Welcome to the blog of Dr. Lisa Burns' Media Studies senior capstone class (3:30 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!
Tuesday, March 27, 2018
Music Blog 8, Question 2 (April 3rd)
Which streaming service has the most
sustainable business model? And which one do you think is struggling?Limit:
8 responses
Streaming has become the way of the future. The way in which we listen to most of our music has changed so drastically over the last few decades that it is almost hard to believe. When it comes to streaming there are so many different choices that one has to choose from. When it comes to all of the different streaming services, there are definitely some companies that have more sustainable business models than others. Out of all the streaming services, I’d say that Apple Music has the most sustainable business model. Fortune.com reads, “Two years from its launch, Apple Music (AAPL, +0.20%) is the industry’s number two player with about 28 million paid users. Unlike Spotify, it doesn’t have a free service. Subscribers can access a catalog of about 40 million songs for about $10 per month—or nearly the entire iTunes catalog, which boasts 45 million songs” (Reuters.) Apple’s loyal customers allows them to get away with only having a premium version that requires pay, which a company like Spotify couldn’t get away with. The fact that Apple arrived much later to the game than other companies and is already the 2nd leading player in the whole streaming market gives you just a small snapshot of their maximum potential. Give them more time and god knows how much they could jump most of their competitors, whom may I remind you have been at it for way longer. Apple’s resources also give them a huge advantage. An article from Digital Trends reads, “There’s another area where Apple Music has the leg up on its competition: Integration of the iTunes library. Any music you’ve got — whether previously purchased via the iTunes Store, ripped from a physical CD, or uploaded to iTunes Match — will appear in your Apple Music library, giving you the option to freely browse your own music alongside Apple’s standard catalog” (Hall.) Having the ability to seamlessly integrate all of your music and have it all in the same place is a huge advantage from a user standpoint. So my choice for the most sustainable business model was Apple. In terms of which service is struggling I am going to go with Spotify. Yes, I know Spotify may appear as a bizarre choice since they are “the global market leader in terms of paid subscribers” (Reuters.) When I look at a company I look at two things in particular. First, their success up until this point and second, how they are set up for the future. Being successful in the present is a great achievement, but it holds significantly less value when you might not be set up for that same success down the road. The article we read from Billboard puts it bluntly, “While Spotify may be the current leader in its space by market share, it still has neither the truly global reach nor the diversified revenue streams of rivals Apple, Google and Amazon to paint a clear-cut path to profitability” (Hu.) With Spotify officially filing to go public, their success may not be what it once was. They are attempting to compete with some of the biggest companies in the world, whom all have immense diversified revenue streams from every which way. Most times in business, it isn’t a playful game and the big bully usually will always end up taking your lunch money.
A Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services. (n.d.). Retrieved April 03, 2018, from http://fortune.com/2017/09/11/spotify-apple-music-tidal-streaming/
Hall, P. (2018, March 16). Apple Music vs. Spotify: Which service is the streaming king? Retrieved April 03, 2018, from https://www.digitaltrends.com/music/apple-music-vs-spotify/
Why Music Streaming's Greatest Hopes Are Spotify's Toughest Challenges. (n.d.). Retrieved April 03, 2018, from https://www.billboard.com/articles/business/8231963/spotify-biggest-challenges-music-streaming-greatest-hopes
The way we consume music has drastically changed in just the last couple of years. I remember growing up having to go buy a CD if I wanted just one song from it. I also remember getting iTunes gift cards around the holidays because I wanted to buy music on iTunes. However, with streaming services at the forefront of listening to music, I haven’t even opened iTunes in years. Music streaming services are relatively new with Pandora being the first major streaming service which launched in 2005 (Gil). The idea behind Pandora was that it would use algorithms to create personalized music stations that would appeal to the listener. For a while, Pandora was the streaming service. It wasn’t until a few years later that Spotify launched. In my opinion, Spotify is the most successful business model for a streaming service. Pandora, Spotify, and Apple Music, I believe are the top music streaming services. There are an incredible amount out there, but these three seem to be household names. Which one is the best business model is that of personal preference. Some people like the setup of Apple Music while others are loyal to Pandora. Spotify is the most attractive to me because not only do they have a student rate, which is a good move because a majority of their target audience is made up of students, but it’s also set up similarly to iTunes. We grew up on iTunes so there is a familiarity with Spotify. Additionally, you can create your own playlists and add whichever songs you choose. Spotify also has about 60 million users which is much larger in comparison to Apple Music which has about 28 million paid users (Reuters). Spotify premium also allows you to listen offline, download songs, and has unlimited skips. I will say, if you’re not paying for Spotify it is almost not worth it. Their free version is quite frustrating and resembles Pandora a bit more. Pandora, to me, is the streaming service struggling the most. It is not a desirable model. For one, it is only available in the US which is frustrating because if I’m paying for it, I want to be able to use it whenever and wherever I am. Additionally, Pandora has yet to report a profitable quarter (Hu), which isn’t surprising. Pandora’s model resembles different radio stations, therefore, if I pick Harry Styles radio to listen to, it will allow me to listen to his songs as well as songs similar to his. I don’t see the benefit in paying for Pandora when the free version will basically allow me to do the same thing as the premium version. Pandora also has too many ads. I understand they need them, especially for members who aren’t paying for premium. However, they have ads run after every 6 songs I believe and that is one of the most unattractive things in a streaming service. Just by listening to Spotify frequently, I haven’t been able to figure out their ad runs because sometimes I can get through an entire album with 1 or 2 ads whereas other times there’ll be an add after every 4 tracks. I find that in general, I go to spotify first if there’s something specific I want to listen to. If I’m just looking for background music I’ll go to Pandora. Pandora is always my second choice. I haven’t even seen the setup of Apple Music because I feel like there’s no reason to use that service when I’m perfectly fine with what I have. I will say though, Apple Music is one to keep an eye on because they’re not just a music streaming service. They’ve been doing the Carpool Karaoke with James Corden series as well as exclusively streamed the Harry Styles: Behind the Album documentary. They have content no other streaming service has.
“A Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services.” Fortune, fortune.com/2017/09/11/spotify-apple-music-tidal-streaming/.
Gil, Lauren. “History of Music Streaming.” Sutori, www.sutori.com/story/history-of-music-streaming.
Hu, Cherie. “Pandora Is Losing Active Listeners, Selling Fewer Ads: What Will New CEO Roger Lynch Do?” Billboard, www.billboard.com/articles/business/8023105/pandora-losing-active-listeners-selling-fewer-ads-ceo-roger-lynch.
Music Industry If I were to walk around an elementary school and ask the students if they have bought an Album on a Compact Disc they would look I was a ghost. The funny thing about that is that I myself have not purchased many CD’s but I have nonetheless. Music has ran far far away from albums and CD’s and taken a break in the world of downloading and streaming. Apple came out with the iTunes when I was still in Elementary school and since then I have not seen anyone buy a physical album and few but a full album at all. Much like television the music industry is moving into the world of streaming with services like Spotify music and Apple music. Those two streaming services being the largest players they are not the only way you can choose to listen to you music. With Spotify being the top dog as of now, Apple Music is built to last and keep a lid on the industry that it revolutionized when I was in grade school. Apple music is built to withstand the changing media market. Spotify has had disputes with large artists such as Jay-z, Taylor Swift, and Kanye West. Apple still sells their albums on iTunes for profit and they can stream just as much music as Spotify on a family plan. Streaming music does not define Apple. Making money as a streaming service alone is challenging because you must compensate the artist for their services. Brophy said in his article The Future of the Streaming Economy: 5 Things to Watch (Guest Column) “Streaming services currently take roughly 30 percent of the gross income earned from streaming music for overhead. This percentage hardly covers expenses.” Spotify relies on subscriptions and advertisements. While they were first to break into the market they will have a difficult time hanging around in the competitive streaming market. Because Apple has other services that it can offer its consumers it has a leg up for longevity over Spotify. Pandora was a service that I believed would be in serious trouble with online radio rather than selecting the song you want to listen to like Spotify offers. Pandora saw an opportunity with the popularity of podcasts. CEO and president of Pandora told Colin Shultz of the billboard.com that they are the largest ad based music site in the world. But that does not stop them from striving for new subscriptions to continue to drive that ad revenue upward. Now in terms of who will be the top dog moving forward the answer has to be Apple Music. Spotify was first to the music streaming industry but has not been able to hold off Apple’s rapid growth in the United States. The billboard writer Ed Christman predicts that Apple Music will overtake Spotify in users or at the very least have the same amount by July. Apple is an institution. iTunes are on every iPhone as soon as you get it and offers a family plan like I mentioned earlier in the blog making it an efficient choice for a parent to keep all of the members of the family happy. Spotify needing to rely on advertisement revenue and subscribers will be the ultimate downfall when it comes to longevity. Once the larger companies like Amazon and Apple that have the capital to last and have other sources of income will take over the market. It takes money to make money and institutions like Apple and Amazon once they put their mind to something they tend to dominate it with loads of capital and consumer friendly deals that squander smaller businesses.
Works Cited . Bromley, Jordan. "The Future of the Streaming Economy: 5 Things to Watch," Billboard 23 Jan. 2018. Web. Christman, Ed. "Apple Music, Spotify Battle Heats Up Again as Race for US Subscribers Gets Closer," Billboard 5 Feb. 2018. Web. Stutz, Colin. "Pandora Reports $395M in Q4 2017 Earnings, 25 Percent Subscriber Growth," Billboard 21 Feb. 2018. Web
The music industry has drastically changed over the past couple of decades - from Walkman’s that held tapes to CDs to iPods to streaming services. It’s hard to know which music streaming service is the right one to choose. Personally, I have used Pandora and Spotify and have stuck with Spotify for the long haul. The low student prices and lack of ads and ability to choose my own songs, made it an easy choice for me.
I think the streaming service with the most sustainable business model is Apple Music. Although I have never used the service, it seems like it is here to stay. Apple Music does not have a free trial aspect like Spotify, according to Reuters it still has about 28 million users that pay for the service. Reuters writes, “Subscribers can access a catalog of about 40 million songs for about $10 per month—or nearly the entire iTunes catalog, which boasts 45 million songs. Apple has been seeking to set itself apart via exclusive content, striking deals with individual artists such as Canadian rapper Drake, something Spotify is resisting. It also allows users to integrate their own iTunes libraries” (Reuters). I think this makes Apple Music the most sustainable business model. The prices are unreal for the amount of songs that you receive. In fact, after reading this article I might be looking into Apple Music as my next streaming service.
The service that I think is struggling the most is Pandora. I don’t know of many millenials that use this service. It seemed to be more popular in the pre-Spotify era. According to Billboard, “In Q2 2017, when it was still under Westergren’s wing, Pandora had declared to investors that it would prioritize growth and retention of active users over pushing for conversion to paid subscriptions. Yet, the service’s active user base declined once again in Q3 2017 -- dipping by 6 percent year-over-year to 73.7 million active users, versus 77.9 million in Q3 2016” (Hu). That is a pretty big loss considering all the other streaming services that are retaining Pandora’s lost members. Pandora’s prices are very appealing at $4.99 but they do not offer a family plan, which is important to many people. Also Pandora Premium is not offered in the UK or Canada according to iMore (Caldwell). Digital Music News reported in November of 2017 - “850,000 users gone each month. 8 million active listeners have left the platform in nine months. $1 billion lost in four years. Advertising failing to bring any kind of meaningful revenue. Four major financial firms have downgraded the stock. Major competitors have reported rising subscription numbers” (Sanchez). These are horrible numbers for Pandora. The stock has dropped so low that it currently stands at $4.77.
It is hard to decide which streaming services to use but it seems that Pandora is on the out and Spotify and Apple Music are on the up and up.
Works Cited: "A Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services," Reuters 11 Sept. 2017. Web.
Caldwell, Serenity. “Pandora Premium - Everything You Need to Know Right Now!” IMore, IMore, 20 Apr. 2017, www.imore.com/pandora-premium.
Hu, Cherie. "Pandora Is Losing Active Listeners, Selling Fewer Ads - What Will New CEO Roger Lynch Do?" Billboard 27 Nov. 2017. Web.
Sanchez, Daniel. “Pandora Death Watch: Stock Sinks Below $5 as Users Flee App.” Digital Music News, 11 Nov. 2017, www.digitalmusicnews.com/2017/11/10/pandora-radio-death-watch/.
Streaming services have definitely turned entire industries upside down. Streaming services are the top form of music consumption, and is still increasing its amount of users. Sales are consistently declining and digital listening is steadily increasing (Crawford). Within this, I would classify Pandora as having the weakest business model, and Spotify as having the strongest model.
Pandora’s business model is less attractive than other streaming service models because it lacks control. It is a streaming service based on a radio model so listeners don’t get much control over what songs they are listening to, like they do in other streaming services. The subscription of Pandora is great because it allows users to enjoy music without ads for about $5, but for their best offer that is most customizable users pay $10 a month, which is the same that users pay for Spotify and Apple Music (Reuters). Also, with streaming services where listeners get to have total control over what songs they listen to and can make playlists, there is less of a need or desire to listen to a radio based streaming service.
Something that has been discussed a lot in class is millennials desire for convenience. Pandora’s model is not convenient at all. There is nothing more annoying that listening to music and having limited control over what song is coming on, and trying to skip until you find the perfect one, “younger millennials have turned their ears and their attention to streaming, with many of those polled opting for on-demand options. This shows that not only is streaming in general more favorable, but the idea of radio simply isn’t as appealing to younger music lovers as it used to be for their older siblings, parents, and grandparents. According to the report, on-demand streaming… accounts for 51% of a younger millennial’s daily listening. When considering all age groups combined, that number is cut in half, landing at 24%” (McIntyre).
Millennials want control over what they are watching, and listening to. They enjoy choosing what song comes on next, and the ability to replay their favorite songs. Along with this, millennials love discovering whats new, and Spotify offers that to it’s users.
Spotify has the best model in my opinion because it allows, even free service streamers, the ability to create their own playlists. They also have the largest music library of all streaming services. Spotify is super convenient as it allows users to listen to other playlists, and share music amongst friends in a very convenient way. I also think that because they are so established, they are the most attractive streaming option, “Analysts say its large user base and data gives it the edge in music recommendation” (Reuters). Spotify also dominates in recommending music that is catered specifically to each listener and their streaming history.
Works Cited
"A Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services," Reuters 11 Sept. 2017. Web.
McIntyre, Hugh. “Millennials Aren't Very Interested In Traditional Radio Any More.” Forbes, Forbes Magazine, 12 July 2016, www.forbes.com/sites/hughmcintyre/2016/07/12/millennials-arent-very-interested-in-traditional-radio-any-more/#1aa32a7637c4. Crawford, Erin. “2017 U.S. Music Year-End Report.” What People Watch, Listen To and Buy, www.nielsen.com/us/en/insights/reports/2018/2017-music-us-year-end-report.html.
Streaming has become the way of the future. The way in which we listen to most of our music has changed so drastically over the last few decades that it is almost hard to believe. When it comes to streaming there are so many different choices that one has to choose from. When it comes to all of the different streaming services, there are definitely some companies that have more sustainable business models than others. Out of all the streaming services, I’d say that Apple Music has the most sustainable business model. Fortune.com reads, “Two years from its launch, Apple Music (AAPL, +0.20%) is the industry’s number two player with about 28 million paid users. Unlike Spotify, it doesn’t have a free service. Subscribers can access a catalog of about 40 million songs for about $10 per month—or nearly the entire iTunes catalog, which boasts 45 million songs” (Reuters.) Apple’s loyal customers allows them to get away with only having a premium version that requires pay, which a company like Spotify couldn’t get away with. The fact that Apple arrived much later to the game than other companies and is already the 2nd leading player in the whole streaming market gives you just a small snapshot of their maximum potential. Give them more time and god knows how much they could jump most of their competitors, whom may I remind you have been at it for way longer. Apple’s resources also give them a huge advantage. An article from Digital Trends reads, “There’s another area where Apple Music has the leg up on its competition: Integration of the iTunes library. Any music you’ve got — whether previously purchased via the iTunes Store, ripped from a physical CD, or uploaded to iTunes Match — will appear in your Apple Music library, giving you the option to freely browse your own music alongside Apple’s standard catalog” (Hall.) Having the ability to seamlessly integrate all of your music and have it all in the same place is a huge advantage from a user standpoint. So my choice for the most sustainable business model was Apple. In terms of which service is struggling I am going to go with Spotify. Yes, I know Spotify may appear as a bizarre choice since they are “the global market leader in terms of paid subscribers” (Reuters.) When I look at a company I look at two things in particular. First, their success up until this point and second, how they are set up for the future. Being successful in the present is a great achievement, but it holds significantly less value when you might not be set up for that same success down the road. The article we read from Billboard puts it bluntly, “While Spotify may be the current leader in its space by market share, it still has neither the truly global reach nor the diversified revenue streams of rivals Apple, Google and Amazon to paint a clear-cut path to profitability” (Hu.) With Spotify officially filing to go public, their success may not be what it once was. They are attempting to compete with some of the biggest companies in the world, whom all have immense diversified revenue streams from every which way. Most times in business, it isn’t a playful game and the big bully usually will always end up taking your lunch money.
ReplyDeleteSources
DeleteA Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services. (n.d.). Retrieved April 03, 2018, from http://fortune.com/2017/09/11/spotify-apple-music-tidal-streaming/
Hall, P. (2018, March 16). Apple Music vs. Spotify: Which service is the streaming king? Retrieved April 03, 2018, from https://www.digitaltrends.com/music/apple-music-vs-spotify/
Why Music Streaming's Greatest Hopes Are Spotify's Toughest Challenges. (n.d.). Retrieved April 03, 2018, from https://www.billboard.com/articles/business/8231963/spotify-biggest-challenges-music-streaming-greatest-hopes
The way we consume music has drastically changed in just the last couple of years. I remember growing up having to go buy a CD if I wanted just one song from it. I also remember getting iTunes gift cards around the holidays because I wanted to buy music on iTunes. However, with streaming services at the forefront of listening to music, I haven’t even opened iTunes in years. Music streaming services are relatively new with Pandora being the first major streaming service which launched in 2005 (Gil). The idea behind Pandora was that it would use algorithms to create personalized music stations that would appeal to the listener. For a while, Pandora was the streaming service. It wasn’t until a few years later that Spotify launched. In my opinion, Spotify is the most successful business model for a streaming service.
ReplyDeletePandora, Spotify, and Apple Music, I believe are the top music streaming services. There are an incredible amount out there, but these three seem to be household names. Which one is the best business model is that of personal preference. Some people like the setup of Apple Music while others are loyal to Pandora. Spotify is the most attractive to me because not only do they have a student rate, which is a good move because a majority of their target audience is made up of students, but it’s also set up similarly to iTunes. We grew up on iTunes so there is a familiarity with Spotify. Additionally, you can create your own playlists and add whichever songs you choose. Spotify also has about 60 million users which is much larger in comparison to Apple Music which has about 28 million paid users (Reuters). Spotify premium also allows you to listen offline, download songs, and has unlimited skips. I will say, if you’re not paying for Spotify it is almost not worth it. Their free version is quite frustrating and resembles Pandora a bit more.
Pandora, to me, is the streaming service struggling the most. It is not a desirable model. For one, it is only available in the US which is frustrating because if I’m paying for it, I want to be able to use it whenever and wherever I am. Additionally, Pandora has yet to report a profitable quarter (Hu), which isn’t surprising. Pandora’s model resembles different radio stations, therefore, if I pick Harry Styles radio to listen to, it will allow me to listen to his songs as well as songs similar to his. I don’t see the benefit in paying for Pandora when the free version will basically allow me to do the same thing as the premium version. Pandora also has too many ads. I understand they need them, especially for members who aren’t paying for premium. However, they have ads run after every 6 songs I believe and that is one of the most unattractive things in a streaming service. Just by listening to Spotify frequently, I haven’t been able to figure out their ad runs because sometimes I can get through an entire album with 1 or 2 ads whereas other times there’ll be an add after every 4 tracks.
I find that in general, I go to spotify first if there’s something specific I want to listen to. If I’m just looking for background music I’ll go to Pandora. Pandora is always my second choice. I haven’t even seen the setup of Apple Music because I feel like there’s no reason to use that service when I’m perfectly fine with what I have. I will say though, Apple Music is one to keep an eye on because they’re not just a music streaming service. They’ve been doing the Carpool Karaoke with James Corden series as well as exclusively streamed the Harry Styles: Behind the Album documentary. They have content no other streaming service has.
Works Cited:
Delete“A Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services.” Fortune, fortune.com/2017/09/11/spotify-apple-music-tidal-streaming/.
Gil, Lauren. “History of Music Streaming.” Sutori, www.sutori.com/story/history-of-music-streaming.
Hu, Cherie. “Pandora Is Losing Active Listeners, Selling Fewer Ads: What Will New CEO Roger Lynch Do?” Billboard, www.billboard.com/articles/business/8023105/pandora-losing-active-listeners-selling-fewer-ads-ceo-roger-lynch.
Music Industry
ReplyDeleteIf I were to walk around an elementary school and ask the students if they have bought an Album on a Compact Disc they would look I was a ghost. The funny thing about that is that I myself have not purchased many CD’s but I have nonetheless. Music has ran far far away from albums and CD’s and taken a break in the world of downloading and streaming. Apple came out with the iTunes when I was still in Elementary school and since then I have not seen anyone buy a physical album and few but a full album at all. Much like television the music industry is moving into the world of streaming with services like Spotify music and Apple music. Those two streaming services being the largest players they are not the only way you can choose to listen to you music. With Spotify being the top dog as of now, Apple Music is built to last and keep a lid on the industry that it revolutionized when I was in grade school.
Apple music is built to withstand the changing media market. Spotify has had disputes with large artists such as Jay-z, Taylor Swift, and Kanye West. Apple still sells their albums on iTunes for profit and they can stream just as much music as Spotify on a family plan. Streaming music does not define Apple. Making money as a streaming service alone is challenging because you must compensate the artist for their services. Brophy said in his article The Future of the Streaming Economy: 5 Things to Watch (Guest Column) “Streaming services currently take roughly 30 percent of the gross income earned from streaming music for overhead. This percentage hardly covers expenses.” Spotify relies on subscriptions and advertisements. While they were first to break into the market they will have a difficult time hanging around in the competitive streaming market. Because Apple has other services that it can offer its consumers it has a leg up for longevity over Spotify.
Pandora was a service that I believed would be in serious trouble with online radio rather than selecting the song you want to listen to like Spotify offers. Pandora saw an opportunity with the popularity of podcasts. CEO and president of Pandora told Colin Shultz of the billboard.com that they are the largest ad based music site in the world. But that does not stop them from striving for new subscriptions to continue to drive that ad revenue upward.
Now in terms of who will be the top dog moving forward the answer has to be Apple Music. Spotify was first to the music streaming industry but has not been able to hold off Apple’s rapid growth in the United States. The billboard writer Ed Christman predicts that Apple Music will overtake Spotify in users or at the very least have the same amount by July. Apple is an institution. iTunes are on every iPhone as soon as you get it and offers a family plan like I mentioned earlier in the blog making it an efficient choice for a parent to keep all of the members of the family happy. Spotify needing to rely on advertisement revenue and subscribers will be the ultimate downfall when it comes to longevity. Once the larger companies like Amazon and Apple that have the capital to last and have other sources of income will take over the market. It takes money to make money and institutions like Apple and Amazon once they put their mind to something they tend to dominate it with loads of capital and consumer friendly deals that squander smaller businesses.
Works Cited
Delete.
Bromley, Jordan. "The Future of the Streaming Economy: 5 Things to Watch," Billboard 23 Jan. 2018. Web.
Christman, Ed. "Apple Music, Spotify Battle Heats Up Again as Race for US Subscribers Gets Closer," Billboard 5 Feb. 2018. Web.
Stutz, Colin. "Pandora Reports $395M in Q4 2017 Earnings, 25 Percent Subscriber Growth," Billboard 21 Feb. 2018. Web
The music industry has drastically changed over the past couple of decades - from Walkman’s that held tapes to CDs to iPods to streaming services. It’s hard to know which music streaming service is the right one to choose. Personally, I have used Pandora and Spotify and have stuck with Spotify for the long haul. The low student prices and lack of ads and ability to choose my own songs, made it an easy choice for me.
ReplyDeleteI think the streaming service with the most sustainable business model is Apple Music. Although I have never used the service, it seems like it is here to stay. Apple Music does not have a free trial aspect like Spotify, according to Reuters it still has about 28 million users that pay for the service. Reuters writes, “Subscribers can access a catalog of about 40 million songs for about $10 per month—or nearly the entire iTunes catalog, which boasts 45 million songs. Apple has been seeking to set itself apart via exclusive content, striking deals with individual artists such as Canadian rapper Drake, something Spotify is resisting. It also allows users to integrate their own iTunes libraries” (Reuters). I think this makes Apple Music the most sustainable business model. The prices are unreal for the amount of songs that you receive. In fact, after reading this article I might be looking into Apple Music as my next streaming service.
The service that I think is struggling the most is Pandora. I don’t know of many millenials that use this service. It seemed to be more popular in the pre-Spotify era. According to Billboard, “In Q2 2017, when it was still under Westergren’s wing, Pandora had declared to investors that it would prioritize growth and retention of active users over pushing for conversion to paid subscriptions. Yet, the service’s active user base declined once again in Q3 2017 -- dipping by 6 percent year-over-year to 73.7 million active users, versus 77.9 million in Q3 2016” (Hu). That is a pretty big loss considering all the other streaming services that are retaining Pandora’s lost members. Pandora’s prices are very appealing at $4.99 but they do not offer a family plan, which is important to many people. Also Pandora Premium is not offered in the UK or Canada according to iMore (Caldwell). Digital Music News reported in November of 2017 - “850,000 users gone each month. 8 million active listeners have left the platform in nine months. $1 billion lost in four years. Advertising failing to bring any kind of meaningful revenue. Four major financial firms have downgraded the stock. Major competitors have reported rising subscription numbers” (Sanchez). These are horrible numbers for Pandora. The stock has dropped so low that it currently stands at $4.77.
It is hard to decide which streaming services to use but it seems that Pandora is on the out and Spotify and Apple Music are on the up and up.
Works Cited:
"A Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services," Reuters 11 Sept. 2017. Web.
Caldwell, Serenity. “Pandora Premium - Everything You Need to Know Right Now!” IMore, IMore, 20 Apr. 2017, www.imore.com/pandora-premium.
Hu, Cherie. "Pandora Is Losing Active Listeners, Selling Fewer Ads - What Will New CEO Roger Lynch Do?" Billboard 27 Nov. 2017. Web.
Sanchez, Daniel. “Pandora Death Watch: Stock Sinks Below $5 as Users Flee App.” Digital Music News, 11 Nov. 2017, www.digitalmusicnews.com/2017/11/10/pandora-radio-death-watch/.
Streaming services have definitely turned entire industries upside down. Streaming services are the top form of music consumption, and is still increasing its amount of users. Sales are consistently declining and digital listening is steadily increasing (Crawford). Within this, I would classify Pandora as having the weakest business model, and Spotify as having the strongest model.
ReplyDeletePandora’s business model is less attractive than other streaming service models because it lacks control. It is a streaming service based on a radio model so listeners don’t get much control over what songs they are listening to, like they do in other streaming services. The subscription of Pandora is great because it allows users to enjoy music without ads for about $5, but for their best offer that is most customizable users pay $10 a month, which is the same that users pay for Spotify and Apple Music (Reuters). Also, with streaming services where listeners get to have total control over what songs they listen to and can make playlists, there is less of a need or desire to listen to a radio based streaming service.
Something that has been discussed a lot in class is millennials desire for convenience. Pandora’s model is not convenient at all. There is nothing more annoying that listening to music and having limited control over what song is coming on, and trying to skip until you find the perfect one, “younger millennials have turned their ears and their attention to streaming, with many of those polled opting for on-demand options. This shows that not only is streaming in general more favorable, but the idea of radio simply isn’t as appealing to younger music lovers as it used to be for their older siblings, parents, and grandparents. According to the report, on-demand streaming… accounts for 51% of a younger millennial’s daily listening. When considering all age groups combined, that number is cut in half, landing at 24%” (McIntyre).
Millennials want control over what they are watching, and listening to. They enjoy choosing what song comes on next, and the ability to replay their favorite songs. Along with this, millennials love discovering whats new, and Spotify offers that to it’s users.
Spotify has the best model in my opinion because it allows, even free service streamers, the ability to create their own playlists. They also have the largest music library of all streaming services. Spotify is super convenient as it allows users to listen to other playlists, and share music amongst friends in a very convenient way. I also think that because they are so established, they are the most attractive streaming option, “Analysts say its large user base and data gives it the edge in music recommendation” (Reuters). Spotify also dominates in recommending music that is catered specifically to each listener and their streaming history.
Works Cited
"A Quick Guide to Apple Music, Spotify, and More Top Music Streaming Services," Reuters 11 Sept. 2017. Web.
McIntyre, Hugh. “Millennials Aren't Very Interested In Traditional Radio Any More.” Forbes, Forbes Magazine, 12 July 2016, www.forbes.com/sites/hughmcintyre/2016/07/12/millennials-arent-very-interested-in-traditional-radio-any-more/#1aa32a7637c4.
Crawford, Erin. “2017 U.S. Music Year-End Report.” What People Watch, Listen To and Buy, www.nielsen.com/us/en/insights/reports/2018/2017-music-us-year-end-report.html.