YO DAWG I HEARD U LIKE FACEBOOK AND SPOTIFY…

… so we put a Spotify on your Facebook, so you can Spotify while you Facebook!

If you’ve logged onto Facebook over the past couple of days you’ve no doubt noticed the LOL-inducing new sidebar feed, so poignantly repped by our good friend Xzibit. You’ve also probably noticed that Facebook now allows Spotify users to directly integrate a music feed of what they’re listening to in real time into their status updates, similar to the way Last.fm users can automatically post their live playlists to Twitter (and FB too if I’m not mistaken). It all happens automatically once you link your FB and Spotify accounts; you don’t have to manually enter each song you’re listening to. The Facebook/Spotify integration goes one step further, too, by allowing Spotify members to click “play” and listen to the same songs as their friends from within their Facebook feeds:

Even if you’re anti-Spotify, it’s incredibly hard to deny how valuable this integration will be for bands and their record labels. Let’s break it down:

First let’s imagine that no one ever clicks “play” on these things (which wouldn’t be the case, but bear with me here) and look at this purely in terms of advertising value. I’m not sure exactly how expensive Facebook text ads are, but I think a $0.25 CPM is a fair assumption. Let’s say I’ve got a very metal 666 friends. If I’ve got my Facebook and Spotify linked up, I’m giving any band I listen to $0.17 worth of free advertising any time I stream one of their tracks on Spotify. Chump change, to be sure. But let’s say an artist’s songs gets 100 streams a day throughout the U.S., or 1,000, or 10,000; all of a sudden that artist and their label are the recipients of $17.00, $170.00 and $1,700.00 worth of advertising, completely for FREE. That right there is incredibly valuable on its own, and any labels or bands who aren’t on Spotify are completely missing out on this free advertising.

But the free advertising isn’t the only value here, of course; some percentage of people will actually click those “play” buttons, resulting in an admittedly very tiny clink of change being deposited in some band’s bank account. Also chump change. But if artists are getting 100, 1,000 or 10,000 streams per day over their entire catalogue… well, yeah, you can see where this is going. It can really add up.

But it doesn’t even stop there. Some percentage of people who click “play” because I happened to be listening to some band on Spotify will become fans of that band and will spend money on their t-shirts, concert tickets and even albums at some point in the future. This can’t be measured in any tangible way, but it’s important to consider too. The Spotify/Facebook integration’s power to introduce people to new music is incredible.

So, you tell me: now that we’re not talking in theoreticals and we can see a real example of the value of Spotify that extends beyond the fractions of pennies bands earn from it in royalties, what do you think of certain labels’ decisions to pull their catalogs from the streaming service? We all know how huge Facebook is and the power it has to spread information; bands that aren’t on Spotify are gonna miss out, big time.

-VN