We7 puts faith in premium packages, but what about the product?

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Streaming music firm We7 announced at the recent MidemNet event in Cannes that it will launch advertising-free premium services on 1 February, but today it’s released the prices for its two packages. However, the jury is out on whether revenues from premium subscriptions will cover the costs of music licensing, which remains the final ‘last mile’ in making free online music streaming services scale effectively.

We7 Premium will offer unlimited streaming of over four million songs (including personal radio, playlists and sharing) for £4.99 a month. There’s an introductory offer of £3.99 a month for the first 90 days.

We7 Premium Plus adds mobile to the element, making it a direct competitor to Spotify’s mobile offering. We7 will start with iPhone and Android apps, bringing in other smartphones later this year. Crucially they are matching Spotify’s offline mode ability to listen to your playlists without a 3G or Wifi connection. That costs £9.99 a month, the same price as Spotify’s premium product.

Now, there is a way forward here for We7 since Spotify’s free product is still invite-only. We7′s is free-to-air for anyone. But increasingly I think this battle will come down to quality of service, and just, well, user experience.

User experience matters in music

Spotify’s desktop and mobile services avoid Flash players and web streaming and instead use P2P to create an extremely luxurious user experience. Here’s what it’s often like to crank up a track on We7 or a common-or-garden Wifi connection, listen to the first 20 seconds:

Listen!

What we also see is that a decent desktop app like Spotify’s has an effect on services which concentrate on streaming from a site. It’s already potentially killing off local competition in France, where Deezer is going through huge problems and has failed to get a desktop application out.

At the same time I think We7 is missing a huge trick, namely it’s widget strategy. In theory it could in fact have a huge advantage over Spotify in terms of distribution. It’s widgets can be embedded in any web page or social page, so there are many possibilities.

Spotify has taken a different approach, letting others be creative about playlist sharing, hence Sharemyplaylists, Spotifyfriends and Spotylist.com among many others do the heavy social lifting.

And yet when you look at the We7 site the feeling you get is not of a celestial jukebox or of a vibrant social site, but of a rather average, editorially driven site.

Here’s a new strategy for We7

Look at Tweetmeme and SoundCloud.

Tweetmeme’s widget strategy has been a case-study in how to distribute content. By getting sites to embed its retweet button, it’s traffic has gone through the roof and it is already being talked about in terms of an acquisition by Twitter at some point. We7 needs to seriously look at how it’s widget embeds could be distributed far better. We7 could also look at how Tweetmeme’s actual site “bubbles-up” content from the crowd of users.

In the same way, SoundCloud’s highly customisable and social features could be applied to We7′s service. We7 could take some of those ideas and make them far more applicable to it’s mainstream audience, which is quite different from SoundCloud ‘music obsessive’ audience.

We7 could also look at some of the ideas in Gigulate, which is trying to be a kind of Techmeme for music.

That’s We7′s site. But what it does on the mobile will also be crucial to how this battle with Spotify will play out. It’s quite clear now that Spotify’s premium subscriptions rocketed once it launched a mobile version which offline caching.

That still leaves the issue of the “global play”.

We7 is concentrating on the UK. Spotify’s free version is currently available in Sweden, Norway, Finland, the UK, France and Spain. You can use Spotify Premium in all countries, however you can only buy premium, and sign up, in its launch countries. So in other words Spotify is already beating We7 on global expansion and mindshare. And it’s planning a US launch, probably this quarter.

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