Russell Davies
Russell Davies
A view from Russell Davies, russell@russelldavies.com

Media Perspective: Brands could learn a lot from Spotify's advertising model

A few years ago, I worked on a project for a Client Who Cannot Be Named devising packaging and pricing strategies for, as it put it, "All Music Ever".

It seemed massively futuristic at the time. The client suggested that soon All Music Ever would be easily accessible via the net and mobile devices. It wanted us to think of imaginative ways to package and sell it. It wasn't an easy problem. How much would you pay for All Music Ever?

Well, with the recent roll-out of updates to Spotify, it looks increasingly like the answer is £9.99 per month. Or listen to a lot of terrible ads.

Spotify is now the nearest thing that you can get to All Music Ever, reasonably easily and cost-effectively, and it's causing all sorts of fuss in musicland. Because as well as allowing easy syncing of your local music files, nice integration with your mobile device and good tools for listening offline, Spotify has added a load of social features that make Apple's iTunes look rather standoffish.

And it did it through quick integration with Facebook, which doesn't hurt Facebook's ambitions either. There really is a war brewing over who will control the music ecology - and who will be central to everyone's social world.

But perhaps more relevant to us is the light this all throws on the role of brands. Think, for instance, about advertising, because Spotify's business model makes one thing very clear - it's worth £9.99 per month to a lot of people not to listen to the ads we all make.

In fact, Spotify has a curious relationship with advertising, one that's possibly going to be more typical in years to come. It probably doesn't want the ads to be too good because that reduces people's incentive to upgrade to a premium account. I'm sure that it would rather have a customer giving it cash than having to chase it from you via an advertising sales department.

There's never really been that problem with ITV - it likes the ads being good, it wants you to stay tuned in - but as more media channels get a premium ad-free version, it's going to be an interesting balance to strike.

But perhaps the brand opportunity of Spotify is even more interesting. Because more than eight million tracks is a daunting prospect to a lot of listeners. That's why people like radio; they want someone to pick the music for them. And they might need a simple, understandable entity with clear values to help them with that - something like a brand.

Because as more services like Spotify arrive, offering All Media Ever for not much money, curation's going to become more and more important - and that's something brands might do well.