Welcome to the blog of Dr. Lisa Burns' Media Studies senior capstone class (Section B) at Quinnipiac University. If you're looking for the latest on media industry trends and insightful media analysis, you've come to the right place.
Tuesday, March 21, 2017
Music Blog 6, Question 1 (March 28th)
Which streaming service has the most
sustainable business model? And which one do you think is struggling? Limit:
7 responses
It’s an exciting time for the music industry as streaming culture has ushered in a new wave of revenue into what was thought to be a dead industry. Major labels are now posting higher numbers and the real winners are the streaming services that have caused this revolution. As many companies now try to get in on the profits of music streaming, two stand out as the dominant forces. Spotify and Apple Music seem to be the two best models for this type of service. First Spotify has the largest paid subscriber base out of all the music streaming services. It offers discounts to its primary audience, college level students in order to attract more users. However the thing that gives Spotify the best model is that they could soon go public as a company. Mark Mulligan of MiDia Research says, “If ¬successful, you'll see an influx of capital, new services and ¬revenue for labels, ¬publishers, artists and songwriters.” (Rys 1). Thus Spotify would effectively break through its ceiling of potential as it can now operate as a high powered IPO. This gives them the most room to find areas of profitability, which is difficult to do in the music-streaming world. Spotify’s layout does cater very well to its subscribers on an individual level and it should continue to see happy costumers. Spotify better be careful because Apple Music has been attempting to close the gap. They have posted very impressive growth numbers since their inception as a service. However the most impressive aspect is “the speed with which Apple has built the streaming service -- essentially starting from zero in June 2015.” (Halperin 1). Essentially Apple Music’s model was able to successfully transfer many of its ITunes listeners over to the new service. The model is heavily benefitting from the Apple/ ITunes brand as this is attracting new users to a safe provider. Apple also does have greater variety as opposed to Spotify as they have had certain recording companies under contract since the ITunes days. This allows for Apple Music to be trendier and more diverse with its content, two hugely important aspects for a segmented music world.
However with these two dominant models being so successful there are bound to be some high profiles ones that are struggling. I would like to focus on Sound Cloud since it is one of the more talked about alternative music streaming choices. Sound Cloud’s main purpose and reason for popularity is its ability to let aspiring musicians post their music on its servers. However this is not the most economically sound model due to the fact that there is not enough consistent revenue coming in through a subscription based payment. Sound Cloud has struggled with new initiatives such as “Sound Cloud Go, its premium product, which hasn’t exactly pulled in paying users—in fact, the company had to launch a dumbed-down, cheaper version last month.” (Warren 1). Thus Sound Cloud is on its heels trying to solve its capital issues. Many are under the impression that struggling smaller companies like a Sound Cloud will be bought by one of the bigger players in the year to come.
Work Cited
Halperin, Shirly. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 26 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 2017. Web. 26 Mar. 2017.
Warren, Christina. "Streaming Music Services, From Most Screwed to Least Screwed."Gizmodo. Gizmodo.com, 25 Mar. 2017. Web. 26 Mar. 2017.
Streaming music online has become one of the most popular ways to listen to music. Consumers have the option to subscribe to streaming platforms such as Spotify, Pandora, and Apple Music, and they also offer a free version, which includes advertisements. Pandora offers a variety of “stations” which the listener can select based on artists, songs, or genres. The free version offers a limited amount of skips, and allows the consumer to thumb up or thumb down songs they like or dislike. This feature allows Pandora to get to know the songs and styles of music the consumer prefers in order to customize their listening experience. Pandora offers a version of their service the consumer can subscribe to and pay per month. This allows the listener unlimited skips and little to no advertisements when listening. Spotify differs a little from Pandora because they have more options for the consumer to choose how and what they want to listen to. Spotify allows consumers to listen to stations and playlists that others have created and shared. This means they have the ability to search themes such as “shower” or “party” playlists as well as artists stations. Spotify also allows consumers to create their own library of songs that consumers can add and delete songs from, creating a totally customizable listening experience. The free version offers a limited amount of skips, and includes advertisements. The majority of their advertisements are for their premium option, which can be paid for monthly. The premium option allows unlimited skips, and the ability to listen to any song at any time, instead of just the “shuffle” option. Spotify seems to have the most sustainable business model because they offer more options for the consumer to choose. They have recently become, “the world’s largest subscription service with fifty million paid subscribers,” (Gensler 2017). Spotify has become one of the most popular options to listen to music, and more and more people are willing to pay for the streaming service. More and more people are subscribing to Spotify, and “it only took the streaming service five and a half months to gain ten million subscribers.” Because of the increase in technology, there has been a significant increase in people listening to music through subscription services, whether they are paying for premium features, or using the free versions. Music consumption has been increasing over the past few years, especially online “with a 76% increase in on- demand audio streams,” (Nielsen 2016). With the millennial generation being so mobile, more and more of them are choosing to subscribe to music streaming platforms to have unlimited access to music, instead of having to purchase song after song.
Even though Spotify is the most successful music streaming service at the moment, newer streaming options are proving to become competition to the beloved service. Rookies to the music streaming industry, such as Apple Music, and Amazon Prime Music, have been continuously trying to get on top. With more and more companies brining in music streaming options, such as “YouTube and Google Play, there will soon be nearly one dozen on-demand music streaming services in the United States alone,” (Rys 2017). It is obvious that not all of these companies who are offering such similar services will be able to survive in such a competitive marketplace. Pandora used to be the more popular option, but with other companies such as Spotify and Amazon offering more features and cheaper options, it seems to be struggling the most to gain and maintain subscribers. Works Cited
"2016 U.S. Music Year-End Report." 2016 U.S. Music Year-End Report. N.p., n.d. Web. 27 Mar. 2017.
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
There’s no question that the future of the music industry is streaming. So now it’s just a matter of who will dominate as a streaming service. As of right now, Spotify has the most sustainable business model. Spotify is already around 30 million subscribers ahead of its closest competitor, Apple Music. Spotify announced that they hit the 50 million paid subscriber mark on March 2nd 2017. This was their “first user number announcement since the service hit 40 million last September, which means it took the streaming service just five-and-a-half months to gain 10 million subscribers – half a month quicker from when the service went from 30 million to 40 million subscribers” (Gensler). And there’s even more room to grow. Especially considering the fact that Spotify plans to go public in September 2017. Spotify has been rumored to go public for some time, so now that the time has come, it means even more growth. MiDia Research founder Mark Mulligan noted “Spotify’s IPO will have a bigger impact at the industry level than any other company in any other major industry. If successful, you’ll see an influx of capital, new services and revenue for labels, publishers, artists and songwriters. If not, you’ll see potential investments fall through and questions about the model. Successful or not, it will shape the market” (Rys). Regardless of the success or failure of the IPO, Spotify’s fate decides the fate of a lot of other streaming services following in their path. Spotify has had considerable financial troubles, but those troubles will be handled once the company goes public. The company “lost nearly $200 million in 2015 on $2.2 billion in revenue, and the company’s $1 billion round of convertible debt, raised in March 2016, will require hefty interest payments” (Rys). Even with some financial troubles, Spotify has established itself as a clear leader in the streaming wars, at least for 2017.
On the other hand, there are some streaming services that are losing ground in the streaming era. In the streaming game, YouTube seems to be falling behind. There are other smaller companies like SoundCloud and Tidal who are also at the mercy of Spotify and Apple Music, but at this point YouTube seems to be irrelevant in the world of streaming services. As a video service, the company is still successful. However, their users are no longer utilizing them for their music needs. One executive noted “YouTube accounted for nearly 18 percent of the 6 billion streams racked up by a leading boy band in 2016, but accounted for only 5 percent of its payments for streaming” (Goodman). YouTube is not the go-to music source anymore, and it’s apparent in the numbers. Not only are consumers no longer turning to YouTube, but also artists have a love-hate relationship with the service. In terms of copyright issues “YouTube remains both a bonanza and a bone of contention” (Goodman). Although YouTube has put substantial effort into its relationship with the music industry, paying copyright holders, and hiring music executive Lyor Cohen, it has a far way to go before Spotify or Apple Music considers it a competitor.
Works Cited Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. 02 March 2017. Web. 27 March 2017. Goodman, Fred. “Can Music Exec Lyor Cohen bridge the Divide Between YouTube and the Music Industry?” Billboard. 02 March 2017. Web. 27 March 2017. Rys, Dan. “2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 January 2017. Web. 27 March 2017.
In the ever changing and evolving world, music has been changing as well. More and more streaming services such as Spotify, Apple Music, and Amazon have been changing the music game with tier online streaming services. While this is a great new way for music to start changing for some streaming services it is a new money making gold mine, but for some they are struggling to keep listeners. First let’s talk about the streaming service market. The year “2016 was the first time streaming overtook sales as the music industry’s dominant model, accounting for 51.3 percent of album consumption.” (Rys, 2017) Apple Music and Spotify both brought in 20 million subscribers combined boosting their subscriber numbers to 20 million and 40 million. (Rys, 2017) Spotify generated a complete revenue turnaround from last year’s sales last March compared to this March. This spike in revenue and subscribers clearly shows how this model and Apple Music’s model proven to be a very sustainable business model.
As of march second Spotify announced that they have 50 Million paid subscribers, announcing this in a twitter post last September they hit the 40 Million mark showing that they have a very strong growth rate and a very smart business model that is clearly working. (Gensler, 2017) Another streaming service that has proven to have a strong and successful business model is Apple Music who although does not have as much of a growth still has growth. In September they had a reported 17 million subscribers, and in March announced 20 Million subscribers. (Halperin, 2016) The goal for Apple Music now which have been announced and agreed upon by executives that they want more subscribers faster, now Apple will need to figure out how to do that, with the following and business model they have it should not be too hard for them to accomplish. (Halperin, 2016)
However, now although some of the streaming services have survived others like iHeart and Pandora have been struggling (Rys, 2017). Although they do have a strong following from the past their paid subscribers are down, although they are very similar with music streaming the reason I don’t think they are as successful is because of the way their streaming services work. Unlike Spotify and Apple Music Pandora and iHeart both work like the radio so subscribers cannot choose the songs that they want they have to wait for the song to come on kind of like the radio. This in my opinion might be what is driving subscribers more towards Apple Music and Spotify as subscribers have full access to the streaming services library and can chose which ever song they want and listen to that song whenever they want how many times in a row that they want.
The Future does not look as bright for streaming services such as Pandora and iHeart, but for Spotify, Apple Music, and Amazon the future is filled will potential and the ability for their streaming services to strive and grow even bigger.
Work Cited:
Rys , D. (2017, January 6). 2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate? Retrieved March 27, 2017, from http://www.billboard.com/articles/business/7647515/2017-streaming-music-wars-spotify-apple-music-amazon Gensler, A. (2017, March 02). Spotify Officially Hits 50 Million Paid Subscribers. Retrieved March 27, 2017, from http://www.billboard.com/biz/articles/7710015/spotify-officially-hits-50-million-paid-subscribers Halperin, S. (2016, December 6). Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!' Retrieved March 27, 2017, from http://www.billboard.com/articles/business/7604098/apple-music-20-million-subscribers-eddy-cue-zane-lowe-interview
In the discussion of streaming services such as Spotify, Apple Music, and Pandora, to name a few, it is safe to say that streaming has taken over the way we listen to music. Looking over the competitors, it is easy to find streaming services that have stood out amongst the rest. Two business models in particular that have remained at the top of the competition would have to be Spotify and Apple Music. These two models have been able to sustain their success with the addition of services that have increased their subscriber base throughout the years. As mentioned in an article discussing the success of these two services, “Streaming subscriber growth has also consistently increased ¬over the past few years; in 2016, Spotify and Apple Music together added more than 20 million ¬subscribers…” (Gensler). With this jump in subscribers, it’s easy to see just why these two services have been able to reign in the streaming industry. When it comes to naming the streaming service that has had the most sustainable business model, I would have to go with Spotify. While Apple Music has managed to have its fair share of success, Spotify has been able to claim its spot over the rest. While Spotify has lost some money in revenue, they are still able to lead in their number of subscribers. As mentioned in the article, “Spotify, the world's largest music subscription service, today announced a major milestone: 50 million paid subscribers” (Gensler). Spotify was able to gain 10 million subscribers in about five and a half months, showing how they have been able to claim their spot at the top. Spotify’s success is due to the variety in options they offer. Spotify has spotify premium which allows subscribers access to any song, album, playlist they want, the option to play any song, the ability to create playlists, and countless other options. They also have a discount for students and the option to use the service for free. Not only does Spotify have these options, but they have plans for the future that may boost them up even further. As mentioned in the article, “’Spotify's IPO will have a bigger impact at the ¬industry level than any other -company in any other major industry" (Rys). With new plans under way, Spotify is set to remain at the top and will hopefully continue to be a top competitor amongst the streaming services. One service in particular that seems to be struggling as of lately would be Pandora. Pandora is a streaming service that has been living in the shadows of its competitors. The service doesn’t have any features that would help them stand out amongst the rest. They don’t seem to have anything that is worth being excited over for right now. Even though they plan on offering on-demand services, they do not expect to see that significant of a jump in monthly listeners. As stated in an article discussing Pandora as a service, “McAndrews said the company doesn't expect "significant growth" in monthly listeners this year due to competitive services and their spending to acquire customers” (Peoples). The competition is just too much right now for Pandora to handle and it shows in the lack of people flocking to the service.
Works Cited Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. 02 Mar. 2017. Web. 27 Mar. 2017. Peoples, Glenn. “Pandora Brought In $1.16 Billion Last Year, But New Listeners Seem Hard to Find.” Billboard. 11 Feb. 2016. Web. 27 Mar. 2017. Rys, Dan. “ 2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 Jan. 2017. Web. 27 Mar. 2017.
Streaming services are the future and most important aspect of the music industry. Having access to a wide arrange of music for the fraction of what it would cost to buy every album you listen to in a year, has changed both the industry and also the music listeners experience. There are some questions to how it will survive especially with Spotify losing nearly $200 million in revenue in 2015 (Rys). If each of the top streaming services offers the same thing, what will be the deciding factor for people?
The platform that is thriving the most of the streaming services is Apple Music. With their exclusive content, like early release of albums and Beats Radio, they have the most enticing offers when it comes to what to pick as a music streaming service. One of these enticing offers came from the new Frank Ocean Beats Radio show, “The Friday night broadcast, the second episode of Frank’s program, was itself an event for die-hard Frank fans who spent years refreshing the singer’s Tumblr page for glimmers of new music,” (Ihaza). Apple Music offers more than the other streaming services because of the Radio Show and it costs as much as the other competitors. Apple Music also has an exclusive deal with Drake where Apple Music users were the first ones able to download the new playlist More Life. I would say a close second is Spotify because of the loyalty they have by being the first to do the streaming service. They created this model, but Apple Music is starting to perfect it.
There are a few streaming services that are struggling while others like Apple Music are thriving. Pandora was another company early to the streaming game, but their model has started to fall to the wayside. They entered the game with a radio platform that would play free music for listeners, with ads every so often. As services like Spotify and Apple Music came around offering more freedom, this was much more enticing. It was announced this month that Pandora would offer a streaming service similar to the freedom model to keep up with those services. Pandora does offer something that the others do not, “Unsurprisingly, [Pandora Premium] also puts to use the trove of data that it has collected through the Music Genome Project, which powers its popular online radio service, so you can quickly create a new playlist with a single song -- that is, if mixtape-making isn't your thing,” (Billboard Staff). This may bring back those early Pandora users because Pandora did have a unique way to know what the listeners wanted to hear. Spotify and Apple Music create weekly playlists for its users one of music they already love and another of new music they may like. Pandora already has this knowledge, and I believe they can turn things around with this knowledge. But Apple Music and Spotify may be too far out in front to even be caught.
Billboard Staff. "Enter Pandora: New On-Demand Streaming Service Launches This Week." Billboard. Billboard Music, 13 Mar. 2017. Web. 28 Mar. 2017.
Ihaza, Jeff. "The playlist is the new album." The Outline. The Outline, 13 Mar. 2017. Web. 28 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. Billboard Music, 6 Jan. 2017. Web. 28 Mar. 2017.
The 80s had the Walkman, the 90s thrived with CD players and the early 2000s saw the very first iPod. Here in 2017 streaming music apps are really our main resource for music. Unless you are a collector, the chance of you purchasing a physical album is pretty slim. I can’t even think of one person in my life that is not subscribed to Spotify, Pandora, Apple Music or Amazon Music. In 2016 alone, both Spotify and Apple Music added 20 million subscribers to their count. These numbers shouldn’t come as much surprise to anyone. Streaming music has become the most convenient and rather inexpensive way to listen to your favorite artists. This topic becomes as competitive as the SVOD services because there is really no reason to subscribe to more than one music streaming service. If you are a loyal subscriber to Spotify, then why would you need to also subscribe to Pandora? The only explanation for some of these services is the artists featured on them. For example, if you are a crazy Taylor Swift fan then odds are you are not going to only subscribe to Spotify. These streaming services survive because they each have something different to offer. Spotify, which is the leading service for streaming music with over 50 million subscribers, has its flaws, however I believe has the most sustainable service (Gensler, 2017). I subscribed to Spotify Premium in 2014 and I definitely would say it is worth the face value. I would be willing to spend the $9.99 per month, but they even offer the student discount price of $4.99 per month. I can’t think of any reason that a student would not be willing to spend $4.99 a month to stream their favorite unlimited music. Ever since these streaming apps came into play, IPods have lost what makes them special. Of course this is not a terrible set back for Apple as a company, as we are typically downloading these streaming apps to our apple products. Apple Music is also seeing higher counts in subscribers. With that being said, it still isn’t close to reaching that of Spotify. I think out of all of these great services, Pandora seems to have the least sustainable service. Their option to subscribe to Pandora One means no ads, but their format can be hard to sell to people. Choosing a station, opposed to specific songs or albums can produce music choices that someone might not prefer. I think that Spotify hast the best format by allowing subscribers to create and share their own playlists with no limitations.
Works Cited
Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. 02 Mar. 2017. Web. 27 Mar. 2017.
Peoples, Glenn. “Pandora Brought In $1.16 Billion Last Year, But New Listeners Seem Hard to Find.” Billboard. 11 Feb. 2016. Web. 27 Mar. 2017.
Rys, Dan. “ 2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 Jan. 2017. Web. 27 Mar. 2017.
Because music-streaming services are so popular today, there are many successful competitors. The most popular streaming services in the music industry are definitely Spotify, Apple Music, Amazon, and Pandora. As the streaming industry is expanding and becoming more evolved within the music industry, many of these services are using this hype to see which business models work best for them and what will bring in the most revenue to help them succeed.
I believe the streaming service that has the most sustainable business model thus far is definitely Spotify. It has just recently reached 50 million paying subscribers, which surpasses their competitors by a very large margin. “This is Spotify's first user number announcement since the service hit 40 million last September, which means it took the streaming service just five-and-a-half months to gain 10 million subscribers -- half a month quicker from when the service went from 30 million to 40 million subscribers” (Gensler 2017). There is no doubt that Spotify’s business model is the best out of all the other services based on numbers alone.
Personally, I have experience with Apple Music, Pandora, and Spotify. Before the streaming services really became the only way to listen to music I would buy it off of iTunes and occasionally listen to Pandora. When I learned about Spotify I was very impressed by all it had to offer and gravitated to using it for free to paying for a subscription. “That means Spotify -- which is planning to go public in the second half of 2017, according to Bloomberg BusinessWeek -- is adding subscribers faster than ever. And it increasingly exposes users to new music, provides marketing for artists and helps sell concert tickets” (Levine 2016). Spotify offers so much to paying subscribers that the cost of a subscription is definitely proportionate to what users get out of it.
Apple Music I believe would be the closest competitor to Spotify because so many people have Apple products, they continue to follow the trend of music streaming with a service they are familiar with. “The speed with which Apple has built the streaming service -- essentially starting from zero in June 2015 -- may be even more impressive than the latest numbers, which still trail competitor Spotify by 20 million” (Halperin 2017). Apple Music still has a lot of work to do in terms of catching up to Spotify but I think it’s business model is fairly sustainable at the moment. Apple Music, Pandora, and Amazon could definitely use improvement to rise above all that Spotify has to offer.
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. Billboard.com, 02 Mar. 2017. Web.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. Billboard.com, 6 Dec. 2016. Web. 28 Mar. 2017.
Levine, Robert. "'Bad for the Industry': Spotify's Artist Whisperer Troy Carter Slams Exclusives, Updates Company's Subscriber Total." Billboard. Billboard.com, 25 Aug. 2016. Web.
Streaming music, although relatively new to the market, has already developed numerous competitors attempting to give their audiences unique experiences. The streaming services that are most commonly know are that of Spotify, which launched in 2008, and Apple Music, which launched in 2015. Both services managed to stay above the pack with the other platforms such as iHeartRadio, YouTube, Pandora and Amazon, by obtaining the largest amount of subscribers. “Spotify has a lead in streaming, with more than 40 millions paid subscribers worldwide, while Apple Music has 17 million” (Levine). Although, subscribers isn’t the only thing that makes these companies great. By giving their audiences a new experience and offering them certain albums and music that they cannot get anywhere else. Rys mentions this in his article where he states, “In order to survive, streamers will need to offer more, or different, value than the market leaders already have” (Rys). In this perspective, Apple Music has been giving their subscribers albums such as Frank Ocean’s Blonde, Drake’s two new albums Views and Live More, the company is able to maintain that reputation and keep up with Spotify regardless of only being a few years old. It is difficult to choose between Spotify and Apple Music for which has the most sustainable business model as both are succeeding in different ways. Apple Music is continuing to grow rapidly, as Halperin states, “the company announces that 60 percent of customers using Apple Music have bought content from the iTune Music Store in the last 12 months” (Halperin). This kind of increase in subscribers shows that the company is ready to keep moving forward. In saying that, Rys also explains that “several analysts agree that the streaming landscape in 2017 will be dominated by Spotify” (Rys). Being around for so long, the company has developed a loyal fanbase and continues to hold the ambition to get better. The company that seems to be struggling the most, or lacks a sustainable business model would be that of SoundCloud and Tidal. SoundCloud is a company that allows for artists to post their own songs and explore different musical interests. Although a very creative idea, and it does attract a large number of subscribers, it is a business model that benefit more from being bought by a large company. YouTube has Google in order to support it, therefore is SoundCloud had a company like that to help guide it, it has a lot of potential.
Works Cited
Rys, Dan. “2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 January 2017. Web. 27 March 2017.
Halperin, S. (2016, December 6). Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!' Retrieved March 27, 2017
Levine, Robert. “Is the Record Business Really Back? How Streaming Is (And Isn't) Turning a Profit” Billboard. Web. 27 March 2017.
As Netflix is the king of the video streaming industry, Spotify is the king of the music streaming industry. They’re both the largest service in their respective fields. Both companies have revolutionized their respective industries. And both have the largest subscriber base of their respective industries. According to billboard, has over 89 million users, and over 50 million paid subscribers by the beginning of this month. Which is up 10 million from September of 2016. What is even more telling of its success is Spotify’s subscriber growth “…it took the streaming service just five-and-a-half months to gain 10 million subscribers -- half a month quicker from when the service went from 30 million to 40 million subscribers.” (Gensler) As of right now, no other streaming service can touch Spotify’s success. While they are still not where they want to be financially, Spotify is the key reason for the music industries rebirth. Due to their extensive subscriber base, both paid subscription, and people using their “free” service funded by advertisements, Spotify is the biggest contributor to the record companies. According to billboard, Spotify pays the record industry 83% of their revenue “In its Global Music Report, the IFPI said that €2.89 billion (or $3 billion) was paid to the record industry from both subscription and ad-supported services globally…Spotify was responsible for 56 percent of the total revenues generated by streaming, worldwide.”(Flanagan) They have been the biggest driver in the switch to streaming music, as, according to Nielson, 2016 proved that steaming music has overtaken physical sales for the very first time. Additionally, the music industry is bouncing back “Streaming led the U.S. music industry to its first back-to-back yearly growth this millennium and in the first half of 2016 was the single ¬highest source of revenue in the U.S. recorded-music industry, ¬bringing in $1.61 billion. All three major labels -- Universal, Sony and Warner -- posted streaming-driven double-digit percent boosts in earnings throughout the past year.” (Gensler) This change could not have been done without Spotify’s success. Spotify has leapfrogged iTunes and digital downloading to become the best option for both users and record label executives alike. Despite the fact that Spotify is ahead by far in the music streaming industry’s race for dominance, streaming services have yet to offer a business model that is completely sustainable. With new competition coming in from Apple, Amazon, IHeartRadio, and Pandora, its tough to see how Spotify, its competitors and the industry will pan out. Apples, svp of internet software and products says there is a positive future for the industry with the coming competition. “"If they drive more people to pay and buy music then that's a good thing for all of us," (Halperin) However, only Spotify seems to be in a good position at the moment. They are still not making profits after years of streaming music. Just recently they have slowed down losses and increased revenue dramatically but it is still not yet enough. It is rumored that they will set their IPO later this year which could swing things around for the company. But still the fact that the most successful company in the industry is still failing to profit does not bode well for the industry. All in all, Spotify has the best business model so far, but the rest are severely slacking and I don’t see how they will be able to stay afloat. Works cited Flanagan, Andrew. "Spotify's Financials: Losses Slow, Revenues Jump, Company Generates Over Half of All Streaming Royalties." Billboard. N.p., 24 May 2016. Web. 28 Mar. 2017. . Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 28 Mar. 2017. . Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., n.d. Web. 28 Mar. 2017. .
In recent years the music industry has evolved with a couple of companies that come right to mind when you think of sustainable business models. First you have to look at Spotify, which has become extremely popular. Their business model of charging a small monthly fee (even smaller fee for students) has been a great success. People love the different features it offers such as following friends and their playlists, being able to see music trending in different categories and overall they have a huge database of music content. Apple Music is also another major company that is on the same level of Spotify in terms of leading the music industry in terms of success, users, and subscriptions. Another prominent company that deals with subscriptions in the music industry is Pandora. Although Pandora differs from Apple Music and Spotify, its model works. Pandora places together playlists depending on a musical topic, mood, or artist and the playlist always seems to have the type of music you're looking for and hoping to hear at that time. They offer a subscription or you just have to listen to ads which works great for whatever preference you may have. Even with these three being the major music companies for streaming over the last decade or so, Amazon has also made huge improvements and could be argued to be included in the same sentence as Spotify, Apple, and Pandora when it comes to streaming music and sustainable business models.
Apple is evident of this streaming service dominance and their early statistics and success prove that their business model is sustainable. In the 18 months since apple launched its subscription model it was up to 20 million paid subscribers. Of those 20 million users, 60% had not bought music from apple over the last 12 months (Halperin). These statistics argue that apple brought in around 12 million new customers in the 12 month span by releasing their streaming subscription. This is a huge number, with 60% of subscribers being categorized as “new customers” and really makes it evident that apples streaming service is very sustainable.
On the other hand, Spotify is also experiencing great success as it is the biggest current streaming service in the world today with 50 million paid subscribers as of 2017 (Gensler). These are huge numbers and make an argument that Spotify has the most sustainable model with other companies like Apple trying to catch up.
A testament to all the major streaming services and their potential to have successful business models is the fact that they are taking over the market share. In 2016 streaming services took over as the industry's dominant model, accounting for 51.3% of album consumption (Rys). This statistic offers a lot of hope for future dominance in the industry for music companies like Spotify, Apple, Amazon, and Pandora.
Works Cited
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 2 Mar. 2017. Web. 27 Mar. 2017.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 28 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 28 Mar. 2017.
It’s an exciting time for the music industry as streaming culture has ushered in a new wave of revenue into what was thought to be a dead industry. Major labels are now posting higher numbers and the real winners are the streaming services that have caused this revolution. As many companies now try to get in on the profits of music streaming, two stand out as the dominant forces. Spotify and Apple Music seem to be the two best models for this type of service. First Spotify has the largest paid subscriber base out of all the music streaming services. It offers discounts to its primary audience, college level students in order to attract more users. However the thing that gives Spotify the best model is that they could soon go public as a company. Mark Mulligan of MiDia Research says, “If ¬successful, you'll see an influx of capital, new services and ¬revenue for labels, ¬publishers, artists and songwriters.” (Rys 1). Thus Spotify would effectively break through its ceiling of potential as it can now operate as a high powered IPO. This gives them the most room to find areas of profitability, which is difficult to do in the music-streaming world. Spotify’s layout does cater very well to its subscribers on an individual level and it should continue to see happy costumers.
ReplyDeleteSpotify better be careful because Apple Music has been attempting to close the gap. They have posted very impressive growth numbers since their inception as a service. However the most impressive aspect is “the speed with which Apple has built the streaming service -- essentially starting from zero in June 2015.” (Halperin 1). Essentially Apple Music’s model was able to successfully transfer many of its ITunes listeners over to the new service. The model is heavily benefitting from the Apple/ ITunes brand as this is attracting new users to a safe provider. Apple also does have greater variety as opposed to Spotify as they have had certain recording companies under contract since the ITunes days. This allows for Apple Music to be trendier and more diverse with its content, two hugely important aspects for a segmented music world.
However with these two dominant models being so successful there are bound to be some high profiles ones that are struggling. I would like to focus on Sound Cloud since it is one of the more talked about alternative music streaming choices. Sound Cloud’s main purpose and reason for popularity is its ability to let aspiring musicians post their music on its servers. However this is not the most economically sound model due to the fact that there is not enough consistent revenue coming in through a subscription based payment. Sound Cloud has struggled with new initiatives such as “Sound Cloud Go, its premium product, which hasn’t exactly pulled in paying users—in fact, the company had to launch a dumbed-down, cheaper version last month.” (Warren 1). Thus Sound Cloud is on its heels trying to solve its capital issues. Many are under the impression that struggling smaller companies like a Sound Cloud will be bought by one of the bigger players in the year to come.
ReplyDeleteWork Cited
Halperin, Shirly. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 26 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 2017. Web. 26 Mar. 2017.
Warren, Christina. "Streaming Music Services, From Most Screwed to Least Screwed."Gizmodo. Gizmodo.com, 25 Mar. 2017. Web. 26 Mar. 2017.
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ReplyDeleteStreaming music online has become one of the most popular ways to listen to music. Consumers have the option to subscribe to streaming platforms such as Spotify, Pandora, and Apple Music, and they also offer a free version, which includes advertisements. Pandora offers a variety of “stations” which the listener can select based on artists, songs, or genres. The free version offers a limited amount of skips, and allows the consumer to thumb up or thumb down songs they like or dislike. This feature allows Pandora to get to know the songs and styles of music the consumer prefers in order to customize their listening experience. Pandora offers a version of their service the consumer can subscribe to and pay per month. This allows the listener unlimited skips and little to no advertisements when listening.
ReplyDeleteSpotify differs a little from Pandora because they have more options for the consumer to choose how and what they want to listen to. Spotify allows consumers to listen to stations and playlists that others have created and shared. This means they have the ability to search themes such as “shower” or “party” playlists as well as artists stations. Spotify also allows consumers to create their own library of songs that consumers can add and delete songs from, creating a totally customizable listening experience. The free version offers a limited amount of skips, and includes advertisements. The majority of their advertisements are for their premium option, which can be paid for monthly. The premium option allows unlimited skips, and the ability to listen to any song at any time, instead of just the “shuffle” option.
Spotify seems to have the most sustainable business model because they offer more options for the consumer to choose. They have recently become, “the world’s largest subscription service with fifty million paid subscribers,” (Gensler 2017). Spotify has become one of the most popular options to listen to music, and more and more people are willing to pay for the streaming service. More and more people are subscribing to Spotify, and “it only took the streaming service five and a half months to gain ten million subscribers.” Because of the increase in technology, there has been a significant increase in people listening to music through subscription services, whether they are paying for premium features, or using the free versions. Music consumption has been increasing over the past few years, especially online “with a 76% increase in on- demand audio streams,” (Nielsen 2016). With the millennial generation being so mobile, more and more of them are choosing to subscribe to music streaming platforms to have unlimited access to music, instead of having to purchase song after song.
Even though Spotify is the most successful music streaming service at the moment, newer streaming options are proving to become competition to the beloved service. Rookies to the music streaming industry, such as Apple Music, and Amazon Prime Music, have been continuously trying to get on top. With more and more companies brining in music streaming options, such as “YouTube and Google Play, there will soon be nearly one dozen on-demand music streaming services in the United States alone,” (Rys 2017). It is obvious that not all of these companies who are offering such similar services will be able to survive in such a competitive marketplace. Pandora used to be the more popular option, but with other companies such as Spotify and Amazon offering more features and cheaper options, it seems to be struggling the most to gain and maintain subscribers.
DeleteWorks Cited
"2016 U.S. Music Year-End Report." 2016 U.S. Music Year-End Report. N.p., n.d. Web. 27 Mar. 2017.
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 27 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 27 Mar. 2017.
Angie King
ReplyDeleteThere’s no question that the future of the music industry is streaming. So now it’s just a matter of who will dominate as a streaming service. As of right now, Spotify has the most sustainable business model. Spotify is already around 30 million subscribers ahead of its closest competitor, Apple Music. Spotify announced that they hit the 50 million paid subscriber mark on March 2nd 2017. This was their “first user number announcement since the service hit 40 million last September, which means it took the streaming service just five-and-a-half months to gain 10 million subscribers – half a month quicker from when the service went from 30 million to 40 million subscribers” (Gensler). And there’s even more room to grow. Especially considering the fact that Spotify plans to go public in September 2017. Spotify has been rumored to go public for some time, so now that the time has come, it means even more growth. MiDia Research founder Mark Mulligan noted “Spotify’s IPO will have a bigger impact at the industry level than any other company in any other major industry. If successful, you’ll see an influx of capital, new services and revenue for labels, publishers, artists and songwriters. If not, you’ll see potential investments fall through and questions about the model. Successful or not, it will shape the market” (Rys). Regardless of the success or failure of the IPO, Spotify’s fate decides the fate of a lot of other streaming services following in their path. Spotify has had considerable financial troubles, but those troubles will be handled once the company goes public. The company “lost nearly $200 million in 2015 on $2.2 billion in revenue, and the company’s $1 billion round of convertible debt, raised in March 2016, will require hefty interest payments” (Rys). Even with some financial troubles, Spotify has established itself as a clear leader in the streaming wars, at least for 2017.
On the other hand, there are some streaming services that are losing ground in the streaming era. In the streaming game, YouTube seems to be falling behind. There are other smaller companies like SoundCloud and Tidal who are also at the mercy of Spotify and Apple Music, but at this point YouTube seems to be irrelevant in the world of streaming services. As a video service, the company is still successful. However, their users are no longer utilizing them for their music needs. One executive noted “YouTube accounted for nearly 18 percent of the 6 billion streams racked up by a leading boy band in 2016, but accounted for only 5 percent of its payments for streaming” (Goodman). YouTube is not the go-to music source anymore, and it’s apparent in the numbers. Not only are consumers no longer turning to YouTube, but also artists have a love-hate relationship with the service. In terms of copyright issues “YouTube remains both a bonanza and a bone of contention” (Goodman). Although YouTube has put substantial effort into its relationship with the music industry, paying copyright holders, and hiring music executive Lyor Cohen, it has a far way to go before Spotify or Apple Music considers it a competitor.
Works Cited
Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. 02 March 2017. Web. 27 March 2017.
Goodman, Fred. “Can Music Exec Lyor Cohen bridge the Divide Between YouTube and the Music Industry?” Billboard. 02 March 2017. Web. 27 March 2017.
Rys, Dan. “2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 January 2017. Web. 27 March 2017.
In the ever changing and evolving world, music has been changing as well. More and more streaming services such as Spotify, Apple Music, and Amazon have been changing the music game with tier online streaming services. While this is a great new way for music to start changing for some streaming services it is a new money making gold mine, but for some they are struggling to keep listeners. First let’s talk about the streaming service market. The year “2016 was the first time streaming overtook sales as the music industry’s dominant model, accounting for 51.3 percent of album consumption.” (Rys, 2017) Apple Music and Spotify both brought in 20 million subscribers combined boosting their subscriber numbers to 20 million and 40 million. (Rys, 2017) Spotify generated a complete revenue turnaround from last year’s sales last March compared to this March. This spike in revenue and subscribers clearly shows how this model and Apple Music’s model proven to be a very sustainable business model.
ReplyDeleteAs of march second Spotify announced that they have 50 Million paid subscribers, announcing this in a twitter post last September they hit the 40 Million mark showing that they have a very strong growth rate and a very smart business model that is clearly working. (Gensler, 2017) Another streaming service that has proven to have a strong and successful business model is Apple Music who although does not have as much of a growth still has growth. In September they had a reported 17 million subscribers, and in March announced 20 Million subscribers. (Halperin, 2016) The goal for Apple Music now which have been announced and agreed upon by executives that they want more subscribers faster, now Apple will need to figure out how to do that, with the following and business model they have it should not be too hard for them to accomplish. (Halperin, 2016)
However, now although some of the streaming services have survived others like iHeart and Pandora have been struggling (Rys, 2017). Although they do have a strong following from the past their paid subscribers are down, although they are very similar with music streaming the reason I don’t think they are as successful is because of the way their streaming services work. Unlike Spotify and Apple Music Pandora and iHeart both work like the radio so subscribers cannot choose the songs that they want they have to wait for the song to come on kind of like the radio. This in my opinion might be what is driving subscribers more towards Apple Music and Spotify as subscribers have full access to the streaming services library and can chose which ever song they want and listen to that song whenever they want how many times in a row that they want.
DeleteThe Future does not look as bright for streaming services such as Pandora and iHeart, but for Spotify, Apple Music, and Amazon the future is filled will potential and the ability for their streaming services to strive and grow even bigger.
Work Cited:
Rys , D. (2017, January 6). 2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate? Retrieved March 27, 2017, from http://www.billboard.com/articles/business/7647515/2017-streaming-music-wars-spotify-apple-music-amazon
Gensler, A. (2017, March 02). Spotify Officially Hits 50 Million Paid Subscribers. Retrieved March 27, 2017, from http://www.billboard.com/biz/articles/7710015/spotify-officially-hits-50-million-paid-subscribers
Halperin, S. (2016, December 6). Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!' Retrieved March 27, 2017, from http://www.billboard.com/articles/business/7604098/apple-music-20-million-subscribers-eddy-cue-zane-lowe-interview
In the discussion of streaming services such as Spotify, Apple Music, and Pandora, to name a few, it is safe to say that streaming has taken over the way we listen to music. Looking over the competitors, it is easy to find streaming services that have stood out amongst the rest. Two business models in particular that have remained at the top of the competition would have to be Spotify and Apple Music. These two models have been able to sustain their success with the addition of services that have increased their subscriber base throughout the years. As mentioned in an article discussing the success of these two services, “Streaming subscriber growth has also consistently increased ¬over the past few years; in 2016, Spotify and Apple Music together added more than 20 million ¬subscribers…” (Gensler). With this jump in subscribers, it’s easy to see just why these two services have been able to reign in the streaming industry.
ReplyDeleteWhen it comes to naming the streaming service that has had the most sustainable business model, I would have to go with Spotify. While Apple Music has managed to have its fair share of success, Spotify has been able to claim its spot over the rest. While Spotify has lost some money in revenue, they are still able to lead in their number of subscribers. As mentioned in the article, “Spotify, the world's largest music subscription service, today announced a major milestone: 50 million paid subscribers” (Gensler). Spotify was able to gain 10 million subscribers in about five and a half months, showing how they have been able to claim their spot at the top. Spotify’s success is due to the variety in options they offer. Spotify has spotify premium which allows subscribers access to any song, album, playlist they want, the option to play any song, the ability to create playlists, and countless other options. They also have a discount for students and the option to use the service for free. Not only does Spotify have these options, but they have plans for the future that may boost them up even further. As mentioned in the article, “’Spotify's IPO will have a bigger impact at the ¬industry level than any other -company in any other major industry" (Rys). With new plans under way, Spotify is set to remain at the top and will hopefully continue to be a top competitor amongst the streaming services.
One service in particular that seems to be struggling as of lately would be Pandora. Pandora is a streaming service that has been living in the shadows of its competitors. The service doesn’t have any features that would help them stand out amongst the rest. They don’t seem to have anything that is worth being excited over for right now. Even though they plan on offering on-demand services, they do not expect to see that significant of a jump in monthly listeners. As stated in an article discussing Pandora as a service, “McAndrews said the company doesn't expect "significant growth" in monthly listeners this year due to competitive services and their spending to acquire customers” (Peoples). The competition is just too much right now for Pandora to handle and it shows in the lack of people flocking to the service.
Works Cited
Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. 02 Mar. 2017. Web. 27 Mar. 2017.
Peoples, Glenn. “Pandora Brought In $1.16 Billion Last Year, But New Listeners Seem Hard to Find.” Billboard. 11 Feb. 2016. Web. 27 Mar. 2017.
Rys, Dan. “ 2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 Jan. 2017. Web. 27 Mar. 2017.
Streaming services are the future and most important aspect of the music industry. Having access to a wide arrange of music for the fraction of what it would cost to buy every album you listen to in a year, has changed both the industry and also the music listeners experience. There are some questions to how it will survive especially with Spotify losing nearly $200 million in revenue in 2015 (Rys). If each of the top streaming services offers the same thing, what will be the deciding factor for people?
ReplyDeleteThe platform that is thriving the most of the streaming services is Apple Music. With their exclusive content, like early release of albums and Beats Radio, they have the most enticing offers when it comes to what to pick as a music streaming service. One of these enticing offers came from the new Frank Ocean Beats Radio show, “The Friday night broadcast, the second episode of Frank’s program, was itself an event for die-hard Frank fans who spent years refreshing the singer’s Tumblr page for glimmers of new music,” (Ihaza). Apple Music offers more than the other streaming services because of the Radio Show and it costs as much as the other competitors. Apple Music also has an exclusive deal with Drake where Apple Music users were the first ones able to download the new playlist More Life. I would say a close second is Spotify because of the loyalty they have by being the first to do the streaming service. They created this model, but Apple Music is starting to perfect it.
There are a few streaming services that are struggling while others like Apple Music are thriving. Pandora was another company early to the streaming game, but their model has started to fall to the wayside. They entered the game with a radio platform that would play free music for listeners, with ads every so often. As services like Spotify and Apple Music came around offering more freedom, this was much more enticing. It was announced this month that Pandora would offer a streaming service similar to the freedom model to keep up with those services. Pandora does offer something that the others do not, “Unsurprisingly, [Pandora Premium] also puts to use the trove of data that it has collected through the Music Genome Project, which powers its popular online radio service, so you can quickly create a new playlist with a single song -- that is, if mixtape-making isn't your thing,” (Billboard Staff). This may bring back those early Pandora users because Pandora did have a unique way to know what the listeners wanted to hear. Spotify and Apple Music create weekly playlists for its users one of music they already love and another of new music they may like. Pandora already has this knowledge, and I believe they can turn things around with this knowledge. But Apple Music and Spotify may be too far out in front to even be caught.
Billboard Staff. "Enter Pandora: New On-Demand Streaming Service Launches This Week." Billboard. Billboard Music, 13 Mar. 2017. Web. 28 Mar. 2017.
Ihaza, Jeff. "The playlist is the new album." The Outline. The Outline, 13 Mar. 2017. Web. 28 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. Billboard Music, 6 Jan. 2017. Web. 28 Mar. 2017.
ReplyDeleteThe 80s had the Walkman, the 90s thrived with CD players and the early 2000s saw the very first iPod. Here in 2017 streaming music apps are really our main resource for music. Unless you are a collector, the chance of you purchasing a physical album is pretty slim. I can’t even think of one person in my life that is not subscribed to Spotify, Pandora, Apple Music or Amazon Music. In 2016 alone, both Spotify and Apple Music added 20 million subscribers to their count. These numbers shouldn’t come as much surprise to anyone. Streaming music has become the most convenient and rather inexpensive way to listen to your favorite artists. This topic becomes as competitive as the SVOD services because there is really no reason to subscribe to more than one music streaming service. If you are a loyal subscriber to Spotify, then why would you need to also subscribe to Pandora? The only explanation for some of these services is the artists featured on them. For example, if you are a crazy Taylor Swift fan then odds are you are not going to only subscribe to Spotify. These streaming services survive because they each have something different to offer. Spotify, which is the leading service for streaming music with over 50 million subscribers, has its flaws, however I believe has the most sustainable service (Gensler, 2017). I subscribed to Spotify Premium in 2014 and I definitely would say it is worth the face value. I would be willing to spend the $9.99 per month, but they even offer the student discount price of $4.99 per month. I can’t think of any reason that a student would not be willing to spend $4.99 a month to stream their favorite unlimited music. Ever since these streaming apps came into play, IPods have lost what makes them special. Of course this is not a terrible set back for Apple as a company, as we are typically downloading these streaming apps to our apple products. Apple Music is also seeing higher counts in subscribers. With that being said, it still isn’t close to reaching that of Spotify. I think out of all of these great services, Pandora seems to have the least sustainable service. Their option to subscribe to Pandora One means no ads, but their format can be hard to sell to people. Choosing a station, opposed to specific songs or albums can produce music choices that someone might not prefer. I think that Spotify hast the best format by allowing subscribers to create and share their own playlists with no limitations.
Works Cited
Gensler, Andy. “Spotify Officially Hits 50 Million Paid Subscribers.” Billboard. 02 Mar. 2017. Web. 27 Mar. 2017.
Peoples, Glenn. “Pandora Brought In $1.16 Billion Last Year, But New Listeners Seem Hard to Find.” Billboard. 11 Feb. 2016. Web. 27 Mar. 2017.
Rys, Dan. “ 2017 Streaming Wars – Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 Jan. 2017. Web. 27 Mar. 2017.
Because music-streaming services are so popular today, there are many successful competitors. The most popular streaming services in the music industry are definitely Spotify, Apple Music, Amazon, and Pandora. As the streaming industry is expanding and becoming more evolved within the music industry, many of these services are using this hype to see which business models work best for them and what will bring in the most revenue to help them succeed.
ReplyDeleteI believe the streaming service that has the most sustainable business model thus far is definitely Spotify. It has just recently reached 50 million paying subscribers, which surpasses their competitors by a very large margin. “This is Spotify's first user number announcement since the service hit 40 million last September, which means it took the streaming service just five-and-a-half months to gain 10 million subscribers -- half a month quicker from when the service went from 30 million to 40 million subscribers” (Gensler 2017). There is no doubt that Spotify’s business model is the best out of all the other services based on numbers alone.
Personally, I have experience with Apple Music, Pandora, and Spotify. Before the streaming services really became the only way to listen to music I would buy it off of iTunes and occasionally listen to Pandora. When I learned about Spotify I was very impressed by all it had to offer and gravitated to using it for free to paying for a subscription. “That means Spotify -- which is planning to go public in the second half of 2017, according to Bloomberg BusinessWeek -- is adding subscribers faster than ever. And it increasingly exposes users to new music, provides marketing for artists and helps sell concert tickets” (Levine 2016). Spotify offers so much to paying subscribers that the cost of a subscription is definitely proportionate to what users get out of it.
Apple Music I believe would be the closest competitor to Spotify because so many people have Apple products, they continue to follow the trend of music streaming with a service they are familiar with. “The speed with which Apple has built the streaming service -- essentially starting from zero in June 2015 -- may be even more impressive than the latest numbers, which still trail competitor Spotify by 20 million” (Halperin 2017). Apple Music still has a lot of work to do in terms of catching up to Spotify but I think it’s business model is fairly sustainable at the moment. Apple Music, Pandora, and Amazon could definitely use improvement to rise above all that Spotify has to offer.
DeleteGensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. Billboard.com, 02 Mar. 2017. Web.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. Billboard.com, 6 Dec. 2016. Web. 28 Mar. 2017.
Levine, Robert. "'Bad for the Industry': Spotify's Artist Whisperer Troy Carter Slams Exclusives, Updates Company's Subscriber Total." Billboard. Billboard.com, 25 Aug. 2016. Web.
Streaming music, although relatively new to the market, has already developed numerous competitors attempting to give their audiences unique experiences. The streaming services that are most commonly know are that of Spotify, which launched in 2008, and Apple Music, which launched in 2015. Both services managed to stay above the pack with the other platforms such as iHeartRadio, YouTube, Pandora and Amazon, by obtaining the largest amount of subscribers. “Spotify has a lead in streaming, with more than 40 millions paid subscribers worldwide, while Apple Music has 17 million” (Levine). Although, subscribers isn’t the only thing that makes these companies great. By giving their audiences a new experience and offering them certain albums and music that they cannot get anywhere else. Rys mentions this in his article where he states, “In order to survive, streamers will need to offer more, or different, value than the market leaders already have” (Rys). In this perspective, Apple Music has been giving their subscribers albums such as Frank Ocean’s Blonde, Drake’s two new albums Views and Live More, the company is able to maintain that reputation and keep up with Spotify regardless of only being a few years old. It is difficult to choose between Spotify and Apple Music for which has the most sustainable business model as both are succeeding in different ways. Apple Music is continuing to grow rapidly, as Halperin states, “the company announces that 60 percent of customers using Apple Music have bought content from the iTune Music Store in the last 12 months” (Halperin). This kind of increase in subscribers shows that the company is ready to keep moving forward. In saying that, Rys also explains that “several analysts agree that the streaming landscape in 2017 will be dominated by Spotify” (Rys). Being around for so long, the company has developed a loyal fanbase and continues to hold the ambition to get better.
ReplyDeleteThe company that seems to be struggling the most, or lacks a sustainable business model would be that of SoundCloud and Tidal. SoundCloud is a company that allows for artists to post their own songs and explore different musical interests. Although a very creative idea, and it does attract a large number of subscribers, it is a business model that benefit more from being bought by a large company. YouTube has Google in order to support it, therefore is SoundCloud had a company like that to help guide it, it has a lot of potential.
Works Cited
Rys, Dan. “2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?” Billboard. 06 January 2017. Web. 27 March 2017.
Halperin, S. (2016, December 6). Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!' Retrieved March 27, 2017
Levine, Robert. “Is the Record Business Really Back? How Streaming Is (And Isn't) Turning a Profit” Billboard. Web. 27 March 2017.
As Netflix is the king of the video streaming industry, Spotify is the king of the music streaming industry. They’re both the largest service in their respective fields. Both companies have revolutionized their respective industries. And both have the largest subscriber base of their respective industries. According to billboard, has over 89 million users, and over 50 million paid subscribers by the beginning of this month. Which is up 10 million from September of 2016. What is even more telling of its success is Spotify’s subscriber growth “…it took the streaming service just five-and-a-half months to gain 10 million subscribers -- half a month quicker from when the service went from 30 million to 40 million subscribers.” (Gensler)
ReplyDeleteAs of right now, no other streaming service can touch Spotify’s success. While they are still not where they want to be financially, Spotify is the key reason for the music industries rebirth. Due to their extensive subscriber base, both paid subscription, and people using their “free” service funded by advertisements, Spotify is the biggest contributor to the record companies. According to billboard, Spotify pays the record industry 83% of their revenue “In its Global Music Report, the IFPI said that €2.89 billion (or $3 billion) was paid to the record industry from both subscription and ad-supported services globally…Spotify was responsible for 56 percent of the total revenues generated by streaming, worldwide.”(Flanagan) They have been the biggest driver in the switch to streaming music, as, according to Nielson, 2016 proved that steaming music has overtaken physical sales for the very first time. Additionally, the music industry is bouncing back “Streaming led the U.S. music industry to its first back-to-back yearly growth this millennium and in the first half of 2016 was the single ¬highest source of revenue in the U.S. recorded-music industry, ¬bringing in $1.61 billion. All three major labels -- Universal, Sony and Warner -- posted streaming-driven double-digit percent boosts in earnings throughout the past year.” (Gensler) This change could not have been done without Spotify’s success. Spotify has leapfrogged iTunes and digital downloading to become the best option for both users and record label executives alike.
Despite the fact that Spotify is ahead by far in the music streaming industry’s race for dominance, streaming services have yet to offer a business model that is completely sustainable. With new competition coming in from Apple, Amazon, IHeartRadio, and Pandora, its tough to see how Spotify, its competitors and the industry will pan out. Apples, svp of internet software and products says there is a positive future for the industry with the coming competition. “"If they drive more people to pay and buy music then that's a good thing for all of us," (Halperin) However, only Spotify seems to be in a good position at the moment. They are still not making profits after years of streaming music. Just recently they have slowed down losses and increased revenue dramatically but it is still not yet enough. It is rumored that they will set their IPO later this year which could swing things around for the company. But still the fact that the most successful company in the industry is still failing to profit does not bode well for the industry. All in all, Spotify has the best business model so far, but the rest are severely slacking and I don’t see how they will be able to stay afloat.
Works cited
Flanagan, Andrew. "Spotify's Financials: Losses Slow, Revenues Jump, Company Generates Over Half of All Streaming Royalties." Billboard. N.p., 24 May 2016. Web. 28 Mar. 2017. .
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 02 Mar. 2017. Web. 28 Mar. 2017. .
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., n.d. Web. 28 Mar. 2017. .
In recent years the music industry has evolved with a couple of companies that come right to mind when you think of sustainable business models. First you have to look at Spotify, which has become extremely popular. Their business model of charging a small monthly fee (even smaller fee for students) has been a great success. People love the different features it offers such as following friends and their playlists, being able to see music trending in different categories and overall they have a huge database of music content. Apple Music is also another major company that is on the same level of Spotify in terms of leading the music industry in terms of success, users, and subscriptions. Another prominent company that deals with subscriptions in the music industry is Pandora. Although Pandora differs from Apple Music and Spotify, its model works. Pandora places together playlists depending on a musical topic, mood, or artist and the playlist always seems to have the type of music you're looking for and hoping to hear at that time. They offer a subscription or you just have to listen to ads which works great for whatever preference you may have. Even with these three being the major music companies for streaming over the last decade or so, Amazon has also made huge improvements and could be argued to be included in the same sentence as Spotify, Apple, and Pandora when it comes to streaming music and sustainable business models.
ReplyDeleteApple is evident of this streaming service dominance and their early statistics and success prove that their business model is sustainable. In the 18 months since apple launched its subscription model it was up to 20 million paid subscribers. Of those 20 million users, 60% had not bought music from apple over the last 12 months (Halperin). These statistics argue that apple brought in around 12 million new customers in the 12 month span by releasing their streaming subscription. This is a huge number, with 60% of subscribers being categorized as “new customers” and really makes it evident that apples streaming service is very sustainable.
On the other hand, Spotify is also experiencing great success as it is the biggest current streaming service in the world today with 50 million paid subscribers as of 2017 (Gensler). These are huge numbers and make an argument that Spotify has the most sustainable model with other companies like Apple trying to catch up.
DeleteA testament to all the major streaming services and their potential to have successful business models is the fact that they are taking over the market share. In 2016 streaming services took over as the industry's dominant model, accounting for 51.3% of album consumption (Rys). This statistic offers a lot of hope for future dominance in the industry for music companies like Spotify, Apple, Amazon, and Pandora.
Works Cited
Gensler, Andy. "Spotify Officially Hits 50 Million Paid Subscribers." Billboard. N.p., 2 Mar. 2017. Web. 27 Mar. 2017.
Halperin, Shirley. "Apple Music Hits 20 Million Subscribers; Execs Want 'More, Faster -- We're Hungry!'" Billboard. N.p., 6 Dec. 2016. Web. 28 Mar. 2017.
Rys, Dan. "2017 Streaming Wars: Will Spotify, Apple Music or Amazon Dominate?" Billboard. N.p., 6 Jan. 2017. Web. 28 Mar. 2017.