Spotify introduces merchandise to help artist relations

Steven Loeb · January 20, 2014 · Short URL:

Spotify will not make take a commission on what is sold, also allowing artists to list for free

Every time I write about the music streaming space, it always comes down to the same thing: there are just so many companies all vying for what are, essentially, a limited number of listening hours. There's Pandora, Songza, MicrosoftAppleNokia, and Google, just to name a few.

So how does one of these companies make sure that they have a good relationship with artists, and that the artists also have a good n incentive to stay? Give them a nice, new revenue stream.

In a particularly inspired move, Spotify announced on Monday that is now allowing artists to list their merchandise,  including t-shirts, vinyl, posters, and bundles, on the site through a new partnership with Topspin. And, what's more, the artists can do it for free and neither Spotify, nor Topspin, will make money off of what is sold. 

Here's how it works:

First, a Topspin ArtistLink account has to be created, in which it will have to be verified that the person creating the account is the official representative of that artist (they can do this either by connecting one of the artist’s social media accounts or by emailing Topspin). 

Once that is done, all they have to do is creating a listing with an image, a title and a description. Each listing will be moderated and approved to make sure it’s a legitimate merchandise offer. Up to three items of merchandise can be listed within Spotify at any given time. 

"There are zero fees or commissions from Spotify or Topspin and you don’t need to change how you sell merchandise at all," the company wrote. "ArtistLink links to your existing merchandise anywhere on the web and displays it on Spotify’s artist pages."

Spotify says that is has been testing the service for the last month, and "the response from fans has been fantastic."

"We’re really excited that Spotify’s 24 million music-loving users can now see merchandise and concerts while listening to their favorite artists, and that we, in turn, can provide additional revenue opportunities for artists of all sizes," the company said.

The feature will not be available to all users just yet; only users in the following english speaking countries will see merchandise listings within Spotify. That means the United States, the United Kingdom, Ireland, Australia, New Zealand, Denmark, Sweden, Norway and Iceland.

This is a pretty genius move to get to in good with artists and their representatives, giving them an added incentive to have a relationship with the company, though it might have been wise for Spotify to take at least a little something off the top, as it is not yet profitable.

Despite taking in $578 million in revenue during 2012, an increase of 128% from the year before, the company also lost $78 million, up from $60 million the year before. There are no figures for 2013 out yet, but Spotify can't be happy if the trend continues in that direction.

Founded in 2006, the Swedish music-stream company has raised a total of $538 million. It most recently raised $250 million in a round led by Technology Crossover Ventures.

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Pandora, the leading internet radio service, gives people music they love
anytime, anywhere, through a wide variety of connected devices: laptop and
desktop computers, smartphones, connected BluRay players, connected TVs,
etc. Personalized stations launch instantly with the input of a single “seed” –
a favorite artist, song or genre. The Music Genome Project®, a deeply
detailed, hand-built musical taxonomy, powers the personalization or
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Pandora crafts personalized stations from the more than 800,000 songs that
have been analyzed since the project began in January 2000.
More than 75 million people throughout the United States listen to
personalized radio stations for free on Pandora through their PCs, mobile
phones and devices such as the iPad, and connected in-house devices
ranging from TVs to set-top boxes to Blu-Ray players. Mobile technology has
been a significant factor in the growth and popularity of Pandora, starting
with the introduction of the Apple app store for the iPhone in the summer of
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today, according to Nielsen, is one of the top five most popular apps across
all smartphone platforms.

Pandora is free, simple and, thanks to connectivity, available everywhere
consumers are – at the office, at home, in the car and all points in between.
In 2009 the Company announced that Pandora would be incorporated into
the dashboard in Ford cars via SYNC technology; GM has already followed in
announcing plans to integrate Pandora into its vehicles and Mercedes-Benz
introduced their Media Interface Plus device that works with the
free Pandora iPhone app to provide direct control of Pandora from in-dash
stereo controls. This was all great news for the millions of Pandora listeners
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personalized stations while driving. More than 50 percent of radio listening
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Today tens of millions of people have a deeply personal connection with
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These highly engaged listeners reinforce the value Pandora provides to: 1)
musicians, who have found in Pandora a level playing field on which their
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industry, which has found in Pandora a highly effective distribution channel;
and 4) automobile and consumer electronics device manufacturers, who have
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to consumers.

Pandora continues to focus on its business in the United States. The radio
arena has never been hotter, thanks to technology that enables radio to be
personalized to the individual and more accessible than ever before. Right
now millions of people listen to Pandora in the United States and we hope
someday to bring Pandora to billions of people around the world.

• 2000 – Tim Westergren’s Music Genome Project begins.
• 2005 – Pandora launches on the web.
• 2008 – Pandora app becomes one of the most consistently downloaded
apps in the Apple store.
• 2009 – Ford announces Pandora will be incorporated into car
dashboard. Alpine and Pioneer begin selling aftermarket radios that
connect to consumers’ iPhones and puts the control and command of
Pandora into the car dashboard.
• 2010 – Pandora is present on more than 200 connected consumer
electronics devices ranging from smartphones to TVs to set-top boxes
to Blu-ray players and is able to stream visual, audio, and interactive
advertising to computers, smartphones, iPads, and in-home connected