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Smart speaker top dog Amazon.com (NASDAQ: AMZN) would have considered adding a third music service to his wallet, an advertising-funded level that would be available for free on his very popular range of Echo smart speakers. This would benefit from its dominant position in the smart speaker market to develop its music user base, potentially threatening Spotify (NYSE: SPOT) In the process. The free layer has been the key to the growth of the Swedish streamer in recent years, especially in emerging markets.
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) The Google subsidiary has just beaten Amazon in the fist.
Source of the image: Google.
YouTube Music is now free on Google Home
Google has just added support for YouTube Music to Google Home speakers, as well as third-party smart speakers incorporating Google Assistant. The free service funded by advertising does not include on-demand access; instead, users will be able to ask Google Assistant to play stations or genres. The company hopes to get more people to its YouTube Music Premium level, which costs $ 10 per month and includes on-demand access to specific albums or songs, among other benefits such as unlimited jump and free play. Listening offline.
The preventive action of Google makes it almost certain that Amazon will do the same with a similar offer. According to recent Consumer Intelligence Research Partners (CIRP) estimates, Google is far behind Amazon in terms of installed base of smart speakers. According to the CIRP, the installed base of smart speakers in the United States is 66 million euros, Amazon accounting for 70% of the most dominant devices and Google remaining far behind with 24%.
A difficult battle to acquire paying subscribers
While Amazon and Google are leaders in the smart speaker market, none is particularly important in streaming music. While Amazon vaguely claims to have "tens of millions" of music clients, most of them are simply members of Amazon Prime who also have access to a limited catalog of Prime Music.
Apple (NASDAQ: AAPL) and Spotify are the mainstays of streaming music, especially for paying subscribers and not for free users. According to the international trade group International Federation of the Phonographic Industry, paid streaming music subscriptions reached 255 million by 2018. Apple Music and Spotify Premium accounted for nearly 60% of that total.
Multiplatform support has been critical to Spotify's success, ensuring that its service is ubiquitous across all product categories. Apple is becoming more and more open to cross-platform support for Apple Music, recently bringing its service to Echos. Apple Music could also arrive on Google Home soon. The availability of Apple Music and Spotify could undermine Amazon's and Google's attempts to develop their own streaming music companies, particularly because of their content discovery capabilities – a competitive field essential for streaming music services – less sophisticated than Spotify.
The giants of e-commerce and research might perhaps add free users, but getting more paying subscribers will be a daunting battle.
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