How Apple, Amazon and Others Are Trying to Gain on Spotify
March 31 2018 - 7:29AM
Dow Jones News
By Anne Steele
Spotify Technology SA, the Swedish company set to go public next
week, is the global leader in music streaming, but several
competitors are working to differentiate their service to win over
artists and listeners.
Here's a look at the competition for music streaming, or
listening to music over the internet in exchange for paying a flat
monthly fee or listening to ads.
Apple Music
Apple Inc. launched its music-streaming service in 2015 a year
after buying Beats Electronics LLC. Its debut stumbled over user
interface and engineering problems, but the service was revamped
within a year and quickly became the No. 2 on-demand service.
Apple's iTunes, where customers pay to download individual songs or
albums and own them permanently, is separate but accessible through
the platform.
Apple Music has benefited from its integration with Apple
devices, from iPhones and MacBooks to Apple Watches and HomePod
voice-activated speakers, which sync easily with Apple Music but
less so with Spotify or other services.
Apple Chief Executive Tim Cook has said streaming isn't a
moneymaking business but has emphasized the importance of providing
music and supporting artists.
Pandora
Veteran Internet-radio company Pandora Media Inc. has built the
largest audio music-streaming service in the U.S. with 74.7 million
active listeners to its free, ad-supported personalized music
stations. The company and its stock have struggled recently as
users and ad dollars have migrated to services that allow listeners
to play individual songs on demand. Last year, a $480 million
investment from Sirius XM Holdings Inc. was followed by a
management shake-up that brought Sling TV's founding CEO, Roger
Lynch, to the helm.
A new on-demand subscription service called Pandora Premium has
nearly 5.5 million subscribers.
Founded on a technology called the Music Genome Project -- a
combination of humans and machines that helped it analyze music and
recommend songs for each listener -- Pandora has collected tons of
data on music and its users. It is working to apply that technology
to podcasts, which it hopes will attract and keep more listeners on
its platform.
SoundCloud
SoundCloud Ltd. established its reputation as a free site for
emerging artists and DJs to share and promote their music. It
maintains a devout fan base, but also licenses music from major and
independent labels to compete with Spotify and others. Founded in
2007, Berlin-based SoundCloud says it reaches about 175 million
monthly listeners in more than 190 countries.
In 2016, it rolled out subscription tier SoundCloud Go+, which
lets users listen to music offline and without ads. For $9.99 a
month, it includes access to 150 million tracks, mostly mixes,
mashups and other musical creations, in addition to a catalog of
roughly 30 million songs that is also offered on other services
like Spotify and Apple Music.
Last year, after a flurry of speculation over its ability to
survive, SoundCloud laid off more than 40% of its staff and then
replaced its leadership when it took $169.5 million from boutique
investment bank Raine Group and Singapore investment company
Temasek to stay afloat.
Google/YouTube
Alphabet Inc.'s YouTube alone accounts for twice as much time
spent listening to on-demand music as all paid audiostreaming
services combined, according to the International Federation of the
Phonographic Industry. While artists continue to rack up massive
streaming numbers on the video-sharing platform, the payout from
those streams is much smaller than revenue brought in via
subscription services.
After the record industry urged Google to offer more
subscription options, it expanded its Google Play Music library
platform in 2013 to include an "All Access" on-demand
music-streaming service and has since launched a paid version of
its popular videosharing service called YouTube Red.
The company is planning to combine the two services. Google
doesn't disclose subscriber figures for either.
Amazon Music
The main draw for Amazon.com Inc.'s music service, introduced in
2016, is its ability to integrate with the company's
voice-activated Echo smart speaker. The speaker's virtual-assistant
technology, Alexa, takes requests such as "chart toppers from
1999." Last year, Alexa surpassed smartphones as the No. 1 way
Amazon Music users access the service.
Since getting into the music-streaming business, Amazon, which
doesn't release subscriber numbers, has tried to cater to a more
mainstream audience than its competitors. Amazon has been pouring
resources into Alexa, as competition heats up among
artificial-intelligence assistants from Google and Apple, according
to people familiar with the company's thinking.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
March 31, 2018 07:14 ET (11:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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