Welcome to the blog of Dr. Lisa Burns' Media Studies senior capstone class (2 pm section) 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!
Wednesday, March 10, 2021
Music Blog 5, Question 2 (March 16th)
Which music streaming service has the most
sustainable business model? And which one do you think is struggling?Limit:
7 responses
Katie Dansereau Part 1 According to “Streaming music made up 83 percent of the record industry's revenue in 2020”, the music industry still managed to be successful amongst the pandemic, as the overall revenue increased by 9.2% to 12.2 billion dollars in 2020 (Bonifacic). Of the 12.2 billion, Spotify and Apple Music generated 7 billion dollars between them, exemplifying the major use of music streaming services across music listeners. Of the streaming services, I believe Spotify has the most sustainable business model, but that could change as services like Apple Music, Soundcloud, and Tidal are looking to implement major changes to the way their service operates.
Despite the difficult circumstances, Spotify still managed to pull impressive numbers in 2020. According to “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled”, Spotify Premium reached 155 million subscribers, which added a record 30 million subscribers for the year (Spangler). Along with the impressive increase of subscribers, podcast and ad studio segments experienced a doubled revenue year over year, as podcasts continue to grow in popularity (Spangler). Part of the allure of Spotify is the personalized aspects of the service, as well as the layout of the service. One of its most popular features is its “Spotify Wrapped”, where users find out at the end of the year what their top artists and songs are through a personalized Wrapped experience. As detailed in “Spotify 2020 Wrapped: How Does It Work & How Is It Calculated?”, a new feature is “Story of Your 2020”, where the service tells users their “most listened to” song, when they first listened to it, and when they streamed it for the 100th time (Carvell). Other features include a “Missed Hits” playlist, with a compiled list of songs similar to each individual’s streaming habits (Carvell). In terms of personalization, Spotify has made their service an interactive and exciting experience for listeners, especially as each year comes to a close.
Katie Dansereau Part 2 Although Apple Music greatly contributed to the music industry revenue in 2020, its business model has some unappealing factors for users. According to “Spotify vs. Apple Music: Students share their thoughts”, one respondent claimed that the main issue with having Apple Music was the reaction of others, as in general people tend to favor Spotify for their streaming (Kaufman). Another respondent claimed that Apple Music lacked the sharing with friends aspect that makes Spotify so popular, as well as Spotify’s “frictionless” experience when trying to discover new music (Kaufman). Overall, Apple Music’s format and lack of personalized experiences make it a less sustainable model than Spotify. Apple Music has a chance to change this, as they recently launched Apple Music Radio with a rebranded Beats 1, as well as other stations (Perez). The service offers features such as “artist interviews, global exclusives and premieres, and other breaking music news”, all of which will add to the overall Apple Music experience (Perez). Overall, Apple Music cannot compete with Spotify at the moment, but if they continue to add features and personalize their service they may be able to.
Less mainstream services such as Tidal and SoundCloud are also going through changes that may alter the reception of their service. Square, the mobile payments firm, recently acquired a majority stake in Tidal, while Spotify is considering a feature that would allow fans to pay artists directly on their service. Both of these changes may improve their popularity, yet Spotify still remains the dominant service in the streaming industry.
Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html. Carvell, Maria. “How Did Spotify Make Its 2020 Wrapped?” ScreenRant, 5 Dec. 2020, screenrant.com/spotify-wrapped-2020-how-its-made-calculated/. Kaufman, Hannah. “Spotify vs. Apple Music: Students Share Their Thoughts.” The Daily Tar Heel, 24 Feb. 2021, www.dailytarheel.com/article/2021/02/arts-applemusic-vs-spotify. Perez, Sarah. “Apple Launches Apple Music Radio with a Rebranded Beats 1, plus Two More Stations.” TechCrunch, TechCrunch, 18 Aug. 2020, techcrunch.com/2020/08/18/apple-launches-apple-music-radio-with-a-rebranded-beats-1-plus-two-more-stations/. Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
Part 1 There is an obvious winner of the music streaming wars, but there are others changing their business models to try to close the gap. Spotify has been a leader of the music streaming industry since it first came into the game, allowing users to listen to their favorite music for free. As Spotify gained popularity, Apple’s iTunes struggled, and eventually lead them to change it into a service comparable to Spotify and rebrand to Apple Music. Soundcloud is a little different than the other platforms as it allows anyone to upload music/listening content. Tidal is Jay-Z new music streaming platform that is definitely lined up to be a competitor in the industry. In this blog post, I will be comparing Spotify and Apple Music, the most popular streaming site and the one that is struggling despite its potential. As many other forms of streaming platforms during the pandemic, music definitely was on the rise as people had more free time to enjoy different content. The company that certainly did the best and continues to reign supreme amongst competitors is Spotify. Spotify has many different payment options available. The free version allows anyone to create an account and listen to their favorite artists, but only gives the option to shuffle playlists, has frequent ads, and music is unavailable offline. The premium version is $10 per month, $5 for students, and gives users access to ad-free music of their choosing. There are other paid versions that allow family access and sharing accounts, which can cost a bit more money (Bizzaco). Apple Music us also $10 per month but does not offer a free version. It does offer all Apple users a three-month free trial at the start and a possible discounted yearly contract, but it is not often known about by users (Bizzaco). The fact that Spotify offers a free version of their service brings in a lot more users, even with Apple Music drawing in some users with the three-month trial.
Both Spotify and Apple Music saw a strong 2020 fourth quarter. According to Todd Spangler with Variety, “audio streamer’s total users grew 27%, to 345 million in Q4, after netting 74 million in 2020,” and a lot of that increase had to do with Spotify’s strategy with podcasts (Spangler). Apple Podcasts is run separately from Apple Music, which hurts the company for capitalizing on the growing industry since it is a free-to-us app. With Spotify, all its content is housed on one application. Whether a user has the free or premium version, they have access to every podcast on the platform. Spotify has done a great job combining all their offered content on an easily maneuverable app. Apple Music is highly criticized for its lack of ease and the services not altogether. Furthermore, Spotify has more social aspects by allowing users to create and share playlists for friends or strangers to listen to on the platform. Apple Music does not offer this, much to the dismay of users. Apple is trying to step up its game to compete with Spotify by combining with Beats 1 to give Apple Music subscribers radio options. Similar to how Pandora used to work, Apple Music 1 will use algorithms to give users a personalized experience without them having to choose their own music (Perez). This will help differentiate itself from Spotify and hopefully help the platform bring in more users.
Bizzaco, Michael, and Quentyn Kennemer. “Apple Music vs. Spotify.” Digital Trends, 18 Feb. 2021, www.digitaltrends.com/music/apple-music-vs-spotify/. Perez, Sarah. “Apple Launches Apple Music Radio with a Rebranded Beats 1, plus Two More Stations.” TechCrunch, TechCrunch, 18 Aug. 2020, techcrunch.com/2020/08/18/apple-launches-apple-music-radio-with-a-rebranded-beats-1-plus-two-more-stations/. Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
We have seen a major shift in the way that people access music over the last couple of decades. When I was young, my main method of listening to music was through a CD or the radio in my moms car. That then developed into buying songs on iTunes with gift cards I would receive for Christmas. Now, it is almost impossible to enjoy music and listen to as much as you want without using a music streaming service. I have flip flopped around from most of the services. Some of the platforms I've used have been Apple Music, Spotify, Soundcloud and Pandora. The one that I use the most currently is Apple Music, but I might be making the switch to Spotify soon.
I believe that Spotify has firmly placed themselves as the premier music streaming platform in the world. In a world where music streaming is so prominent, this is a good sign for Spotify. According to the Recording Industry Association of America, "overall recorded music revenue increased by 9.2 percent to $12.2 billion in 2020." (Bonifacic). This is an important stat to note while also noting that streaming services made up 83 percent of the record industry's revenue in 2020. The two main contributors were Spotify and Apple, but it is clear that Spotify has made larger strides towards becoming the premier music platform. According to Variety, "Spotify packed in a strong end to the year roiled by the pandemic, topping forecasts for Premium subscribers to reach 155 million (up 24%) in the fourth quarter of 2020 — adding a record 30 million for the year. The audio streamer’s total users grew 27%, to 345 million in Q4, after netting 74 million in 2020, also a record."
Spotify shattered unexpected subscriber records that no one expected them to break. A reason for this is the model of their platform that values the customers wants. Spotify offers many features that allow the app to be used similar to social media. You can add friends through the app, which is very accessible. In addition, Spotify offers a wide range of podcast selections that are appealing to its customers.
Part 2 Compared to Spotify, a music platform that does not have as desirable of a business model is Apple Music. Apple Music lacks the features that Spotify offers that connect other users with each other. As stated in an article by Soundguys, "While Apple Music may have more content, Spotify’s music catalog is still extensive with over 50 million songs, with around 40,000 being added everyday. Unlike Apple Music, Spotify also offers podcasts, with over 700,000 currently on the platform. Over the years, Spotify has been diversifying their content library to become the ultimate audio streaming application, which is why the company has gone to great lengths to secure big name podcasters like Joe Rogan." (Maranan). Although Apple Music is undisputedly one of the top 2 music streaming platforms in the world, they are starting to plummet and lose subscribers to Spotify due to the lack of awareness towards the wants of the customer. Apple Music is currently the platform that I use, and I have considered a change for a while now.
Works Cited Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html. Maranan, Harley. “Apple Music vs Spotify.” SoundGuys, 15 Jan. 2021, www.soundguys.com/apple-music-vs-spotify-36833/#:~:text=Apple%20Music%20vs%20Spotify%3A%20Content,songs%2C%20albums%2C%20and%20playlists.&text=While%20Apple%20Music%20may%20have,around%2040%2C000%20being%20added%20everyday. Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
Music streaming services have grown exponentially after their introduction more than 10 years ago. It has almost replaced all other forms of music like CDs, Vinyl, and pay-to-download sites like iTunes. “According to the Recording Industry Association of America’s annual year-end report, overall recorded music revenue increased by 9.2 percent to $12.2 billion in 2020. That growth was primarily sustained by more money coming from streaming services” (Bonifacic). In terms of sustainable business models right now, I believe that Spotify wins.
The two most popular music streaming platforms in the game right now are Spotify and Apple Music. The article “Streaming Music Made Up 83 Percent of the Record Industry’s Revenue In 2020” states that, “of the major streaming platforms, Spotify and Apple Music were the biggest contributors, generating $7 billion in revenue between the two of them… the average number of US subscribers increased to 75.5 million, up from 60.4 million in the previous year” (Bonifacic). These two have been going head to head for a while now since Apple Music first gave them a run for their money in June of 2015.
One of Spotify’s biggest advantages is podcasts. For Apple users, podcasts reside on another app. I think this is a big issue for Apple Music. In the article “The Song Streams Remain the Same” it states that, “…Streaming services, which for the past two years have been pouring money into podcasts, which cost them less. They don’t have to share as much revenue on podcasts” (Page). People want an app that is a “one-stop-shop.”
Another area that Spotify thrives in is knowing its younger audience. Spotify’s features are created with sharing, posting, and sending in mind. The “Year in Review” feature is always highly anticipated by many users and usually makes its way onto social media feeds. As a long-time Apple Music user, it is one of the few things I am jealous of Spotify users for. They also have the student bundle, student discount, and popular curated playlists and music recommendations that other platforms just don’t have. A Forbes article states, “Gen Z teens are listening to more diverse music than ever before… nearly 97% of Gen Z females say they listen to at least five musical genres on a regular basis” (Hodak). This goes to show how much younger generations value new music recommendations and music in general.
One platform that is struggling is Tidal founded by Jay-Z. The music streaming race is solely between Spotify and Apple Music. A Hollywood Reporter article reports that “The company has not disclosed how many people pay for its service since 2016, when it had 3 million subscribers” (Jarvey). I believe that this platform may be too expensive for some people. The price for a standard subscription is $9.99 and the premium is $19.99. This is more expensive than both Spotify and Apple Music, but it promises a “high-fidelity” sound, but only for premium users.
Overall, the music streaming industry is always rapidly changing. I believe Spotify has the most sustainable business model now. But, I wouldn’t count Apple Music out just yet. They also offer some unique features that Spotify just doesn’t have. It’s only a matter of time before they capitalize on them.
Works Cited
Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html.
Hodak, Brittany. “New Study Spotlights Gen Z's Unique Music Consumption Habits.” Forbes, Forbes Magazine, 7 Mar. 2018, www.forbes.com/sites/brittanyhodak/2018/03/06/new-study-spotlights-gen-zs-unique-music-consumption-habits/?sh=18949a2242d0.
Jarvey, Natalie. “Square Acquires Majority Stake in Jay-Z's Tidal for $297 Million.” The Hollywood Reporter, 4 Mar. 2021, www.hollywoodreporter.com/news/square-acquires-majority-stake-in-jay-zs-tidal-for-297-million.
Page, Will. "The Song Streams Remain the Same." Billboard 19 Dec. 2020.
The streaming service sector is one of the most competitive entertainment-centric business areas. The number of music streaming services is growing, reflecting the need of the audience for easy access to the most enticing hits. Still, the drive for monopolization is inevitable in the music streaming sector because, similarly to other business areas, users want products that are the most advanced and the prevention of choice paralysis (the problem of excessive service supply on the market). Ultimately, the analysis of existing data indicates that Spotify is currently the most sustainable business because it features an ever-rising number of subscriptions and, more importantly, strong incomes. At the same time, Pandora Radio, a rival service, is currently struggling because it loses customers due to the rising popularity of Spotify. Spotify is undoubtedly one of the most robust streaming services globally regarding the sustainability of its business model. As I. Bonifacic notes, Spotify and Apple Music managed to generate 7 billion U.S. dollars split more or less evenly between the companies in 2020. To a great extent, the success of Spotify and its ability to outcompete the legendary service of Apple are a result of the unique strategy chosen by the company. Instead of concentrating purely on the streaming of music on its platform, Spotify has managed to transition towards a vital inclusion of podcast content within its libraries. According to Spangler, one of the 'killer podcasts' of the platform belongs to Joe Rogan, who is among the most famous media persona in the U.S. In the end, this concentration on the dual model of podcast and music provision allowed the company to increase the number of subscribers in the fourth quarter of 2020 by 24% (to 155 million) (Spangler). The presented information clearly shows that Spotify is one of the most robust services in America regarding its business model. The combination of podcast and music provision allows the business to make its model sustainable by offering a high-quality option for both music and radio connoisseurs.
At the same time, significant problems befall Pandora Radio, a direct competitor of Spotify in the streaming business. In this regard, the company is in constant decline: at the end of 2019, it featured 63.5 million listeners (it is necessary to note that they are not necessarily subscribers), encountering a loss of 8.5% or 5.9 million individuals ("SiriusXM"). Most likely, the problem of the service lies in its inability to provide a better experience than Spotify. The competitor of Pandora is currently too big to outcompete both in terms of podcast availability and music. Ultimately, this information indicates that the business model of Pandora is unsustainable: it needs to invent something genuinely unique to avoid the Spotify-related pressure. To summarize, the presented information clearly shows that Spotify has a sustainable business model because it manages to be the best music and podcast streaming service in the world. The service, arguably, does not do anything unique: however, it manages to do the generic things at a larger and more substantial scale than its competitors. Pandora, contrary to that, is a perfect example of a failing business as it is incapable of achieving a service that will be able to challenge Spotify. Consequently, the enterprise should seriously consider the change of business model that will include the introduction of some unique features or, at the very least, the enactment of lower prices.
Works Cited Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html. “SiriusXM Financials Reveal Latest Numbers for Pandora.” Music Ally, 2020, musically.com/2020/02/05/siriusxm-financials-reveal-latest-numbers-for-pandora/. Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
In my opinion, the most successful and sustainable music streaming platform is Spotify or Apple Music. To me, they provide a very similar service, but Spotify isn’t exclusive to Apple customers which expands their customer base. Spotify offers a very simple service to its customers: pay a subscription, listen to music. Alternatively, you can use the free version that comes with advertisements. It also offers a family plan where multiple accounts can share one premium membership, which helps it appeal to parents to buy for their family and kids. Streaming music is really the only way to access music in the current age, and I think Spotify is really at the forefront of that. According to Engadget, streaming made up 83 percent of the revenue seen by the record companies. Between Spotify and Apple music (who I said provided a similar service) over $7 billion dollars was made. According to Variety, Spotify also gained about 74 million subscribers over the year 2020. A lot of listeners are also getting involved with the still growing trend of podcast listening. Variety also said that a quarter of its listeners are engaged with podcast content now, and that podcast listening has doubled overall. I think that Spotify has become a home to podcasters and this has had a great effect on their service. Providing space for smaller podcasts, as well as people like Joe Rogan, is very attractive for consumers today. I know Apple also has their podcast section, but to me, Spotify is really where it’s at if you want podcasts.
The streaming services with the least sustainable business models to me are services like Pandora. While Pandora may have been pretty interesting in the past, I just don’t know if the demand for internet radio is on the rise. Pandora had a really good service of having curated stations that went through their algorithm and were supposed to appeal to you and your tastes. But, services like Spotify also offer curated playlists now. Services like Spotify also allow you to create your own playlists and listen to music on demand. According to Business of Apps, Pandora just had its first negative year with 2020, and subscribers have been steadily falling since 2016. With subscriptions falling like that for five years, I don’t see how people could think it isn’t a sinking ship. Pandora didn’t have a bad business model, but unfortunately it just feels like it hasn’t adapted to a changing world. Since the company was founded in 2004, I would’ve hoped they’d capitalized on being in the game early, but they really haven’t. I don’t see how any service they provide is really better than one you can get from Spotify, or even a service like YouTube.
https://www.engadget.com/about/editors/igor-bonifacic. (2020). Streaming music made up 83 percent of the record industry’s revenue in 2020 | Engadget. Engadget; Engadget. https://www.engadget.com/riaa-music-revenue-report-2020-204907874.html Pandora Music Revenue and Usage Statistics (2021). (2020, August 27). Business of Apps; https://www.businessofapps.com/data/pandora-statistics/ Spangler, T. (2021, February 3). Spotify Q4: 155M Paid Subscribers, Podcast Listening Nearly Doubles. Variety; Variety. https://variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/
Caleb Joseph Wood When looking at the various music streaming platforms and considering which one has the best business model, I believe the answer must be Spotify. For starters I believe Spotify has the most user-friendly app compared to the other platforms, like Apple Music or Tidal. I believe this is one of the most essential parts of their success because if the app is not user-friendly, then the user simply won’t use it. Spotify has also made great business decisions in the past year that have already begun to pay off. They have put a major focus on their podcasts, making major news when they signed Joe Rogan and his podcast, The Joe Rogan Experience, to an exclusive deal (Spangler). JRE is the biggest podcast in the world and this move by Spotify to bring them in exclusively has already begun to pay off and will continue to do so for time to come. The benefit they’ve received from their good business decisions can be seen through their subscription numbers. In this year’s fourth quarter they totalled 155 million subscribers, which was a 24% growth in just that quarter. They also saw a record growth of 30 million subscribers during this year (Spangler). The next best platform is Apple Music. While Apple has maintained success, it has always felt like they were a step behind Spotify. Their app feels more outdated than Spotifies, and I believe that is why many consider Spotify to be better. However, Apple has recently announced a “revamp” of their platform, that includes a rebranding of the Beats 1 station to what will now be Apple Music 1 (Perez). The rebranded station will also come with the release of a plethora of new shows featuring big names in music including Action Bronson, Lady Gaga, and Lil Wayne. I think we can expect to see a boost in subscriptions because of the moves they have made. The numbers of stars they feature on their station will certainly attract attention and benefit Apple Music in the long run. I believe many can agree on what music streaming platform is the worst, and that is without a doubt, Tidal. Tidal was originally marketed as the ultimate platform in terms of benefits for the artist, however, I feel as though it has never been able to fully take off as much as the creators had hoped. They made headlines recently when Square, a mobile payment app run by Jack Dorsey, purchased a majority share in the company from former owner, Jay-z. The majority share cost Square and Dorsey a total of $297 million (Jarvey). Despite the big purchase from a proven businessman, I still see Tidal as a second rate platform compared to Spotify and Apple Music. It is absolutely possible for Tidal to reach the point where they will be competing with the bigger platforms, but it is not something I see happening anytime soon. Sources Jarvey, Natalie. “Square Acquires Majority Stake in Jay-Z's Tidal for $297 Million.” The Hollywood Reporter, 4 Mar. 2021. Perez, Sarah. “Apple Launches Apple Music Radio with a Rebranded Beats 1, plus Two More Stations.” TechCrunch, TechCrunch, 18 Aug. 2020. Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021.
Katie Dansereau
ReplyDeletePart 1
According to “Streaming music made up 83 percent of the record industry's revenue in 2020”, the music industry still managed to be successful amongst the pandemic, as the overall revenue increased by 9.2% to 12.2 billion dollars in 2020 (Bonifacic). Of the 12.2 billion, Spotify and Apple Music generated 7 billion dollars between them, exemplifying the major use of music streaming services across music listeners. Of the streaming services, I believe Spotify has the most sustainable business model, but that could change as services like Apple Music, Soundcloud, and Tidal are looking to implement major changes to the way their service operates.
Despite the difficult circumstances, Spotify still managed to pull impressive numbers in 2020. According to “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled”, Spotify Premium reached 155 million subscribers, which added a record 30 million subscribers for the year (Spangler). Along with the impressive increase of subscribers, podcast and ad studio segments experienced a doubled revenue year over year, as podcasts continue to grow in popularity (Spangler). Part of the allure of Spotify is the personalized aspects of the service, as well as the layout of the service. One of its most popular features is its “Spotify Wrapped”, where users find out at the end of the year what their top artists and songs are through a personalized Wrapped experience. As detailed in “Spotify 2020 Wrapped: How Does It Work & How Is It Calculated?”, a new feature is “Story of Your 2020”, where the service tells users their “most listened to” song, when they first listened to it, and when they streamed it for the 100th time (Carvell). Other features include a “Missed Hits” playlist, with a compiled list of songs similar to each individual’s streaming habits (Carvell). In terms of personalization, Spotify has made their service an interactive and exciting experience for listeners, especially as each year comes to a close.
Katie Dansereau
DeletePart 2
Although Apple Music greatly contributed to the music industry revenue in 2020, its business model has some unappealing factors for users. According to “Spotify vs. Apple Music: Students share their thoughts”, one respondent claimed that the main issue with having Apple Music was the reaction of others, as in general people tend to favor Spotify for their streaming (Kaufman). Another respondent claimed that Apple Music lacked the sharing with friends aspect that makes Spotify so popular, as well as Spotify’s “frictionless” experience when trying to discover new music (Kaufman). Overall, Apple Music’s format and lack of personalized experiences make it a less sustainable model than Spotify. Apple Music has a chance to change this, as they recently launched Apple Music Radio with a rebranded Beats 1, as well as other stations (Perez). The service offers features such as “artist interviews, global exclusives and premieres, and other breaking music news”, all of which will add to the overall Apple Music experience (Perez). Overall, Apple Music cannot compete with Spotify at the moment, but if they continue to add features and personalize their service they may be able to.
Less mainstream services such as Tidal and SoundCloud are also going through changes that may alter the reception of their service. Square, the mobile payments firm, recently acquired a majority stake in Tidal, while Spotify is considering a feature that would allow fans to pay artists directly on their service. Both of these changes may improve their popularity, yet Spotify still remains the dominant service in the streaming industry.
Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html.
Carvell, Maria. “How Did Spotify Make Its 2020 Wrapped?” ScreenRant, 5 Dec. 2020, screenrant.com/spotify-wrapped-2020-how-its-made-calculated/.
Kaufman, Hannah. “Spotify vs. Apple Music: Students Share Their Thoughts.” The Daily Tar Heel, 24 Feb. 2021, www.dailytarheel.com/article/2021/02/arts-applemusic-vs-spotify.
Perez, Sarah. “Apple Launches Apple Music Radio with a Rebranded Beats 1, plus Two More Stations.” TechCrunch, TechCrunch, 18 Aug. 2020, techcrunch.com/2020/08/18/apple-launches-apple-music-radio-with-a-rebranded-beats-1-plus-two-more-stations/.
Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
Morgan Tencza
ReplyDeletePart 1
There is an obvious winner of the music streaming wars, but there are others changing their business models to try to close the gap. Spotify has been a leader of the music streaming industry since it first came into the game, allowing users to listen to their favorite music for free. As Spotify gained popularity, Apple’s iTunes struggled, and eventually lead them to change it into a service comparable to Spotify and rebrand to Apple Music. Soundcloud is a little different than the other platforms as it allows anyone to upload music/listening content. Tidal is Jay-Z new music streaming platform that is definitely lined up to be a competitor in the industry. In this blog post, I will be comparing Spotify and Apple Music, the most popular streaming site and the one that is struggling despite its potential.
As many other forms of streaming platforms during the pandemic, music definitely was on the rise as people had more free time to enjoy different content. The company that certainly did the best and continues to reign supreme amongst competitors is Spotify. Spotify has many different payment options available. The free version allows anyone to create an account and listen to their favorite artists, but only gives the option to shuffle playlists, has frequent ads, and music is unavailable offline. The premium version is $10 per month, $5 for students, and gives users access to ad-free music of their choosing. There are other paid versions that allow family access and sharing accounts, which can cost a bit more money (Bizzaco). Apple Music us also $10 per month but does not offer a free version. It does offer all Apple users a three-month free trial at the start and a possible discounted yearly contract, but it is not often known about by users (Bizzaco). The fact that Spotify offers a free version of their service brings in a lot more users, even with Apple Music drawing in some users with the three-month trial.
Part 2
DeleteBoth Spotify and Apple Music saw a strong 2020 fourth quarter. According to Todd Spangler with Variety, “audio streamer’s total users grew 27%, to 345 million in Q4, after netting 74 million in 2020,” and a lot of that increase had to do with Spotify’s strategy with podcasts (Spangler). Apple Podcasts is run separately from Apple Music, which hurts the company for capitalizing on the growing industry since it is a free-to-us app. With Spotify, all its content is housed on one application. Whether a user has the free or premium version, they have access to every podcast on the platform. Spotify has done a great job combining all their offered content on an easily maneuverable app. Apple Music is highly criticized for its lack of ease and the services not altogether. Furthermore, Spotify has more social aspects by allowing users to create and share playlists for friends or strangers to listen to on the platform. Apple Music does not offer this, much to the dismay of users.
Apple is trying to step up its game to compete with Spotify by combining with Beats 1 to give Apple Music subscribers radio options. Similar to how Pandora used to work, Apple Music 1 will use algorithms to give users a personalized experience without them having to choose their own music (Perez). This will help differentiate itself from Spotify and hopefully help the platform bring in more users.
Bizzaco, Michael, and Quentyn Kennemer. “Apple Music vs. Spotify.” Digital Trends, 18 Feb. 2021, www.digitaltrends.com/music/apple-music-vs-spotify/.
Perez, Sarah. “Apple Launches Apple Music Radio with a Rebranded Beats 1, plus Two More Stations.” TechCrunch, TechCrunch, 18 Aug. 2020, techcrunch.com/2020/08/18/apple-launches-apple-music-radio-with-a-rebranded-beats-1-plus-two-more-stations/.
Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
Stephen Halvatzis
ReplyDeletePart 1
We have seen a major shift in the way that people access music over the last couple of decades. When I was young, my main method of listening to music was through a CD or the radio in my moms car. That then developed into buying songs on iTunes with gift cards I would receive for Christmas. Now, it is almost impossible to enjoy music and listen to as much as you want without using a music streaming service. I have flip flopped around from most of the services. Some of the platforms I've used have been Apple Music, Spotify, Soundcloud and Pandora. The one that I use the most currently is Apple Music, but I might be making the switch to Spotify soon.
I believe that Spotify has firmly placed themselves as the premier music streaming platform in the world. In a world where music streaming is so prominent, this is a good sign for Spotify. According to the Recording Industry Association of America, "overall recorded music revenue increased by 9.2 percent to $12.2 billion in 2020." (Bonifacic). This is an important stat to note while also noting that streaming services made up 83 percent of the record industry's revenue in 2020. The two main contributors were Spotify and Apple, but it is clear that Spotify has made larger strides towards becoming the premier music platform. According to Variety, "Spotify packed in a strong end to the year roiled by the pandemic, topping forecasts for Premium subscribers to reach 155 million (up 24%) in the fourth quarter of 2020 — adding a record 30 million for the year. The audio streamer’s total users grew 27%, to 345 million in Q4, after netting 74 million in 2020, also a record."
Spotify shattered unexpected subscriber records that no one expected them to break. A reason for this is the model of their platform that values the customers wants. Spotify offers many features that allow the app to be used similar to social media. You can add friends through the app, which is very accessible. In addition, Spotify offers a wide range of podcast selections that are appealing to its customers.
Part 2
DeleteCompared to Spotify, a music platform that does not have as desirable of a business model is Apple Music. Apple Music lacks the features that Spotify offers that connect other users with each other. As stated in an article by Soundguys, "While Apple Music may have more content, Spotify’s music catalog is still extensive with over 50 million songs, with around 40,000 being added everyday. Unlike Apple Music, Spotify also offers podcasts, with over 700,000 currently on the platform. Over the years, Spotify has been diversifying their content library to become the ultimate audio streaming application, which is why the company has gone to great lengths to secure big name podcasters like Joe Rogan." (Maranan). Although Apple Music is undisputedly one of the top 2 music streaming platforms in the world, they are starting to plummet and lose subscribers to Spotify due to the lack of awareness towards the wants of the customer. Apple Music is currently the platform that I use, and I have considered a change for a while now.
Works Cited
Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html.
Maranan, Harley. “Apple Music vs Spotify.” SoundGuys, 15 Jan. 2021, www.soundguys.com/apple-music-vs-spotify-36833/#:~:text=Apple%20Music%20vs%20Spotify%3A%20Content,songs%2C%20albums%2C%20and%20playlists.&text=While%20Apple%20Music%20may%20have,around%2040%2C000%20being%20added%20everyday.
Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
Emma Frisbie
ReplyDeletePart 1
Music streaming services have grown exponentially after their introduction more than 10 years ago. It has almost replaced all other forms of music like CDs, Vinyl, and pay-to-download sites like iTunes. “According to the Recording Industry Association of America’s annual year-end report, overall recorded music revenue increased by 9.2 percent to $12.2 billion in 2020. That growth was primarily sustained by more money coming from streaming services” (Bonifacic). In terms of sustainable business models right now, I believe that Spotify wins.
The two most popular music streaming platforms in the game right now are Spotify and Apple Music. The article “Streaming Music Made Up 83 Percent of the Record Industry’s Revenue In 2020” states that, “of the major streaming platforms, Spotify and Apple Music were the biggest contributors, generating $7 billion in revenue between the two of them… the average number of US subscribers increased to 75.5 million, up from 60.4 million in the previous year” (Bonifacic). These two have been going head to head for a while now since Apple Music first gave them a run for their money in June of 2015.
One of Spotify’s biggest advantages is podcasts. For Apple users, podcasts reside on another app. I think this is a big issue for Apple Music. In the article “The Song Streams Remain the Same” it states that, “…Streaming services, which for the past two years have been pouring money into podcasts, which cost them less. They don’t have to share as much revenue on podcasts” (Page). People want an app that is a “one-stop-shop.”
Another area that Spotify thrives in is knowing its younger audience. Spotify’s features are created with sharing, posting, and sending in mind. The “Year in Review” feature is always highly anticipated by many users and usually makes its way onto social media feeds. As a long-time Apple Music user, it is one of the few things I am jealous of Spotify users for. They also have the student bundle, student discount, and popular curated playlists and music recommendations that other platforms just don’t have. A Forbes article states, “Gen Z teens are listening to more diverse music than ever before… nearly 97% of Gen Z females say they listen to at least five musical genres on a regular basis” (Hodak). This goes to show how much younger generations value new music recommendations and music in general.
Emma Frisbie
DeletePart 2
One platform that is struggling is Tidal founded by Jay-Z. The music streaming race is solely between Spotify and Apple Music. A Hollywood Reporter article reports that “The company has not disclosed how many people pay for its service since 2016, when it had 3 million subscribers” (Jarvey). I believe that this platform may be too expensive for some people. The price for a standard subscription is $9.99 and the premium is $19.99. This is more expensive than both Spotify and Apple Music, but it promises a “high-fidelity” sound, but only for premium users.
Overall, the music streaming industry is always rapidly changing. I believe Spotify has the most sustainable business model now. But, I wouldn’t count Apple Music out just yet. They also offer some unique features that Spotify just doesn’t have. It’s only a matter of time before they capitalize on them.
Works Cited
Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html.
Hodak, Brittany. “New Study Spotlights Gen Z's Unique Music Consumption Habits.” Forbes, Forbes Magazine, 7 Mar. 2018, www.forbes.com/sites/brittanyhodak/2018/03/06/new-study-spotlights-gen-zs-unique-music-consumption-habits/?sh=18949a2242d0.
Jarvey, Natalie. “Square Acquires Majority Stake in Jay-Z's Tidal for $297 Million.” The Hollywood Reporter, 4 Mar. 2021, www.hollywoodreporter.com/news/square-acquires-majority-stake-in-jay-zs-tidal-for-297-million.
Page, Will. "The Song Streams Remain the Same." Billboard 19 Dec. 2020.
Alex Hazarian
ReplyDeletePart 1
The streaming service sector is one of the most competitive entertainment-centric business areas. The number of music streaming services is growing, reflecting the need of the audience for easy access to the most enticing hits. Still, the drive for monopolization is inevitable in the music streaming sector because, similarly to other business areas, users want products that are the most advanced and the prevention of choice paralysis (the problem of excessive service supply on the market). Ultimately, the analysis of existing data indicates that Spotify is currently the most sustainable business because it features an ever-rising number of subscriptions and, more importantly, strong incomes. At the same time, Pandora Radio, a rival service, is currently struggling because it loses customers due to the rising popularity of Spotify.
Spotify is undoubtedly one of the most robust streaming services globally regarding the sustainability of its business model. As I. Bonifacic notes, Spotify and Apple Music managed to generate 7 billion U.S. dollars split more or less evenly between the companies in 2020. To a great extent, the success of Spotify and its ability to outcompete the legendary service of Apple are a result of the unique strategy chosen by the company. Instead of concentrating purely on the streaming of music on its platform, Spotify has managed to transition towards a vital inclusion of podcast content within its libraries. According to Spangler, one of the 'killer podcasts' of the platform belongs to Joe Rogan, who is among the most famous media persona in the U.S. In the end, this concentration on the dual model of podcast and music provision allowed the company to increase the number of subscribers in the fourth quarter of 2020 by 24% (to 155 million) (Spangler). The presented information clearly shows that Spotify is one of the most robust services in America regarding its business model. The combination of podcast and music provision allows the business to make its model sustainable by offering a high-quality option for both music and radio connoisseurs.
Alex Hazarian
ReplyDeletePart 2
At the same time, significant problems befall Pandora Radio, a direct competitor of Spotify in the streaming business. In this regard, the company is in constant decline: at the end of 2019, it featured 63.5 million listeners (it is necessary to note that they are not necessarily subscribers), encountering a loss of 8.5% or 5.9 million individuals ("SiriusXM"). Most likely, the problem of the service lies in its inability to provide a better experience than Spotify. The competitor of Pandora is currently too big to outcompete both in terms of podcast availability and music. Ultimately, this information indicates that the business model of Pandora is unsustainable: it needs to invent something genuinely unique to avoid the Spotify-related pressure.
To summarize, the presented information clearly shows that Spotify has a sustainable business model because it manages to be the best music and podcast streaming service in the world. The service, arguably, does not do anything unique: however, it manages to do the generic things at a larger and more substantial scale than its competitors. Pandora, contrary to that, is a perfect example of a failing business as it is incapable of achieving a service that will be able to challenge Spotify. Consequently, the enterprise should seriously consider the change of business model that will include the introduction of some unique features or, at the very least, the enactment of lower prices.
Works Cited
Bonifacic, Igor. “Streaming Music Made up 83 Percent of the Record Industry's Revenue in 2020.” Engadget, 26 Feb. 2021, www.engadget.com/riaa-music-revenue-report-2020-204907874.html.
“SiriusXM Financials Reveal Latest Numbers for Pandora.” Music Ally, 2020, musically.com/2020/02/05/siriusxm-financials-reveal-latest-numbers-for-pandora/.
Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, 3 Feb. 2021, variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/.
Brendan McDonald
ReplyDeleteIn my opinion, the most successful and sustainable music streaming platform is Spotify or Apple Music. To me, they provide a very similar service, but Spotify isn’t exclusive to Apple customers which expands their customer base. Spotify offers a very simple service to its customers: pay a subscription, listen to music. Alternatively, you can use the free version that comes with advertisements. It also offers a family plan where multiple accounts can share one premium membership, which helps it appeal to parents to buy for their family and kids. Streaming music is really the only way to access music in the current age, and I think Spotify is really at the forefront of that. According to Engadget, streaming made up 83 percent of the revenue seen by the record companies. Between Spotify and Apple music (who I said provided a similar service) over $7 billion dollars was made. According to Variety, Spotify also gained about 74 million subscribers over the year 2020. A lot of listeners are also getting involved with the still growing trend of podcast listening. Variety also said that a quarter of its listeners are engaged with podcast content now, and that podcast listening has doubled overall. I think that Spotify has become a home to podcasters and this has had a great effect on their service. Providing space for smaller podcasts, as well as people like Joe Rogan, is very attractive for consumers today. I know Apple also has their podcast section, but to me, Spotify is really where it’s at if you want podcasts.
The streaming services with the least sustainable business models to me are services like Pandora. While Pandora may have been pretty interesting in the past, I just don’t know if the demand for internet radio is on the rise. Pandora had a really good service of having curated stations that went through their algorithm and were supposed to appeal to you and your tastes. But, services like Spotify also offer curated playlists now. Services like Spotify also allow you to create your own playlists and listen to music on demand. According to Business of Apps, Pandora just had its first negative year with 2020, and subscribers have been steadily falling since 2016. With subscriptions falling like that for five years, I don’t see how people could think it isn’t a sinking ship. Pandora didn’t have a bad business model, but unfortunately it just feels like it hasn’t adapted to a changing world. Since the company was founded in 2004, I would’ve hoped they’d capitalized on being in the game early, but they really haven’t. I don’t see how any service they provide is really better than one you can get from Spotify, or even a service like YouTube.
https://www.engadget.com/about/editors/igor-bonifacic. (2020). Streaming music made up 83 percent of the record industry’s revenue in 2020 | Engadget. Engadget; Engadget. https://www.engadget.com/riaa-music-revenue-report-2020-204907874.html
Pandora Music Revenue and Usage Statistics (2021). (2020, August 27). Business of Apps; https://www.businessofapps.com/data/pandora-statistics/
Spangler, T. (2021, February 3). Spotify Q4: 155M Paid Subscribers, Podcast Listening Nearly Doubles. Variety; Variety. https://variety.com/2021/digital/news/spotify-q4-2020-results-podcast-1234899086/
Caleb Joseph Wood
ReplyDeleteWhen looking at the various music streaming platforms and considering which one has the best business model, I believe the answer must be Spotify. For starters I believe Spotify has the most user-friendly app compared to the other platforms, like Apple Music or Tidal. I believe this is one of the most essential parts of their success because if the app is not user-friendly, then the user simply won’t use it. Spotify has also made great business decisions in the past year that have already begun to pay off. They have put a major focus on their podcasts, making major news when they signed Joe Rogan and his podcast, The Joe Rogan Experience, to an exclusive deal (Spangler). JRE is the biggest podcast in the world and this move by Spotify to bring them in exclusively has already begun to pay off and will continue to do so for time to come. The benefit they’ve received from their good business decisions can be seen through their subscription numbers. In this year’s fourth quarter they totalled 155 million subscribers, which was a 24% growth in just that quarter. They also saw a record growth of 30 million subscribers during this year (Spangler).
The next best platform is Apple Music. While Apple has maintained success, it has always felt like they were a step behind Spotify. Their app feels more outdated than Spotifies, and I believe that is why many consider Spotify to be better. However, Apple has recently announced a “revamp” of their platform, that includes a rebranding of the Beats 1 station to what will now be Apple Music 1 (Perez). The rebranded station will also come with the release of a plethora of new shows featuring big names in music including Action Bronson, Lady Gaga, and Lil Wayne. I think we can expect to see a boost in subscriptions because of the moves they have made. The numbers of stars they feature on their station will certainly attract attention and benefit Apple Music in the long run.
I believe many can agree on what music streaming platform is the worst, and that is without a doubt, Tidal. Tidal was originally marketed as the ultimate platform in terms of benefits for the artist, however, I feel as though it has never been able to fully take off as much as the creators had hoped. They made headlines recently when Square, a mobile payment app run by Jack Dorsey, purchased a majority share in the company from former owner, Jay-z. The majority share cost Square and Dorsey a total of $297 million (Jarvey). Despite the big purchase from a proven businessman, I still see Tidal as a second rate platform compared to Spotify and Apple Music. It is absolutely possible for Tidal to reach the point where they will be competing with the bigger platforms, but it is not something I see happening anytime soon.
Sources
Jarvey, Natalie. “Square Acquires Majority Stake in Jay-Z's Tidal for $297 Million.” The Hollywood Reporter, 4 Mar. 2021.
Perez, Sarah. “Apple Launches Apple Music Radio with a Rebranded Beats 1, plus Two More Stations.” TechCrunch, TechCrunch, 18 Aug. 2020.
Spangler, Todd. “Spotify Hits 155 Million Paid Subscribers in Q4, Says Podcast Listening Nearly Doubled.” Variety, Variety, 3 Feb. 2021.