The battle lines for music streaming superiority appear to have been drawn, with juggernaut Spotify rolling out a special deal of 3 months of streaming for just $1. The offer seems too good to be true, but it is part of a bigger picture that sees Spotify trying to tighten its grip, whilst Apple hopes to take a large slice of the pie.
Spotify is the most popular music streaming service in the world. With streaming taking over form the more traditionally popular method of downloading, there is plenty of potential in the market, and Apple wants to force its way in, with plans to unveil their new streaming service in June.
Spotify works on two levels, a free ad based subscription in which users pay no fees, yet listen to adverts are regular intervals. A full service is available for $10 per month, which is ad free, along with several other features such as improved audio.
The ad-supported users have reached 45 million subscriptions, with the subscription based service pulling in 15 million. The ad based service comes with a much lower level of royalties for the artists, just ask the likes Taylor Swift and you will know just how heated the topic is becoming. Upon hearing of Apples new strategy, things could be getting a lot uglier.
Apple acquired Beats Electronics for a record deal of $3 billion, which includes not only the famous brand of headphones, but the streaming service it created – seen as the main reason for the deal by man. Now part of the Apple brand, a brand new Beats streaming service is expected in June, and they appear to be doing everything they can to damage Spotify.
Rumour has it that Apple are pressuring music labels to abandon Spotify, and in particular the free-tier system. A renewal deal is on the horizon, and should labels pay notice to Apple, a lot of music could be lost. This will be a severe decrease in the amount of users for Spotify’s free service, due to a decrease in music that is allowed to be played for free.
A result, Spotify are rolling out this deal in the hopes that it will lure in subscribers to their premium service, before risking losing them to Apple in the coming months. Whilst they will take a hit for offering the service for so little, it is part of long-term plan to increase premium subscribers over a longer period.
They tried something similar in the United States around Christmas, and actually saw an increase in long term subscribers. Going up against Apple could be a daunting task, with the name recognition of both Apple and Beats, along with their endless pool of resources, Spotify could be making on last defiant act against their competitors.
The Pro Audio Web Blog