Can Spotify sustain an ecosystem? ShareMyPlaylists gets funded

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When Spotify upgraded its player, adding a bunch of social features, we feared for the many startups who were already piggybacking the service with their own playlist sharing sites.

In fact, on the very same day one such offering, ShareMyPlaylists.com, announced that it had received a significant round of funding, news which was largely buried under the weight of Spotify’s news.

Which begs the question, will Spotify’s new found social ambitions eventually bury ShareMyPlaylists altogether and the other 20 or so similar sites that currently co-exist in the music streaming site’s burgeoning ecosystem?

But first, let’s delve into the details of ShareMyPlaylists’ new funding.

The investment comes from the original team behind www.Buy.at, which in 2008 was sold to AOL for $125m and subsequently offloaded to Digital Window. The exact figure isn’t being disclosed but is said to be in the six figure range, and ShareMyPlaylists’ founder, Kieron Donoghue, remains the majority stakeholder in the UK startup.

The premise behind ShareMyPlaylists is to offer a social network for music fans to talk about their favourite artists and bands, and to “discover and rate other people’s music compilations.” To-date, Donoghue has grown the site virally and says that a few members have already built up a bit of a cult following, including one user who creates a “Soundtrack to…” playlist every month. It’s this kind of enthusiasm that the site hopes to build on.

On that note, there is an iPhone app in the works that ties in nicely with Spotify’s own offering for Apple’s smartphone. Click on a playlist on ShareMyPlaylists and it begins playing within Spotify mobile (presuming you have a paid-subscription, of course).

There’s also been support from record labels, including a promotion ran in conjunction with Warner Music UK over Christmas to promote the latest R.E.M. album. ShareMyPlaylists also features celebrity playlists from the likes of Robbie Williams, The Gorillaz, Will Young, The Saturdays, Leona Lewis, La Roux and Alicia Keys.

So what does Donoghue make of Spotify’s new social features, especially given that the music streaming service is a fan of ShareMyPlaylists.

As it stands, Spotify is very reliant on Facebook for its social offering, something that differentiates it from ShareMyPlaylists’ broader and standalone social features with music discovery at its heart.

He gives an example of a fan of Alternative music who can click on the “Alternative” genre on ShareMyPlaylists and find over 5,000 pre-made playlists. “If you find a playlist from a specific SMP user that you like, you can always go into their profile, find other playlists that they have created and off you go on the discovery route once again”, says Donoghue

And unlike Spotify, he says, you can also interact with other users, including sending direct messages, or writing on their profile. “We’re also working hard to identify the key playlists makers in our community and bringing them to the forefront of the site via the ‘Featured’ slots on the homepage and blog posts.”

Of course, none of these features can’t be added by Spotify themselves, though Donoghue thinks (or perhaps hopes) that this won’t happen. He believes that the music startup is much more concerned with becoming the default music player and library rather than another social network.

“Everybody is talking about Spotify Social as the main feature from the latest release but I think in fact it was the ability for Spotify to now play other music files that you have stored locally on your PC. That is a big step towards Spotify being the only music player we will ever need.”

Revenue for ShareMyPlaylists is generated via advertising and promotions such as the one recently held for Iron Man 2. Donoghue says that the site should break even by the end of the year.

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