It's official: music-streaming Spotify is on board as one of the first backers of Facebook's new Libra cryptocurrency.
The social network will launch the cryptocurrency in 2020, complete with a wallet developed by Facebook's new Calibra subsidiary. Backing all this is The Libra Association, which is defined by Facebook as an independent, not-for-profit organisation.
Spotify is one of that body's founding technology and marketplaces partners, alongside the likes of eBay, Uber and Lyft, with MasterCard, Visa, PayPal and Stripe among the partners in its 'payments' category.
Now Spotify published a blog post explaining why it's getting involved, saying:
Libra offers massive opportunity for simple, convenient, and safe payment over the internet (particularly for the 1.7 billion adults worldwide without access to mobile money, a bank account, or a payment card). We’ve seen this directly in many of the developing markets where we operate.
Spotify's chief premium business officer Alex Norström offers a quote with more detail:
One challenge for Spotify and its users around the world has been the lack of easily accessible payment systems – especially for those in financially underserved markets," he said. "This creates an enormous barrier to the bonds we work to foster between creators and their fans. In joining the Libra Association, there is an opportunity to better reach Spotify’s total addressable market, eliminate friction and enable payments in mass scale.
As Musically wrotes, for now this appears to be more about listeners paying for Spotify, than about Spotify using blockchain/crypto technology to pay artists directly.
But ICE's senior strategy manager Daniel Fowler (formerly of blockchain startup Jaak) has also been tweeting his thoughts, following the Calibra announcement:
If they get this right then this is the infrastructure that will enable web2.0 aggregators to turn their community into a value exchanging worlds. These companies have spent the past 10 years creating digital nation states, and this is now the platform to run an economy in them. Think about this from the point of Spotify, one of the validator nodes. They have aggregated creators and consumers across a marketplace, but lose out on the vast majority of the value that is exchanged. Libra is the infrastructure to enable instant global payments. Currently it takes months for those payments to come through, they are subject to forex and international banking charges, delays through intermediaries etc. etc - we already know all the challenges with the digital music industry. Innovation that has made it to market to date has been primarily around forecasting plays and then offering an advance against that (it's low-key financial services for creators; pay day loans). This was the best that could be done until the infrastructure fundamentally changed.
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