It’s Not Over Until the Fat Lady Sings: The Apple Spotify Battles Continue
Spotify has been the top music streaming service since it entered the U.S. market in 2011. However, Apple may have the tools to fight off this competitor. In the past year, it has been shown that Spotify has 18.2 million subscribers in the U.S. while Apple had 15 million according to Billboard, but Apple’s subscribers have been growing five percent on a monthly basis while Spotify subscribers have been increasing by 2 percent every month. If this trend continues, Apple will surpass Spotify by the summer.
How has Apple inspired such growth?
Simple streaming onto devices. By doing this, Apple is locking all of its buyers into the Apple universe. In addition to having the streaming service pre-downloaded onto their devices, Apple has also made their streaming service work best on their devices, so that no other streaming service can compare.
This strategy incentivizes people to buy Apple products and gives buyers who already own an Apple Product a reason to sign up for Apple Music.
Why does this matter so much to Apple?
After all, this is a tiny portion of the company’s overall business. It’s part of the division of services that include Apple Pay, iCloud, and the App Store. This division only makes 10 percent of the company’s revenue. However, it was just 8.5 percent of the company’s revenue before, which means it’s growing in importance.
The money made by this service could continue to market the service until it becomes the dominant name in online music.
What are the Implications of this in the Music Industry?
If Apple music does gain this dominance, it will have more power over record labels, and be able to raise the prices for those already subscribed to the service. However, not all record companies want one streaming service dominating music streaming. In fact, the Big Three of music production companies (Universal Music Group, Warner Music Group, and Sony Music) said that many kinds of music streaming players promote diversity and innovation among the streaming platforms and prevents any one company from gaining too much leverage over these companies.
While Spotify may be in trouble, it still has an advantage over Apple Music. Spotify has better customer service. Spotify knows it’s users better and gives them superior design and technology. Spotify also is more diverse in the music it promotes and tends to be popular with those who want music from different sources, whereas Apple tends to be for more of the artist and album driven consumer. Each of these music streaming services have their positives and negatives, which one will take the lead in this race for dominance is unknown, but one thing for sure: it’s not over until the fat lady sings.