“Every new industry has a number of similar patterns which occur over time. Rapid growth followed by consolidation seems to be the norm,” Kate MacKenzie writes for PixoBebo.Occasionally, a newcomer might remain as a major player, but often they get swallowed up by larger companies with deeper pockets, or slowly diminish into a niche player.”
In streaming music, “thanks to major competitors, including Google Play Music and Apple Music, the consolidation and pruning stage has begun. Spotify and Pandora are toast,” MacKenzie writes. “Spotify isn’t making money. Google and Apple’s music services may not be making money, either, but it doesn’t matter because music is not a core business for either, and both have deep enough pockets to lose money on streaming music for years. For Spotify, music is the lifeline, and current contract terms means the company cannot make enough money to survive, so it wants to renegotiate terms with music companies. Meanwhile, the music companies want a bigger cut of Spotify’s growing revenue (which, thanks to Apple Music and more competition, is not growing as fast as it once did). Spotify wants to pay less, music companies want more.”
“Pandora’s situation is worse,” MacKenzie writes. “With the exception of Apple Music, growth in streaming music services and internet radio (including Pandora) has begun to slow, and that means the handwriting is on the wall. The end is near.”
Read more in the full article here.
MacDailyNews Take: Yup.
Simple mathematics makes it blatantly obvious what going to happen to Pandora. — MacDailyNews, September 24, 2013
—
Apple Music has rendered Spotify’s future decidedly dimmer.
The best customers are those who pay. As demonstrated by years of data, form disparate sources, those paying customers are also significantly more likely to be iPhone owners than those who’ve settled for poor iPhone facsimiles. A healthy portion of these coveted customers will leave for Apple’s comprehensive offering which offers better family rates, more music, likely exclusives, and seamless integration across all Apple devices. It’ll even work with crappy Windows PCs and Android phones eventually (not that those are likely to be Spotify’s paying customers, but whatever, some of them will join Apple Music and maybe even graduate to Apple devices because of it).
Spotify could quickly be left with an unprofitable system, with a dwindling music library because they cannot afford to pay music royalties. — MacDailyNews, June 9, 2015
SEE ALSO:
Apple Music complicating Spotify’s attempt to contract with all three major music labels – August 23, 2016
Apple’s App Store anti-competitive? Spotify and Elizabeth Warren think so – July 15, 2016
Elizabeth Warren accuses Apple of monopolistic-like actions; Spotify concurs – June 29, 2016
Apple Music accumulating subscribers much more quickly than Spotify or Pandora – June 21, 2016