top of page

CompetitorS

As the music streaming industry continues to grow, Spotify has gained a lot of competitors since it’s launch in 2008. Apple Music, Google Play Music, Amazon Music, and Soundcloud are the main competitors in the music-streaming service industry, offering similar features and benefits.

Screen Shot 2018-10-05 at 1.00.30 pm.png

Market share

One report shows that Spotify continues to hold the largest share of the music streaming market at 36%. Apple Music follows at 19%, and Amazon Music at 12%. The other services have significantly less of a share, none more than 3% (Mulligan, 2018). This shows Spotify’s popularity and current domination of the market, but this doesn’t mean the company should grow comfortable; it’s competitors have impressive growth over the last few years, and Spotify has the ability to improve certain aspects in order to stay ahead of the competition.Apple music is undoubtedly the biggest competitor at this point, with statistics that rival Spotify's very closely. While Apple Music’s subscriber count rises, Sanchez (2018) reports brand loyalty and engagement was much higher for Spotify, at 28% as opposed to Apple’s 19%.

ANALYSIS

As Apple has over 57% of the operating system market share in Australia (Statista, 2018), this gives them a big advantage as their service is potentially easier to use for this 57%. Apple Music also connects directly with your iTunes library, giving users the ability to access local files and songs that might not be on Apple Music. Spotify allows local file access on your computer, however does not when using their mobile service. Familiarity with the brand, as well as an experience that is more streamlined with their OS, gives Apple users another reason to choose Apple Music.

 

Google Play Music does for Android users as Apple Music does for Apple users, making it potentially easier to use as it is designed specifically for this OS. While Android holds over 41% of the market of operating systems in Australia (Statista, 2018), its low number of subscribers in comparison to their competitors suggests that it poses no major threat to Spotify at this stage.

 

Amazon and Amazon Music services are more popular in the US than Australia, and so many Australians haven't even heard of their music platform; despite this, it continues to slowly grow as a streaming service in other parts of the world. Users might be skeptical of the service, as Amazon is viewed more as a shopping website, which doesn’t give them much credibility in the completely different market of music streaming. However, one advantage is that Amazon Music works best with the Amazon Alexa smart home device, which is arguably the most popular device in this category; this range of services shows how Amazon takes advantage of digitisation, establishing strong roots in multiple digital markets, and dominating most of them. While Amazon Music struggles to break into the Australian market, it poses a major threat for Spotify internationally and therefore as a whole.

 

Soundcloud claims to be “an open platform that directly connects creators and their fans across the globe” (Soundcloud, 2018). It could be a threat to Spotify as it is the only other service that offers a free version, and it has many more tracks available to users. However, this is because the app is used mostly by amateur creators, which the large majority of people don’t have an interest in compared to established or ‘famous’ artists. Its paid service is also a lot more expensive than its competitors, but this service is targeted at creators over users, and so the existence of the paid version doesn’t affect what is available on the free version. Soundcloud utilises digitisation to appeal foremost to amateur artists and those who seek out this kind of music, making it far easier to access ‘underground’ tracks than it would have been pre-digital economy, where handing mixtapes out on the street and heading to live music venues was your best bet to distribute and find this kind of music.

 

Having launched in 2008, Spotify remains the oldest among its competitors, giving them more time to perfect the service. While Spotify allegedly has the least amount of songs, it beats out it’s competitors with it’s free service. This makes it much more appealing to those who don’t frequently listen to music, as they don't have to make a commitment with money. It’s also a good way to build loyalty with users, providing them with the ability to listen to what they want, with few restrictions. Those who grow tired of the restrictions have already established themselves with the brand, making them more likely to buy a premium subscription with Spotify over its competitors. Spotify’s popularity also helps to boost its appeal, utilising the marketing technique of focus groups, which influence audiences through the people they are exposed to to purchase a certain product or service (Babin, 2018); this means Spotify’s solid base of loyal customers will influence those around them to also use the service, effectively using a kind of ‘peer pressure’ to stimulate interest and sales.

SWOT analysis

In order to stay ahead of the competition, Spotify should be assessing it strengths and weakness, and asking that they need to improve in order to maintain their position in a competitive market.

 

Strengths

  • Current most popular service, helps gain more attention.

  • Allows free account without many restrictions.

  • Connects with other music sharing apps like Shazam.

  • Social media integration.

  • Recommendations feature helps people find music they like and spend more time in the app.

Weaknesses

  • A lot of artists and companies unsatisfied with pay from streams.

  • Free version costs Spotify revenue.

  • Video feature is spotty and doesn't always work; video files are separated from their tracks, meaning you can only view the video in a certain playlist, instead of being able to view it whenever you play the song

Opportunities

  • Improve music video functions.

  • Capitalise on videos, making them more integrated instead of in separate playlists.

  • Give premium users more exclusive content to stimulate a need to subscribe.

  • Improve music library integration.

Threats

  • Angry artists could start boycotts, taking their fans away from the service.

  • Lack of refinement in video feature could lessen the user experience.

  • Competitors can integrate music library with their specific service, which Spotify doesn’t do as efficiently or extensively.

bottom of page