Audio: Spotify tries out some new tunes
Spotify changed the music industry forever, but it still “needs to prove that it’s not a one-hit wonder,” said Andrew Nusca in Fortune. The streaming platform controls a third of the market, but it is facing intensifying competition from tech giants Apple and Amazon. And “whereas Spotify must fight for every eyeball on someone else’s device, its well-heeled rivals can activate a customer base overnight” on 1.4 billion iPhones or 100 million Echoes. Ninety-one percent of Spotify’s revenue is derived from fees from 113 million paid subscribers, and the bulk of it goes toward paying royalty-hungry “record labels from which it licenses the vast majority of its music catalog” at a reported rate of “between three-tenths and eight-tenths of a cent per stream—or up to $8,000 for a million streams.” Artists could have leverage to press for more if Apple and Amazon keep growing.
Amazon already “should have Spotify management shaking in their digital boots,” said Danny Vena in MotleyFool.com. Last week, the Seattle giant announced it is expanding the free version of Amazon Music to stream on all its devices, putting it “on a collision course with Spotify,” which has relied on its free ad-supported tier “as a funnel to attract the next generation of paying customers.” Now TikTok is also joining the streaming-music party, said Anna Nicolaou in the Financial Times. The video app “aims to differentiate itself from rivals by focusing on the user-generated content that has made TikTok one of the world’s most popular social media platforms,” particularly among kids, whereas Apple, Spotify, and Amazon all offer a similar catalog of songs.
Don’t count Spotify out, said Josh Levenson in DigitalTrends.com. Yes, Apple managed to secure more exclusives than Spotify. Spotify, however, “provides a lot of useful tools for finding new songs to suit your taste”; offers a free, ad-based tier, which Apple does not; and “has long been the industry leader in terms of sheer usability,” with a simple search engine and easy access to playlists. And Spotify has a future beyond music, said Natalie Jarvey in The Hollywood Reporter. Until recently, Spotify was “almost entirely focused on music.” But now it has “doubled down on its efforts” in podcast programming, signing deals with creators such as Jordan Peele, Mark Wahlberg, and Barack and Michelle Obama. It has also built a 154,000-square-foot campus that is “destined to become the hub of the company’s growing podcast business.” Podcasting has been around for a while, but Spotify is “the first deep-pocketed tech platform to invest in high-profile original programming.” ■