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.
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.