Battle of the Brands: Streaming Music Providers Slug it Out for Market Share
These days, most Americans listen to music via a streaming service. Long gone are the days of CDs, cassettes and even portable MP3-playing devices. Streaming music is a massive industry, with market research provider Statista estimating $23 billion in related revenues this year and projecting that sum to grow to $33 billion by 2025.
With such a large and growing industry, the level of competition has reached a fevered pitch as companies vie with one another to capture important market share by enticing consumers to their respective platforms. Let’s take a quick look at some of the leading players in the music streaming wars.
Apple Inc. (Tii:AAPL) entered the music game early on by introducing the iTunes library in 2001. The platform allows consumers to purchase music, upload music files, burn CDs, and manage music files online. Later that year, the tech giant introduced the iPod MP3 players – creating a new market in the process. Today, Apple offers a subscription-based streaming service that allows users to combine the music they already own with their streaming catalogs. The largest tech company in the world with a $2.11 trillion valuation, Apple’s next move is in the Augmented Reality/Virtual Reality space, with plans reportedly in the works to introduce VR headsets in 2022.
Any conversation involving music streaming services will inevitably include Spotify Technology S.A. (Tii:SPOT). With 356 million monthly active users, including 158 million premium subscribers, Spotify is the market leader. The Swedish audio streaming and media services provider is going head-to-head with Apple to offer its services to consumers across all devices and platforms, even gaming devices. Facing stiff competition from Apple and other tech giants, Spotify plans to launch in more than 80 additional countries in a move that will enable an additional 1 billion people to use its platform. The company also entered the smart gadget industry, recently rolling out its Car Thing, a voice-activated music-streaming device for cars.
Amazon.com, Inc. (Tii:AMZN) entered the streaming service arena in 2007, targeting consumers who preferred to stream music on such platforms as Fire OS, Windows, and Android devices. Since then, the world’s largest online marketplace has become a significant competitor to Apple in the music streaming segment. Amazon offers Prime Music along with its Prime membership at no additional cost. The service features 2 million songs and more than 1,000 playlists and stations selected by the company. Amazon also offers Music Unlimited, a premium music subscription service featuring 60 million songs and thousands of programmed playlists and stations for an additional fee.
A major player in the Chinese market, Tencent Music Entertainment Group (Tii:TME) offers livestreaming services, online karaoke, and online music. Tencent Music’s apps include QQ Music, Kugou, Kuwo, and WeSing, which collectively have more than 800 million active users and 120 million paying subscribers. The company now plans to add a free music streaming service in addition to its streaming membership and pay-per-title services.
Though known primarily as an online video sharing and social media platform, YouTube, a subsidiary of Alphabet Inc. (Tii:GOOG), attracts 1 billion visitors for music each month, according to Google. The company’s YouTube Music streaming service also offers a premium tier, enabling ad-free playback, audio-only background playback and downloading of songs for offline playback. Lyor Cohen, YouTube‘s Global Head of Music, revealed that YouTube paid the music industry over $4 billion in the previous 12 months via advertising and subscription revenue. He also said the platform’s aim is to become the leading revenue generator for the music industry, looking at new sources of revenue for artists such as direct-to-fan products like ticketing, merchandise, memberships, paid digital goods and more.
Sirius XM Holdings Inc. (Tii:SIRI) is a player in the streaming music industry, despite its status as a satellite broadcaster. Not only does the company have more than 34.9 million satellite radio subscribers, but it is also the parent of streaming music service Pandora, which Sirius acquired for $3.5 billion in 2018. SiriusXM recently announced a new partnership with TikTok to bring popularized music from the social video app to the satellite radio provider. The deal also gives Sirius – whose subscribers skew toward the more mature demographics – marketable content for teens.
While the intense battle between these streaming music providers shows no sign of slowing down, consumers should come out ahead as competitive pricing, value-added services, and growing libraries combine for sweet deals for music enthusiasts.