With more than 200 million users worldwide and half of them being paid customers, the world of music has been dominated by the music streaming company – Spotify. The massive popularity of the music streaming company may give you the impression that the company has successfully built a moat around its fortress. But with new players entering the arena each day, Spotify’s share is reducing day by day.
In a recent surprise, the e-commerce giant- Amazon- has quietly released an ad-based music streaming service. This new free service offers around 2 million songs. It is a surprising move, as the company already has a premium music service, namely, Amazon prime. The service comes bundled with other Amazon prime services and provides more than 50 million songs for its users. The prime service of the company does not cost much, and one can afford the services for only $7.99. The offerings of the e-commerce giant are better suited if we include the range of services that the company offers for the same price.
Currently, the ad-based service is limited only to Amazon’s Alexa enabled devices. But nothing stops the company from entering into the smartphone segment. The move emphasis on Amazon’s plan to enter into the smart home devices segment and many analysts consider the move is a bait for consumers to groove in Amazon’s music. Another segment that the company might be focusing on is the advertisement industry. The increasing dominance of smart home devices need modern methods of advertisement, and the company could be testing the waters before entering into the segment. There are multiple things that Amazon might be focusing on, or it may be just speculations.
On the other hand, Google has come up with its version of music streaming services and is betting big on content. Faster and better capabilities have led people to enjoy the best services. With just a few clicks one can easily access content and enjoy services.
Amazon is not the only thing that Spotify might be worried about. One of the world’s most valuable companies – Apple is into the music streaming service too. With its premium service, Apple music has already surpassed the number of paid subscribers of Spotify in the USA. Apple is known for its ecosystem and the way the tech giant is growing in the music industry; it is not far from capturing the entire ecosystem. But the worries of Spotify doesn’t end here, Spotify has to give a share of its earnings to the music industry to be in business. Spotify currently pays around 70 per cent of its earnings. The number is not going down shortly, but the company needs to fight and surpass its competition for healthy growth.
Spotify needs to boost up its premium sales to become profitable within a few years. It faces serious competition from the biggies like Apple, Google, and Amazon. These companies have far more deep pockets and can either buy Spotify or can let the company die a gradual death.