Spotify extends free unlimited music. But why?

Nine months after Spotify launched in the U.S., the Swedish digital music company announced that it will extend its unlimited free service -- at least for the time being.

The free service comes with advertising, and Spotify continues to offer a premium, ad-free service that costs $5 a month for computer access to its catalog of 16 million tunes or $10 a month to listen on mobile devices.

So the "honeymoon," as the company calls it, continues.

That could mean one of two things. The first is that Spotify is so successful at converting free users to paid users that it doesn't feel the need to start limiting the all-you-can-eat buffet for its non-paying users.

While Spotify does not release U.S. specific numbers, it did update its figures to say that it currently has 3 million paying customers out of 10 million "active users," that is, people who have logged into the service at least once in the last 30 days. 

The second possibility is that Spotify is selling more ads for the free service, making it less of a financial drag on the company. Spotify must pay labels a fee each time a song is played on the free service. The conventional wisdom has been that the ad revenue Spotify receives has not been enough to cover those costs. If that equation has changed, Spotify would have less of a reason to move people on to the premium service.

In Europe, Spotify also rolled back its five-spins-per-song limit, put in place back in April 2011, for Finland, Sweden, Norway, Netherlands and Spain. (The United Kingdom, France, Germany, Austria, Belgium, Denmark and Switzerland still have such limits.) And all 12 European countries continue to operate with a 10-hour-a-month cap. New Spotify users are exempt for caps until after they've used the service for six months.

But Americans are getting an indefinite break. Enjoy it while it lasts. 

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-- Alex Pham

Artwork courtesy of Spotify. 

 

Billboard Hot 100 now counts on-demand streams

Is your song hot or not? 

Billboard, the publisher of the Hot 100 singles and other music charts, will be incorporating spins from on-demand streams from services such as Spotify, Rhapsody, Muve, MOG, Slacker and Rdio in determining which songs top its charts. It will also publish a new chart for top on-demand streaming tunes, with the first chart debuting Wednesday.

The change in the industry's de facto hotness formula is a joint effort between the magazine, Nielsen Broadcast Data Systems and the National Assn. of Recording Merchandisers.

"With some of these services growing exponentially and integrating into the social web, the time is right to launch a streaming chart and to incorporate this activity into the Hot 100," said Bill Werde, Billboard's editorial director.

The charts will rely on data from Nielsen, which has been tracking digital music streams since 2005, but had not publicly shared the information. In the first 70 days of this year, Nielsen said it captured 4.5 billion audio streams -- 494 million during the week that ended March 4, up from 321 million in the week ended Jan. 1. Nielsen does not track Pandora, which does not provide data to Nielsen on its personalized radio streaming service to more than 20 million users. 

Among the nuggets found in Nielsen's data, which will be released Wednesday along with Billboard's new On-Demand Songs chart and the revamped Hot 100, is that streaming activity decreased 17% in the week after Christmas, while digital download sales jumped 20% -- presumably from people cashing in their iTunes and Amazon.com gift cards.

Those looking for evidence that streaming services eat into music sales will be disappointed -- even as on-demand streams hit all time highs this year, digital track sales are up 7% so far this year compared with the same period in 2011.

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-- Alex Pham

Twitter and Facebook helping to revitalize some Sunset Strip clubs

In a forward-thinking tech-based panel that could have easily taken place earlier this week during SXSW Interactive, three wired leaders of legendary Sunset Strip entertainment venues discussed today how social media is helping them bring back audience and work together.

In what has been deemed "co-opetition," the Viper Room (@theviperroom), the Roxy(@theroxy), and the Comedy Store (@thecomedystore) have been working together in creative and digital ways to bring more attention to the clubs during these trying times.  It all started when Roxy owner Nic Adler saw the Viper Room enter the world of Twitter.  He virtually and publicly welcomed his competitor to the space by announcing their virtual presence to the thousands of "followers" interacting with the Roxy via Twitter. That simple gesture of goodwill opened the floodgates of camaraderie that has helped the Roxy increase its business by 30% over last year, Adler said, and has helped the Viper Room see its regulars return.

Nathan Levinson, marketing director of the Viper Room, said that because of the likes of Twitter, Facebook, and now Foursquare, he has been able to cut advertising spending in half. Adler says that the interaction between his customers, and would-be customers, via social media has made his club better and has restored the image of the Roxy to many.

Another element is the age of the panelists. Adler (@nicadler) says it's because he, Levinson (@n8thesk8), and the Comedy Store's Alf LaMont (@alflamont) are from a younger generation that they are more willing to put aside traditional approaches to competition and marketing.  Not only have the men worked together to launch the Sunset Strip Music Festival, which some have compared to a taste of SXSW, but they have helped each other master Twitter, which they agree works best in their busy lives.

"Twitter is the fastest, most forward-moving form of social networking", Levinson said in the "Social Media Case Study of L.A.'s Sunset Strip" panel. "It is my favorite."

When asked which he prefers, Adler compared Twitter and Facebook thusly: "One is when you're moving and one is when you're sitting at home."

The newest social media craze, Foursquare, hasn't gone without notice from these men. Simply "checking in" on Foursquare will get you entry to the Comedy Store, LaMont said, while checking into the Roxy will get you upgraded to VIP, Adler announced.

"We're just trying to give people a little something extra with social media," Adler explained. "It's promotion without flat-out promoting."

-- Tony Pierce

Photo: Alf LaMont, Nathan Levinson, Nic Adler and panel moderator Kyra Reed. Credit: Tony Pierce / Los Angeles Times

SXSW: Location, location, location!

In entertainment, as in real estate, it's all about your location.

As thousands of bands and their fans flock to South By Southwest this week and next, Austin, Texas, will be ground zero for a burgeoning technology called location-based services. 

For the uninitiated, here's how it works: Users broadcast where they are, either by turning on the feature in their cellphones or by explicitly "checking in" to a specific location, say Grauman's Chinese Theatre on Hollywood Boulevard. Doing so lets them see who else using the service is nearby, for example, or what types of events are taking place around them.

One company, a start-up called Loopt based in Mountain View, Calif., currently lists more than 700 parties, talks, films and concerts a day in Austin during the SXSW festival. By telling Loopt where you are, the service serves up a list of events happening that day within 1,000 feet of you.

In other words, Loopt aims to answer the perennially vexing social question: What's near me that I can do now?

Wondering what you should do at SXSW? Try Plancast. If you're in the mood for a treasure hunt, Booyah has ginned up one, sponsored by ZonePerfect Nutrition Bars. Want to find a date to go with you to a concert at SXSW? Try Grindr (if you are gay) or Loopt Mix. If you're hungry afterward the show, Foursquare has teamed up with Zagat to serve up restaurant reviews near you.

Loopt, funded by Sequoia Capital and NEA, was among the first to dive into location-based social networking when it started in 2006. Since then, a rafter of other companies have jumped in, including Foursquare, Booyah! and Gowalla.

Yelp, a site where users review restaurants, among other things, also uses the feature. Twitter just flipped the switch on geo-location so users can share their whereabouts with their followers. Facebook recently announced it will add the feature in April so its members can update their status messages with not just  what they are doing, but also where they are doing it.

You can imagine all sorts of businesses salivating over the ability to know the exact location of their potential customers. If a service notices that you tend to sneak out at 4:30 p.m. on Fridays to a bar for some early Miller Time, it could send you a coupon at 4:00 p.m. from a nearby bar for a happy hour discount. Those are called hyper-local ads.

But wait. There's more. Media and entertainment companies have been experimenting with the technology to create buzz for upcoming events. At Comic-Con last year, movie studios and TV networks sent fans on scavenger hunts throughout San Diego to seek out clues that promoted their upcoming projects, including "Alice in Wonderland" and "Fringe."

These services have been percolating for some time, but until recently they've remained on the bleeding fringe used primarily by uber tech geeks. So why are they bubbling up now?

South By Southwest could very well be the place where location-based services start hitting the mainstream.

"This is the first year for this conference where almost everyone has a phone capable of location-based apps to help them find cool things," said Sam Altman, chief executive and co-founder of Loopt, which has 3 million registered users. "Secondly, there has been shift in public perception. When we started our company, everyone thought we were crazy. No one would want to share their location. That would be creepy. Now, they’re not afraid of that anymore."

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Photo: Compass by psd via Flickr.

Five (non-obvious) ways to get new fans

Ian Rogers (left), CEO of Topspin, and Tom Silverman at the New Music Seminar. Credit: Alex Pham, Los Angeles Times.

If you're a musician, your magic number is 1,000.

That’s the number of “true fans” required to launch a band from being a night job to a day job, at least according to Kevin Kelly, who wrote a famous essay on the topic. The theory goes that if you can get 1,000 hard core fans to pay $100 a year to attend your concerts, purchase your songs and buy your T-shirts, you'd have a tidy $100,000 income. (Of course, there are minor details, such as expenses and the fact that there may be other people in your band. But that's a topic for another day.)

So where do you find fans, now that you’ve already recruited your parents, roommates and cousins to be your fans on Facebook?

We asked the industry pros who came to the New Music Seminar in Los Angeles on Tuesday for their best, non-obvious tricks for bagging new fans. We’ve distilled their advice into five quick tips.

1)    Play nice with search engines. So the obvious thing is to get people’s email address. One of the less obvious ways to get new fans is to have good [search engine optimization]. Thirty percent of new fans come from emails. But 30% come from Google or Yahoo. It’s people who are using search engines to find you. You need to make sure that if people look for you, they will find you.  – Ian Rogers, Topspin