Spotify, Apple Music, YouTube, SoundCloud… These popular streaming audio services, along with many others, allow people to easily listen to music or spoken word content online. Users can access this content through dedicated audio services like Spotify or through user-uploaded services like YouTube. These no-cost/low-cost models provide instant access to vast libraries of music, podcasts and audiobooks. Today, users can stream audio on a multitude of platforms, including in their cars, on mobile devices, intelligent speakers, tablets—and on virtually any Internet-connected device. The content itself is becoming more social, with streaming services increasingly looking to connect fans with artists.
Many revenue generation strategies. Streaming audio providers offer free ad-supported services, subscription services, revenue sharing or some combination of the three. Spotify, for instance, offers a free ad-supported tier with limited catalogue access and a subscription tier with unlimited online and offline access. Premium plans can also include access to content before it is publicly released. YouTube is a free, advertising-supported upload and streaming service, but also offers a premium service that is ad-free. Core costs for dedicated providers involve acquiring the music rights from record labels in order to offer vast catalogues. Upload services work differently. While they currently don’t pay license fees for music, they offer to “partner” with content uploaders/creators by sharing revenues after a certain level of viewing hours has been reached.1
Standing out in a crowded market is hard. Differentiation is a challenge for streaming services, with so many services to choose from that all offer much the same content from the major labels. Some services are experimenting with exclusive windows, where an artist’s album is available exclusively on one service for a select period of time. Personalization is a key feature of all streaming services, which use algorithms to identify and suggest content that individual users may like based on their streaming history, geography, preferences, ranking and other indicators. Some streaming services offer both professionally curated playlists as well as playlists compiled by users. Opportunities for users to enjoy social experiences by sharing music with friends or interacting with artists are also becoming an important feature.