Spotify today announced an in-home strategy called Spotify Connect. Spotify will be built itself into the chipsets of a number of digital home audio manufacturers’ audio systems and speakers, including Argon, Bang & Olufsen, Denon, Hama, Marantz, Philips, Pioneer, Revo, Teufel and Yamaha. Integrated devices will have a Spotify Connect logo, sort of like Intel Inside for music. It’s a smart move of the sort that I have been advocating for years.
The living room is in many ways the forgotten front in the digital music equation, and ground is being lost at an alarming rate, particularly consider it is also the home front. It was once the case that people used to focus most of their living room hardware spend on music audio equipment, changing their hi-fi simply because the manufacturer had changed the in-vogue colour from chrome to black etc. Now though, that spend has migrated to the TV, which has got progressively bigger with an ever bigger pile of boxes underneath it. The hi-fi is typically either a dusty old midi system, a docking station or nothing at all. Music is disappearing out of the living room, and for all the possibilities connected TVs may present, the music industry does not want to rely upon a device that is designed for watching – not listening – as its prime living room device.
Back in 2009 I wrote a report at Forrester that laid out a theoretical concept for an in-home music service-integrated device. I argued that this device needed to be able to deliver music even when offline; an extensive catalogue as soon as the device was turned on; and great discovery tools. Spotify Connect ticks all of those boxes. I also argued that the device should leverage telco partnerships, integration home audio into subsidized routers – I still want to see that happen.
This appears to be being seen as something of a competitor to Apple’s AirPlay home streaming technology but in reality they’ll not be overly concerned as paying Spotify users are such a tiny subset of iTunes customers (approximately 1% of the total iTunes customer base in fact). And for as long as 9.99 remains the leading price point those proportions will hold largely true. Besides, Apple have never shown the greatest appetite for AirPlay as a music play (though they should).
Sonos is the company who should be more concerned at this. Sonos has done an incredible job of creating and building the in-home streaming audio market and continues to go from strength to strength. However key to its longer-term value proposition is streaming music service integration. (It first integrated Naspter back in 2007.) Now the biggest on-demand subscription service on the planet has just become native on a plethora of competitor device portfolios. Sonos has always prided itself on being service-agnostic. We are about to find out just how much consumers consider that to be an asset, particularly when many of the Spotify Connect devices will pushing at a slightly lower end of the market.
From the device companies’ perspective this is an interesting move: they’re making the bet that Spotify is going to be around for a long time. Hardware R&D and marketing cycles are much longer than for software, so these companies will have been working on this for some time and will be planning years ahead. Spotify will obviously have made assurances and guarantees to their partners, but as today’s news that Microsoft acquired Nokia shows, the technology company landscape can change in an instant.
All in all though, a welcome move, and hopefully the start of a wider industry push for reclaiming some of the living room. I say ‘some’ because much of that ground is lost for good. This is a window of opportunity that is closing fast. Now is the time to seize the remainder of the opportunity.