Swedish company Spotify continues to show a significant hold on the music streaming industry. Currently, the service is used by 60 million payed listeners, and another 80 million basic users. This number dominates the industry, with the nearest rival Apple Music holding to a mere 27 million people. These numbers are very important as Spotify looks to make its public debut on the stock market.
Started by co-founders Daniel Ek and Martin Lorentzon, the music streaming company created a significant movement towards online streaming of content. While music streaming sites like Napster existed for many years before Spotify was on the scene, music was still mostly consumed through digital download off of marketplaces like iTunes, at $0.99 for a single song. Spotify revolutionized this process by instead offering a plan that guaranteed unlimited music access for only $9.99 a month. While seemingly a steal, the record companies were eager to sign on to the deal, as the average person who would buy individual tracks would be spending less each month. Spotify also promised less piracy, which trends for the last 12 years seem to reflect.
Apple Music, another very popular music service, has not been as successful in gaining users. Apple Music first started as Beats Music in 2014. After acquiring Beats, Inc Apple stripped down Beats Music and used the contracting licenses to create the structure for the new service. Since then, Apple Music does not seem to have broken out from the initial push of users fueled by Apple’s user fan base and others transferring services from the deceased Beats Music. There is some speculation as to why this is the case. Many feel there is confusion between the separate services of iTunes and Apple Music, with iTunes already facing years of criticism for being unintuitive and difficult to navigate. Others also blame the fact that many Android users don’t realize Apple Music is also compatible on their device, not just Apple products.
One major edge Apple Music has always had over Spotify however is the ability to negotiate exclusive releases. Apple Music has a large buying power, and has been able to convince major artists like Kanye West, Drake, and Beyonce to delay the release of their album on all platforms but Apple Music. While this has certainly given Apple Music an edge, Spotify has recently signed a deal with Universal Music Group that will allow them exclusive album releases for a majority of Universal Artists. Universal is home to many major names, like Eminem, Katy Perry, and Imagine Dragons. It will be interesting to see how Spotify continues to grow in light of this.