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Competitor analysis of Music Streaming Services
- 1. Competitor Analysis of Music Streaming Services Tiffany Sam tiffanysam819@gmail.com
- 2. Roadmap Changes in Listening Trends Rise of Freemium Determining Competitors/Substitutes Artist/Industry Perspective Recommendations
- 3. Transitions in Listening Habits
- 4. Rise of Freemium Arising hand in hand with on-demand economy and growth of streaming/instantly available media. Network effect shows tension between artists hoping to expand reach from free listeners and wanting more royalty payments from subscribing listeners. Struggle for profitability even with bulky ad revenue
- 5. Determining Competition/Substitutes User Flexibility and diversity of features determine preference
- 6. Spotify – KKBox – Apple - MelOn Spotify KKBox Apple Music MelOn Music Users: 75M Active 20M Subscribers Users: 10M Active 2M Subscribers Users: 15M Active 6.5M Subscribers Users: 28M Active Library: 30M Songs Library: 10M Songs Library: 37M Songs Library: 2.6M Songs Reach: 58 Markets Reach: South Asian Region Reach: 100+ Markets Reach: South Korea Subscription: $9.99/month Subscription: $9.90/month Subscription: $10/month Subscription: $5.60/month Valuation: $8.5B Raised: $104M Est.: $2B by 4/2016 Est.: $2.1B
- 7. Artist/Industry Perspective Royalties vs Exposure Tension “Market price” for streaming services around $10/month boils down to minimal royalties for artists with large cuts going to record labels Potential for services to provide multi-dimensional listening Apps compete on size of library as well as secondary/tertiary features such as artist-created playlists and personalized messages
- 8. Recommendations International Expansion Better Use of Database Artists and Royalties Ad Revenue Move to Wearables/Health and Fitness Purpose of Record Labels Critical Question: How can these global or local services best suit themselves to face these predicted changes in the music streaming industry?
- 9. Moving Forward Future of global licensing? Impact on radio? Pandora vs Apple Music DJs vs Spotify “radio” Use streaming data to isolate concert hotspots/seasons Accessing younger crowds or older crowds Twitter/Instagram/Vine over Facebook Distrust in over-curation
- 10. Index Changes in Listening Trends Rise of Freemium Determining Competitors/Substitutes Service Breakdown Artist/Industry Perspective Recommendations Moving Forward
- 11. Works Referenced http://www.inside.com.tw/2013/09/27/kkbox-vs-spotify http://www.straitstimes.com/singapore/what-you-need-to-know-about-kkbox https://press.spotify.com/us/information/ http://www.billboard.com/articles/business/6576153/merlin-partners-with-asian-streaming-service-kkbox http://www.pivotl.com/2015/09/25/5-global-music-services-investors-are-tuning-into/ http://s0.thejazzline.com/tjl/uploads/2015/03/nielsen-2014-year-end-music-report-us.pdf http://static.trustedreviews.com/94/0000334bf/8297/spotify.jpeg http://iphone.three.com.mo/public/eng/images/4Gs/3services/icon_kkbox_l.jpg http://www.idigitaltimes.com/apple-music-android-release-date-app-launch-window-could-be-revealed-september-iphone http://timerichworryfree.com/5-best-ways-to-get-your-music-heard-online/ http://logok.org/pandora-logo/ http://zuriapps.com/wp-content/uploads/2014/11/8tracks-logo.jpg http://www.theguardian.com/technology/2015/jun/10/spotify-apple-music-75m-active-users http://techcrunch.com/2013/04/29/spotify-may-need-to-be-more-asian-to-dominate-region/ http://www.macrumors.com/2015/06/10/spotify-75m-active-users-526m-funding/ http://www.snepmusique.com/wp-content/uploads/2015/04/Digital-Music-Report-2015.pdf https://www.techinasia.com/taiwans-kkbox-spotify-asia-spotify-existed http://asia.nikkei.com/magazine/20140814-The-odd-couple/Business/Music-streamer-KKBox-keeps-its-cool-even-as-competition-heats-up?page=2 https://www.pehub.com/2014/08/kkbox-snags-104-mln-from-gic/ http://www.theverge.com/2015/11/17/9749050/pandora-rdio-spotify-tidal-apple-youtube-streaming-music http://www.macworld.com/article/2934744/software-music/apple-music-faq-the-ins-and-outs-of-apples-new-streaming-music-service.html http://www.theverge.com/2015/10/20/9572667/apple-music-subscriber-count-number-paid http://seekingalpha.com/article/3314495-apple-music-a-2-billion-run-rate-business-by-april-2016
- 12. Works Referenced (Cont) http://www.statista.com/statistics/321559/deezer-paying-subscribers/ http://www.billboard.com/articles/business/6836589/melon-south-korea-biggest-music- subscription-service-acquired-kakao http://www.reuters.com/article/us-kakao-m-a-loen-ent-idUSKCN0UP01620160112 http://techcrunch.com/2015/12/01/spotify-claims-streaming-music-throne-worldwide-but- pandora-is-still-top-service-in-u-s/#.bzbrigr:c4RL http://www.upi.com/Business_News/2015/12/01/Spotify-named-most-popular-music- streaming-service/8211448983691/ http://taylorswift.tumblr.com/post/122071902085/to-apple-love-taylor https://encrypted- tbn2.gstatic.com/images?q=tbn:ANd9GcSxJKrz4eIY0AifGzCSudklu6yysUzMwptslKvPevI p4c8mtw_L
Editor's Notes
- This deck is designated as primarily informational, including introductory information regarding the industry and specific firms discussed.
- It should come as no surprise that the streaming world is gradually and continually taking over other forms of media consumption, especially with the decline of CDs and other physical forms of music collection.
- However, being a music streaming service is far from homogenizing. Above, I have plotted various streaming services according to user flexibility and diversity of features offered. From the user’s perspective, these two play determining roles in which application to use. On the supply side, these two dimensions often drive higher-level decisions related to marketing, backend operations, and more. For example, 8track’s follower/ing based listening as well as quirky branding make it conducive to launch the forum function as it did, allowing users who are already connected through listening to chat about their tastes and more. The strength of local competitors must not be overlooked, but for the sake of the + graph they have been excluded.
- While Deezer proves competitiveness with around 6.5M subscribed users,
- International Expansion Library and Habits: Bill paying, Karaoke style rolling lyrics, acquisitions by/partnerships with messenger applications Asian markets: local artists hold 70-85% of market share, Western artists are minority – local services have a clear advantage in negotiating with these various local labels. also high levels of piracy and lower willingness to pay for streaming and downloads Better Use of Database “Discovery” function to provide highest satisfaction of listening, can be good leverage with smaller/indie artists Artists and Royalties Stabilize market norms to create profit maximizing strategy for all parties, may need to wait for streaming’s plateau in growth Ad Revenue Shift to multi-media and curated ads (location/demographic targeted) Move to Mobile-Wearable? Health/Fitness creation of workout playlists, moving towards “lifestyle” takeover The Purpose of Labels Will streaming services be able to manage concert/offline interactions? Will record labels still be necessary and if not, how will that affect things like royalties and revenue sharing?
- As global and local services compete, how will the future of licensing look? Will global fans be able to listen to local music? If not how will that demand be satisfied? The on-demand generation must find balance with choosing their own songs and radio/DJ selected playlists – which will win? Heavy digitalization comes with huge data sets that can be used for high-revenue generating, offline events Millennial hype aside, how can services better cater to the head and tail ends of their demographic spectrum?