Spotify’s Competition

Streaming music online is a relatively new development in the music industry. Paying for MP3 files off of iTunes and torrenting them off the internet for free seem like archaic and cumbersome methods of listening to music when it’s only $10 for premium music streaming subscriptions. Because of this, paid and free music streaming has taken off in the past few years. At the end of 2016, there were 132.6 million music subscribers, of which Spotify owned 35% of. In second place, Apple Music owned 15.6% with 21 million subscribers.

Although Spotify is killing it with how many paid subscribers they have, there are segments in which they are not the top dog. Personally, I don’t mind forking over the ten dollars a month for Spotify’s premium version, however, there are more people who are more casual and opt out for the free version. Spotify had 159 million Monthly Active Users (MAUs) in 2017, with 71 million paid and 92 million ad-supported (free). Because of this, Spotify has listed radio companies as their number one competitors, while other streaming services are listed as second. Spotify has already taken over paid subscriptions, and now they want to focus on providing benefits that will allow them to attract the segment of people who like listening to talk radio content and podcasts.16373624539_64c91d0931_b

With that being said, a key competitor for Spotify is Slacker Radio. It offers a wider selection of music than Spotify, in addition to some key features that Spotify falls short on. First, Slacker Radio has lyrics for their songs, which is a small feature, but it’s definitely nice to have. Another one is Slacker’s “DNA Stations” which are channels hosted by music experts that play music that influenced major artists. A creative feature about Slacker Radio is that you can fine-tune your listening experience. In a similar way as SiriusXM Internet Radio, Slacker Radio has slider bars that let you adjust metrics of the station, which will play similar music. Additionally, Slacker Radio has great non-music content, such as news, live ESPN sports talk radio, Weather Channel updates, and Slacker Stories.

SiriusXM Internet Radio is another direct competitor for Spotify, simply because of their vast selection of live radio stations — something that Spotify lacks. Sirius XM offers a variety of different content on their radio stations, both music, and non-music. Although you can’t pull up specific artists you’d like to listen to on SiriusXM, you can find plenty of stations that have the specific artist, with the added feature of being able to tweak your listening experience based on their channel-specific slider bars, which allow you to control library depth, familiarity, music style, tempo, region, etc.

Being that Spotify is now the giant of music streaming, it won’t be long until the unique features of other streaming platforms like Slacker Radio and SiriusXM Internet Radio aren’t so unique anymore. A quote that precisely sums up Spotify’s outlook comes from the Music Industry Blog which states, “The first chapter of Spotify’s story was about becoming the future of retail. The next will be about becoming the future of radio. And the increased focus on spoken word is not only about stealing radio’s clothes, it is about creating higher margin content than music. None of this is to say that Spotify will necessarily execute well, but this is the strategy nonetheless.”

If you found this brief analysis of Spotify’s competitive landscape informative, I encourage you to read my next post, where I’ll be analyzing Spotify’s target customer.




3 thoughts on “Spotify’s Competition

  1. I am a huge music snob, and I pay for Spotify, Apple music, and Soundcloud. I would have to say that Spotify is my favorite platform to discover new music. It has by far the most accessible interface, it is well organized, and you can always find the right kind of music for your taste. If you think to times when people had to buy CD’s, $10 per month is an incredibly low price to pay. If you can’t pay that much, you just don’t enjoy listening to music enough.

    I have also tried out satellite radio. I think the price is way too high for something that you don’t have full control over. XM radio costs hundreds per year, and I don’t think its worth it. The only advantage I have found from XM radio is when they stream concerts live over the radio. For me, the streaming of live shows was about the best part of XM radio. Other than that, you can find all the same sets for free on Soundcloud, so why pay just for that? Another advantage was the talk shows, but I didn’t get into all of that.

    I recently read an article as to why Apple music failed to take down Spotify. The user interface of Apple music is junky; it has giant blocks assigned to each song. Spotify is a straightforward list that people can easily see; this is one of the main reasons Spotify still has a lead, not to mention the fact that they were the first hugely successful streaming service.

    What Spotify can do to take down the competition would be offering full live streaming of concerts, complete artist sets as soon as they are released, and more options for video and other media. They could incorporate more talk shows, podcasts and maybe even audio books. They could have differently priced packages for the possibilities that I have listed above. I seriously don’t know why Spotify has not done this yet; maybe it would not be profitable enough for them. I believe that they should explore more possibilities to increase the number of users.

    Liked by 1 person

  2. Not gonna lie, I’m a bit hurt. My fellow blogger really forgot one of his main competitors, the one who is closest to profit out of the bunch. Soundcloud.

    Soundcloud and Spotify almost became one entity. Spotify saw the opportunity to take one of its stiffest competition out of the race early. Neither platform has reached their true potential yet. Spotify couldn’t commit to the purchase because the different licensing and things that go along with Soundcloud would be so expensive that they would have to cancel certain future plans for Spotify and they chose against that. 

    6 months after the Spotify deal falls through there is talk on Twitter about Soundcloud coming to an end. After an enormous outcry from fans, and artists alike the hero Chance the Rapper steps forward to solve the situation. Of any rapper in the world I would probably be most happy to be rescued by Chance the Rapper because he seems like one of the nicest guys out here. He really worked with Google donate $2.5 million to public schools in hometown of Chicago. So if the issue was financially related it is entirely possible that Chance could have made a deal with the Soundcloud owners to keep their business afloat. 

    There hasn’t been any conversation about catastrophe surrounding Soundcloud for quite a while. Soundcloud has a cheaper premium subscription than Spotify’s base price. Soundcloud has more unique listeners. 

    Going forward it will be interesting to see how the audience chooses sides and if one of these two giants of the industry will be left staring at the dead body of a lost channel.

    Read more about the competition between social media music streaming sites and other issues from my perspective on my blog!



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