The Future Is Positive With Spotify
By: Christopher Reinhardt
Tags: Apple Music, Spotify, Amazon Music, Digital Service Provider, Streaming

Spotify, the world’s leading music streaming service. Founded in 2006 in Stockholm, Sweden, became the more favored digital service provider (also referred to as a DSP) by having an early start over competitors. Spotify serves as a “freemium” streaming service, with free accounts available, but the users would have to sit through occasional advertisements and it ultimately wasn’t the best option for mobile users. With unlimited streaming options available under the premium subscriptions, users have the ability to now access over 60 million songs and almost 2 million different podcasts (Spotify Newsroom, 2020). Spotify now has developed a very immersive user experience, with my favorite aspect being the magical playlist generating AI. The AI almost seems to read the users’ minds and explore their favorite genres, following any song with a strain of perfect music immediately after.

To look into Spotify as a business, an important statistic to look at is the payouts that they make. Approximately 70% of their total revenue is distributed to all rights holders which are often the record labels, who then pay out their artists based off of their individual agreements. Of course there are artists who get paid out separately from the record labels, and Spotify has made their platform very artist-friendly here in this year. Although the majority of artists shouldn’t expect their streams to pay the bills, Spotify has a very welcoming connection with independent artists who want to work on Spotify’s platform. On top of that, Spotify is also working every day to further develop their technology and make the overall user experience more enjoyable.

Spotify’s subscription plans are comparable to their counterpart, Apple Music. But as I mentioned before, Spotify has the upper hand by having a free option for all of their users. This holds major weight in the streaming world because you have to think of all of the casual listeners that don’t want to put up the money for an app, but still want to enjoy music from time to time. Apple Music has the same $5 and $10 premium plans for subscriptions as Spotify, as well as a similar $15 family plan. The only other similarity is the choice of music, where the options are almost endless for both options. The upper hand that Spotify also has over Apple Music for subscriptions is the student plan, which also comes with access to a Hulu membership as well as a Showtime membership, courtesy of the Premium subscription (CNET, 2020). Although Apple’s DSP has a very clean interface and is very responsive to its users, Spotify is more personable with the first screen shown upon opening the app consisting of your most recently played music, suggested playlists, your “liked” songs/playlists/albums, and much more. This one difference that may not seem like a major game-changer ultimately makes the experience on Spotify a step above the rest. There is a reason why here in Q4, 2020, Spotify has 144 million paid subscribers compared to Apple Music’s 72 million (Statista, 2020). Just to show how much more severe the gap is between the two, if we count Spotify’s free members as well, there is a grand total of 320 million monthly active Spotify users. I believe that statistic alone speaks for itself when it comes to comparing the two giants.

I also would like to bring Amazon Music into the conversation, as they have around 55 million users on their platform. What Amazon Music has in common with Spotify is the entry level free membership. This membership is nowhere near as accessible as Spotify’s semi-limiting option, where Amazon Music provides a very restricted listening experience. Spotify lets the users choose from any artist while having to sit through minimal advertisements whereas Amazon’s DSP only allows users to pick from top playlists and stations. Once the Amazon Music users upgrade, they will need to pay extra to the “Unlimited” subscription which provides access to 70 million songs while the first upgrade, “Amazon Music Prime” only grants access to 2 million songs from select artists. This factor alone makes Spotify’s subscription a much more attractive offer and that isn’t even addressing the user interface differences. Once again, Spotify has a very comfortable feel to it, where Amazon Music users have to deal with a very choppy experience. As you will read next, I spoke with fellow peers regarding the DSP’s they use and enjoy, and none of them mentioned Amazon Music or any benefits of utilizing the features they provide. This proves to me that in any aspect, Spotify reigns supreme over any other music streaming service.

Although Apple Music is more popular among iPhone users, my focus group was filled with a majority of Spotify users. The ratio was an astonishing 7 Spotify Premium users to 2 Apple Music subscribers. This information came as a surprise to me considering that all of the Spotify users in my group owns and operates through an Apple device. When asking everyone why, the Spotify crowd had 3 common answers consisting of; the UI was very comfortable to use and maneuver, it was around before Apple Music was created, and lastly how incredible the song recommendations were based off of what they had been listening to already. Spotify has an incredible algorithm compared to other DSPs when it comes to recommending songs. Spotify uses an AI system called Bandits for Recommendations as Treatments, or BaRT for short (Analytics India Magazine, 2020). BaRT is the magic behind the incredible song suggestions, but I will touch on that again later.

The focus group listened to an average of 12 hours on their favored DSP. Only 2 people in total listened to podcasts on Spotify, but I found this wasn’t because of Spotify, it was due to the lack of interests in podcasts that these people had. That led me to asking what everyone got the most out of their selected DSP, and the answers were very interesting. A majority of the group answered that Spotify reeled them into new music and artists which kept them listening longer and kept them more engaged in what they were listening to. The other Spotify users said they like to look into the artists they listen to, as most popular songs on Spotify not only have lyrics that pop up, but also a brief, detailed blurb on the artist relating to the track. As for the Apple music duo, they had a keen interest in music videos, which is an exclusive benefit that Apple Music carries over Spotify via its own dedicated section on the platform (The Verge, 2018).

To say Spotify is a driving force in the music industry is an understatement. That is only going to be more true as time goes on while they develop even further as a company. A major example of this is the focus Spotify has had on podcasts here in 2020. The growing catalogue of podcasts has brought in 5% more listeners this year and is only growing, while Apple’s podcasts listens are down 4% (eMarketer, 2020). This is just one direction that Spotify is advancing in while also holding the majority of listeners. I wanted to bring up the most incredible part of Spotify in more detail, BaRT, as referred to earlier. BaRT truly separates Spotify from all of the competition and will continue to do so as long as they are utilizing their advanced AI. BaRT holds an integral position by keeping the listeners listening. This works in the form of Spotify suggesting songs that the user is familiar with and has listened to before, all while staying in the most recent genre that was playing. But when those new songs are introduced to the listener, they fit the criteria of never being heard by the listener, while also fitting the most recently played songs that the user had on (Ditto Music, 2020). This concept works perfectly because it keeps the listener engaged, while never being bored listening to the same music over and over. The algorithm Spotify uses has been absolutely mastered, so the next time you listen on Spotify, make sure to pay attention to how well the suggested songs fit into your rotation.

For myself as both an artist and a consumer, I will continue to support Spotify and stay by their side. The statistics agree that Spotify is more popular, advanced, and user friendly than all of the competitors, and as technology continues to advance, so will Spotify’s systems and procedures. I highly recommend giving Spotify a try if you have never used their streaming services before. They have a wonderful free trial for a premium subscription that’s long enough to get comfortable with their software and find a listening experience that you enjoy most. As for the future of Spotify, they will continue to lead the pack with all of their benefits and perks while developing not only their brand and business, but how to stream music and media from the comfort of your home forever.

Works Cited

Balaganur, Sameer. “How Spotify’s Algorithm Manages To Find Your Inner Groove.” Analytics India Magazine. 01 June 2020.

Savvides, Lexy. Orellana, Vanessa. “Apple Music vs. Spotify: The Best Music Streaming Service for You.” CNET. 03 August, 2020.

Unknown. “How Does Spotify’s Algorithm Work? Streaming Hacks For Musicians.” Ditto Music. 15 July 2020.

Goldman, Jeremy. Vahle, Peter. Verna, Paul. “Spotify Positions for Podcasting, Alexa Asks Follow-Ups, and the Apple One Bundle.” eMarketer. 17 November 2020.

Spotify AB. “Company Info.” Spotify Newsroom. 30 September 2020.

Richter, Felix. “Spotify Keeps Apple Music at Arm’s Length.” Satista. 30 June 2020.

Welch, Chris. “Apple Music Adds Dedicated Section for Music Videos.” The Verge. 29 March 2018.