There have been a range of mixed reactions to Spotify over the last year, generally,  it appears to be a good innovation that will benefit both the music fans and the music industry. Could Spotify be the future of the music industry?

For those of you who aren’t already aware, Spotify is an application that allows music fans to listen to music free of charge, providing you listen to an advert every half an hour. The database holds over 4 million songs and is perfectly legal to use, as the music artists are funded by advertisers who pay to place adverts between songs (similar to a radio show).

It comes as no surprise that the four big boys of the industry (Sony, EMI, Universal and Warner Music) have eagerly agreed to working with Spotify in such a financial desperate time, while I am not sure what the figures are for how much an artist earns per stream, I can be fairly certain that it’s no where near the amount that the record labels were used to back when CD’s were selling for £16.99!

The good news is that this shows that the music industry is slowly but surely adopting a new business model that actually solves the problem of the music fan – people do not want to pay to listen on their computer or MP3 player.

Over the years many online companies have tried to offer a solution, such as Myspace and Purevolume, both of which failed to meet the needs of the music fan as they did not provide an easy and convenient way to store a collection of songs in one place.

iTunes also failed to provide a prolonging solution, as their answer to the decreasing MP3 sales, was to stick a digital rights management code on all music files to limit illegal sharing, which of course didn’t work very well! It appears that iTunes have now quietly bowed down and declared defeat by removing it’s DRM.

Is the Spotify business model the future of the music industry? Perhaps not, but in my opinion it’s certainly a step in the right direction.