Why the terms of Spotify's new SDK will become a familiar tune to developers

Shane Schick

Suffice it to say that Spotify is just as concerned as Taylor Swift about making enough money.

Just a few weeks after the superstar pulled her entire catalog from the streaming music service (reportedly over compensation issues), Spotify updated the terms and conditions of its SDK. At first glance, it looks like huge, positive news for developers, because it lets those that integrate Spotify in their apps earn revenue through Apple's App Store and Google Play. However, that doesn't mean all apps will be treated equal.

Programable Web summarized the fine print

Developers can "sell the app directly, sell access to it, and sell advertising, sponsorships or promotions in the mobile app on its web site." This applies only to non-streaming mobile apps, and the apps in question must meet its terms of use. If your app streams music, then the story is a bit different. Developers can list and distribute their music-streaming apps, but they aren't allowed to monetize them in any way. That means no fees, no adds, no sponsorships and no promotions.

I suspect the same would have been true if, say, the first developers to build apps to run on Facebook tried to create mini rip-offs of Facebook and competed for the same advertisers. On the other hand, it's worth keeping an eye on how Spotify manages its relationship with third-party developers, and how the latter take advantage of Spotify's SDK. 

Developers could look, for example, to the recent partnership between Spotify and Uber, where passengers of the car-sharing service can have their personal playlists broadcast from within a taxi. This feature, which the two startups called "soundtracking," is a great way to enrich the experience of both apps. (Of course, you could say Uber is much more than a mobile app, but you could also argue that without its mobile app, it wouldn't exist.) 

The trick will be for developers that have nothing to do with music figure out a way to fold it into the value they create with consumers. For instance, I think it would be interesting for mobile gamers to be able to add their own music to their favorite games, rather than the often tinny and irritating synth-pop that plays on endless repeat in many titles. Or think about a productivity app that changed its soundtrack based on whether you were writing something in the app, editing or reviewing a document. 

Then there's the question of whether monetization will even take place. It's hard to get users to pay for anything in an app. Instead, I see Spotify, and integration of other APIs and SDKs from more popular apps, as a way to assist with discovery. There are worse strategies than riding on the coat-tails of a chart-topper like Spotify. Think of the developers that do so as backup singers who may one day be headliners.--Shane