A mate recently sent a short message where he suggested we should create Spotify for television shows if it does not exist yet. I kind of agree that something like that would be great. The thing is I’m afraid the big boys already got their act together and have exactly what everyone wants in the works. Meanwhile it makes sense to analyze what are the reasons freemium business model has been so succesful.
The single biggest thing that has made Spotify successful is that several recording companies have invested in it. Consequently Spotify has three virtuous cycles working for it.
- Access to a huge library of content
- No need for costly advertisement sales
- Embraces existing social media services
These hugely advantageous things are pretty hard to replicate in video entertainment business. On the other hand following the same model would make the opportunity little less entizing for an entrepreneur. Basically the start-up would need to take all the development risk and then find a buyer for the finished platform. Understandably the negotiation position would be pretty poor at that stage. Considering all this I think we need to figure out something else.