What Spotify tells us about the unintended effects of innovation
I have long been fascinated by the unintended effects of innovation: every time a context changes, the different actors involved tend to reorganize their roles and how they adapt to change, sometimes prompting expected responses, sometimes unforeseen ones.
The advent of streaming in music, and Spotify in particular, provides a case in point: what was expected to be simply a simple and convenient new distribution channel that would keep users away from the temptation of irregular downloads has led to numerous changes in music today, such as shorter songs and albums with more tracks.
Spotify was the music industry’s response to the spread of irregular downloading: since the main attraction was accessing music and individual songs instead of having to purchase an entire album, Spotify offered an easy-to-use interface where we could find virtually any song, instantly, and with a freemium model that accommodated both those who wanted free music, conveniently peppered with very annoying advertising, and those who preferred to pay a flat fee and avoid it.
The model worked especially well for the record labels and their shareholders at a time when they were being seen as the bad guys. In fact, it worked so well they were able to increase their revenues by continuing to keep most of their…
