Over the coming 12-18 months, I think one streaming service will begin to gain market share as the others fade away
Global demand for streaming shows no sign of slowing. In fact, our own Fans.Passions.Brands. study, published this week, found that 49% of adults globally use such services. But it is a crowded market, and I can’t help feeling that most people won’t want to start switching between two or more different apps to listen to their favourite artists.
Over the coming 12-18 months, I think one streaming service will begin to gain market share as the others fade away. Above all, the public perception of the dominant Spotify, Apple and Amazon brands will determine which company manages to make its offering a success. All three possess individual strengths that set them apart from the competition, but all three also show areas of weakness that threaten to undermine their efforts.
Strength of brand
In terms of the world’s most valuable brands, Apple sits proudly at the top of the pile – while Amazon and Spotify don’t even make the top 10 – but that doesn’t necessarily make it the world’s most popular brand. Its hordes of fanatical followers come with just as many detractors and, despite Apple Music being made available on Android devices later this year, many will be reluctant to install Apple software.
Its hordes of fanatical followers come with just as many detractors and, despite Apple Music being made available on Android devices later this year, many will be reluctant to install Apple software
Amazon and Spotify come from a far more neutral base and will not divide opinion in the same way. Despite very public criticism of the level of tax it pays in the UK, Amazon topped Havas’s Meaningful Brands index this year and is clearly held in high esteem by consumers.
The word ‘Spotify’ has become synonymous with music streaming – to the point where it’s thrown about as a verb ("just Spotify it") – which will stand the company in good stead. Its first-mover advantage means it has already accrued a huge customer base that will be reluctant to throw away custom playlists and carefully tuned settings to start again with a rival service. That inertia will almost certainly work in Spotify’s favour.
There are other players including Deezer, Rdio, Rhapsody, Google Play and Jay Z’s much-maligned Tidal, but these have failed to capture the public’s imagination in the way Spotify has, and the way Amazon and Apple hope to do.
Depth of service
Much has been made of Taylor Swift’s absence from Spotify but, after a disagreement with Apple over the amount of revenue artists would see, she has agreed to make her music available on Apple Music. It’s a blow for Amazon as its own catalogue is missing some big names from Universal Music – including Eminem and Katy Perry.
Prime Music offers access to around one million songs, which is significantly fewer than the 30 million offered by both Spotify and Apple Music
However, Disney’s hugely popular Frozen soundtrack is only available for purchase on Prime Music, rather than streaming – which may actually come as a relief, depending on how many times you’ve already been subjected to ‘Do you want to build a snowman’ (enough to know all the lyrics, if you were wondering).
Another plus is that Prime Music comes at no extra cost for members of Amazon’s £79/year ‘Prime’ service. But it doesn’t look like they’ll offer a free option or trial period beyond the month’s free Prime, that most of us have already used for next-day delivery on something that probably felt important at the time. Apple offers three months for free, while Spotify’s ad-funded model is used by two thirds of its listeners.
Most importantly, Prime Music offers access to around one million songs, which is significantly fewer than the 30 million offered by both Spotify and Apple Music. That could be a deciding factor, especially considering our survey also found the average music fan now listens to at least 10 different genres of music, thanks to the easy access digital services have provided.
Beyond Amazon MP3, which is far from the most popular digital download service, it has to be said that Amazon lacks pedigree when it comes to music. Compared to Spotify, which offers nothing but music, and Apple, which reinvented portable music with iTunes and the first iPod, it has very little skin in the game.
Spotify has made a living from music and is undoubtedly the first word that comes to mind when streaming is mentioned, but I still think Apple holds the killer hand
Spotify has made a living from music and is undoubtedly the first word that comes to mind when streaming is mentioned, but I still think Apple holds the killer hand. Over a decade of iPod sales has been followed by the acquisition of Beats Music in 2014, before the snapping up Zane Lowe from the BBC to head-up the new radio offering launched with Apple Music.
Apple Music as enjoyed a steady start and reported this week it has already hit the 10 million user mark. It’s still a long way behind Spotify though, and the vast majority of those users will still be in their free three-month trial, so it will be worth reassessing Apple’s success come the end of the year.
Realistically, consumers are not going to simultaneously use Apple Music, Spotify and Prime Music – it’s just not practical. One of the three brands needs to step up and add value in a way the others simply cannot match.
This could happen in a number of ways, including bonus content such as video interviews and exclusive tracks unavailable anywhere else, or free tickets to gigs for an artist’s top streaming fans. Apple is trying to offer something different by including a social network of sorts, but it launched a suspiciously similar service called Ping in 2010 and that fell flat on its face.
Whoever wins the streaming war, it’s certainly going to be an interesting one to watch.