Why Spotify is in Trouble

I like Spotify. I like Apple Music. But between the two, I would go for the latter. The automated content curation is better IMO. But my personal preference is out of this analysis.

Here’s why I think Spotify will lose this game. Nope, nothing to do with Taylor Swift.

1) Getting people to pay for streaming music is difficult enough as it is. How do you get kids to pay for something they have known to be free all along? YouTube already made music free, not to mention bittorrent. Whether it is right or wrong, that is another debate. The fact is, music is already perceived as being free, and artistes make money by performances/endorsements.

2) By not offering a free tier, Apple has effectively pushed the freeloaders like me to Spotify’s servers. This is going to suck up the bandwidth and tilt the free-loader users to paying users ratio.

3) The 3 month free trial is designed to pull away Spotify users. The typical user is not going to pay for 3 months of streaming music when there’s a free trial for 3 months. It’s not that straightforward to disable to subscription renewal on your iPhone. Sneaky Apple.

4) Apple has cash to burn.

So the result is : Apple is not going to make a whole lot of money from this. And Spotify is gonna suffer.


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