Apple, Google and Spotify race to music market
The digital music market is set to be shaken up as soon as this summer as Apple, Google and Spotify race to deliver new services that labels warily hope may reverse a decade of declining revenues. Each of the technology companies is taking …
Context & Ripple Effects
Spotify entered the contest with the credibility of high-profile backing in 2009, while reporting in 2010 framed Google as preparing a cloud-based challenge to iTunes. The three-way race puts record labels at the center of a contest among distributors with markedly different positions in digital media.
For labels, the significance is not merely another music product: parallel approaches from Apple, Google and Spotify offer several potential routes to reach listeners after a decade of falling revenue, while making licensing decisions more consequential.
First-order effects
- Apple, Google and Spotify are competing to bring new digital-music services to market, giving listeners multiple prospective service options as early as summer 2011.
- Record labels gain several potential distribution partners but must weigh their licensing choices against each company’s distinct role in the music market.
Second-order effects
- Google’s previously reported cloud-music preparations make storage and access across devices a competitive front, rather than leaving the contest solely to music storefronts.
- Spotify’s earlier backing gives it resources to contend with Apple and Google, increasing pressure on each service to secure label participation.
Third-order effects
- If labels license multiple competing services, digital music distribution may shift from a single-store model toward services differentiated by platform access and cloud delivery.
- The contest points to growing platform-gatekeeper leverage: music companies’ route to listeners increasingly depends on terms set by major technology distributors.
The trend: Digital music is moving from download storefronts toward platform-controlled services, with licensing determining which distributors can compete at scale.