Amazon announced yesterday that they’re releasing an online service (a “cloud”) that allows people to store their digital music and access it from various digital devices, though they still have some legal work to do in sorting out licensing issues with the record labels. I’m a big fan of Amazon and the announcement got me thinking about the different music services I use and what I really want out of a music service. Currently, I use iTunes to buy music and Pandora to discover music and Last.fm to log my top artists, albums and songs. I don’t subscribe to any of the steaming music services like Rhapsody and I don’t yet interact with music-based social networks, though I could with my Last.fm profile.

All-in subscription services like Rhapsody are very appealing -- all the music you want, on-demand for 10 bucks a month. The industry consensus seems to be that the subscription services generally target listeners that have more money than time and ownership services like iTunes target listeners with more time than money. I can afford the subscription service but there’s something about owning my own music library and being stuck with it that’s appealing to me. Sometimes having limited options can be a good thing.

All that said, using three different services is a pain and there are still some things I’d like the services to do that they don’t. In a perfect world, here’s what I think an all-in-one service would include:

Cloud: all of the music I own (my library) could be easily accessed through the service and on demand on my home or work computer, or on the road with my BlackBerry, iPad or iPod
Discovery: the service would include a discovery component with various stations that could be streamed to any device (similar to Pandora now) but I could easily switch between channels that include songs in my library and channels that don’t
Ownership: I could buy a song or album and add it to my library at any time
Social: my library and listening history would be captured regardless of where or how I’m listening to it and could be viewed by “friends” and vice-versa
Live shows: a calendar with dates and venues based on zip code for every artist in my library as well as an option to see recommendations for shows based on my library
Recommendations: an area where I can see recommended albums based on my music library/listening history/friends tastes
Music Information: artist profiles and news, upcoming releases, charts, etc.
Advertisements: Option to pay higher fee to remove them

Because of the economics of the music industry I realize that I’d likely be paying a monthly fee in addition to per-song fee/album fees, and that's ok.

The digital music industry will very likely continue to be fragmented for quite a long time and there’s no doubt that different listeners have different needs that can be met by different services. But I’d bet on the service that is able to flexibly and cost effectively blend ownership, discovery and social into one platform.

Fred Wilson and Jim Keenan, two bloggers that I admire, had a couple of interesting blog posts over the last few weeks that have got me thinking. Fred’s post was titled Marketing and the Bubble and was a follow up to his controversial Marketing post. In Marketing and the Bubble he uses the really interesting graph below (submitted by a commenter) to illustrate how in the last few years the pendulum of focus for startups has shifted towards product and away from marketing (the focus of the last bubble.) Fred says:

“…I am certain that experience has caused me and my partners to view marketing oriented startups with a fair bit of caution.”

Pendulum of Product vs. Marketing Focus

Jim’s post is titled Product Surpasses Sales, the key line is:

“The Internet has shifted the balance of power from sales to product. They’ve always worked together, but it has been sales leading the way. Things have changed. With the ubiquity of information, it’s the product that now leads sales. A good, strong, innovative product is far more important today, than the best sales team in the world.”

Rather than taking a side in the debate over product versus marketing, I’d like to make two points that I think should be kept in mind:

How much you prioritize marketing investment depends on your lifecycle stage, industry, product, customer base and the current market. An early-stage biotechnology startup trying to develop a vaccine for bacterial infections likely needs to focus mostly on product. A startup distribution company that resells telecommunications equipment to small businesses probably needs to prioritize their marketing.
Regardless of the above, I believe that your best sales & marketing (externally facing) people should be doing two things: a.) supporting your product and product team by interacting with the market and early adopters, generating intelligence and identifying the products that your customers want but don’t yet know they want and b.) influencing customers and potential customers by telling stories that speed up the diffusion of your most innovative and next generation products into the market. If you find that your product is so amazing that it gets ahead of your marketing people, it doesn’t mean that marketing isn’t a priority, it just means you need to get those people focused on the harder stuff -- the stuff that your product isn’t doing yet.