Spotify unveils social media-like overhaul

Speaking at an event in New York last night (6 December), Spotify’s founder Daniel Ek said the update solves the problem users were putting to the company: that Spotify is “great” when they know what they want to listen to, but not so great when they don’t.

The Spotify interface – which will soon also be accessible via browsers as well as the downloadable desktop and mobile clients – will be populated with newsfeed-like information, featuring updates on what users’ friends and the influential people and brands they follow have been listening to and sharing. It looks similar in style to the recent MySpace design overhaul.

Spotify will also include additional content such as “music [you may have] loved when you were 9-years-old”, reviews, lyrics, artist bios and whether bands users listen to are playing upcoming concerts nearby.

Ek said the update will make Spotify a more “intuitive and personal” experience for users.

The changes, which will roll out next year, will now offer brands with apps on Spotify the opportunity to push out updates on the platform – rather than having to advertise their Spotify app updates elsewhere to attract the attention of users. One example demonstrated was a push notification sent to the mobiles all the followers of an artist when their new album was available on Spotify.

Spotify also used the event to reveal its latest user and listening figures. The service now has 5 million paying subscribers – up about 100 per cent year on year – and 20 million monthly active users across its free and paid-for service. In the lucrative US market it claims to have attracted 1 million subscribers, which could mean it has caught up with its 11-year-old digital music rival in the region Rhapsody, which also claims to have 1 million subscribers.

Spotify also reacted to criticisms that have recently arisen in some camps, alleging it pays a relatively “low” amount in royalties to artists compared with CD sales or iTunes downloads. Ek said the service has paid out more than $0.5bn to artists since it launched and that 70 per cent of all the money that comes into Spotify goes back to rights holders.

He added this was driven by an increase in advertising, growth in user numbers and its ability to convert registered users into paying subscribers.

Speaking to Marketing Week after the launch event, which was also streamed in London, Spotify’s European vice president Chris Maples, said Spotify is the “best place” for brands to associate themselves with music – a claim he believes will only be strengthened once the new updates are rolled out next year.

He adds: “The new service will help to scale our audience and the our change in focus towards discovery of music will create deeper engagement with our user base, which is really important to brands.”

According to Spotify’s 2011 accounts, filed in Luxembourg in August, the company has yet to turn a profit. Revenues more than doubled to €187.8m, while losses increased by 59 per cent to €45.4m.

Ek said: “We are very comfortable that if we didn’t invest in growth and adding more markets, we would be a profitable company.”