability to gain access to a personalized collection of music from virtually anywhere.  Spotify, however, has emerged at the forefront of these services by offering free music to its more than 10 million subscribers worldwide.  Pair that with the social offerings of Facebook, and it creates a new world of opportunity for free music appreciators everywhere.  More importantly, it opens the world of Facebook to the subscription based business model of Spotify, Rdio, MOG, and Rhapsody, and the potential for hundreds of millions new paying subscribers plus the aggregation of incredibly large amounts of consumer data.

 

Music and Social Networking

The idea behind this incorporation of services is not only to digitalize the social experience of music, but to take the advent of “free-music” and seamlessly turn it into “pay a little, get a lot” without bifurcating the two.  Facebook CEO, Mark Zuckerberg, explained it as helping “discover so many songs, that you end up buying even more content than you ever would have otherwise.” It’s a concept that has worked for Spotify, as over two million of its ten million subscribers are paying a monthly fee for premium services that offer more content and accessibility.  The key behind this model is offering the ability to discover as much music as possible by giving users an extensive catalogue available to them instantly, as well as having a massive user base.  Users will accumulate such an extensive collection of music that it would theoretically make it easier to pay a small monthly fee to keep and expand access to that music than attempt to buy and rediscover their already available compilation.

Discovery, exploration, and access are all concepts Facebook is more than familiar with.  This marriage of music and social networking seems long overdue, so how extensive is the integration?  There are a number of features being added, some intuitive, others noticeably absent.  The feature that sets the foundation of the assimilation of these services is the ability to instantly listen to whatever music a user’s friends may be listening to.  When a song is being played, a notification will appear indicating what song that friend is listening to.  By clicking on the notification, the song will launch and the social experience is born.  In addition to showing the song being played, the notification will display what service the song is being played on.  This is important, as the one feature that is noticeably absent is the cross-platform ability to listen to songs regardless of what service a user is subscribed to.  For instance, if a user listens to music through Spotify, then the only music that that the user will be able to listen to through Facebook will be that of any other friends using Spotify as well.  This is a disappointing omission, as it limits the simplicity of being able to hear and discover more music.  However, it is helpful for competition as it gives the companies the ability to monitor growth and understand how their service and music is being adopted.  This feature, or lack thereof, explains why services such as MOG and Rdio are fast tracking their introduction of a free music plan akin to Spotify’s.  If Facebook users now have the ability to instantly listen to music and sign up for a music service, they would prefer a free service instead of a paid one–and right now Spotify has the only free offering.  Expect the competition to heat up when Rdio and MOG jump on that bandwagon later this year.

Not only are music services such as Spotify, Rdio and MOG on board with this new music and social integration, but a number of progressive music executives are as well, including Lady Gaga’s manager Troy Carter.  “What we’re looking to do is not just about selling the CD or the digital file. It’s how many people can we get the music to. How many people can experience it?”  Harkening to the new music integration in Facebook, he seems to agree with the idea that in this day and age it is no longer about restricting access to music through sales, but about opening every avenue available to get music in to as many hands as possible.  “If it was up to me, I’d give away the next album and put it on every handset that I can put it on, to get that scale” he says, and with Lady Gaga being one of the biggest stars in the world, its hard to argue with him.  Not only will the new Facebook features allow even more people to access an artists music, but will offer new ways to stay connected with them as well.

Facebook recently launched a new feature known as “subscribe”, allowing anyone, regardless of being a friend or not, to “subscribe” to a users channel.  The user then has control over what content is shared with “subscribers” and what isn’t.  This, paired with the new music offerings, opens an entire new world of connectivity between fans and artists.  Now, instead of having to “Like” a page, or be friends with an artist, users can get direct updates from them and artists can now tailor those updates to them as “subscribers”.  This, along with new ticketing options being offered on fan pages and the new music integration makes Facebook an incredibly valuable resource for artists.

iTunes ushered in a new era for the business over seven years ago, and since then services have been refined, not innovated.  With Facebook bringing the social music experience to the Internet we may be entering a new stage.

By Jeremy Moccia

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