For cloud-based digital music services like Spotify and Rhapsody, which stream millions of songs but have struggled to sign up large numbers of paying users, being befriended by Facebook could prove to be a mixed blessing.
This week, according to numerous media and technology executives, Facebook will unveil a media platform that would allow people to easily share their favourite music, television shows and movies, effectively making the basic profile page a primary entertainment hub.
Facebook, which has more than 750 million users, has not revealed its plans, but the company is widely expected to announce the service at its F8 developers’ conference in San Francisco on Thursday.
By putting them in front of millions of users, Facebook’s new platform could introduce the music services to vast new audiences. “If it works the way it is supposed to, it would be the nirvana of interoperability,” said Ted Cohen, a consultant and former digital executive for a major label.
But the new plan will ratchet up the competitive pressure on these fledgling services, forcing them to offer more free music as enticements to new users.
According to the media and technology executives, who spoke on condition of anonymity because the deals were private, Facebook has made agreements with a number of media companies to develop a way for a user’s profile page to display whatever entertainment he is consuming on those outside services. Links that appear on a widget or tab, or as part of a user’s news feed, would point a curious friend directly to the content.
Spotify and Rhapsody, along with their smaller competitors Rdio, MOG and the French company Deezer, are said to be among the 10 or so music services that would be part of the service at its introduction; Vevo, the music video site, is another. A Facebook spokesman declined to comment, and media executives cautioned details of the plan could change.
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Spotify is the largest of these services, with more than 10 million users, according to its most recent reporting. The service began in Europe in 2008 and arrived in the United States in July, after protracted negotiations with the major record labels over its “freemium” structure, which lets people listen to music free, with advertising, or pay $5 or $10 a month for an ad-free version.
Rdio and MOG, which charge $5 and $10 a month for subscriptions, announced free versions last week in an effort to compete with Spotify. And, Rhapsody, whose service costs $10 and $15 a month, has just introduced an array of social features centered on Facebook.
David Hyman, MOG’s founder and chief executive, said the development of his company’s free tier far predated Spotify’s entry into the United States.
But Hyman said the change was being made to reduce the “friction” a nonsubscriber experiences when following a link posted by a paying user. Instead of hearing the song, the nonsubscriber would reach a page asking to sign up with a credit card — an annoyance for many potential customers.
“In the internet world, any minuscule piece of friction blows people’s minds,” he said. MOG provides new users with a ‘gas tank’ of free music — supported by advertising — that increases with that user’s social activity on the site, like sharing playlists or inviting friends. Rdio’s free music will come ad-free.
“We don’t want to force you to look at or listen to ads that will distract you from enjoying music,” said Carter Adamson, Rdio’s chief operating officer, “and we don’t want you to spam your friends to get more free.” But even free music requires royalty payments to record companies and some investors and technology executives are concerned that Facebook’s platform may bring in large numbers of users who are willing to listen to some free music but are not being given much incentive to subscribe.
©2011 The New York
Times News Service