From the gramophone to radio, and the cassette tape to streaming, the way we listen to music has evolved at a rapid rate. It’s hard to pinpoint the exact moment that music streaming was born, but back in 2005 it was apps like Pandora that launched the service into the stratosphere.

Pandora’s music recommendation function was pioneering, and paved the way for streaming services we use today, like Spotify.

Here we take a look at how music streaming apps have evolved, and how digital marketers can make the most out of them.

Why Growth Doesn’t Always Equal Success

Since its launch in 2008, Spotify has become one of the most popular music streaming apps. So it’s no surprise that Spotify’s net cost trebled between 2013 and 2014.

However the company’s 15m paying subscribers aren’t enough to slow down the losses being made. As Spotify’s revenue increases so does its operating costs, highlighting the current struggle to make streaming music profitable.

Unlike their music streaming rivals TIDAL, Spotify continue to provide their free on demand service, despite pressure to end it.

TIDAL Wave Of Disappointment

TIDAL, the new streaming music service from Jay Z and his fellow musicians, isn’t quite the hit they thought it would be. In fact it’s proving to be a huge disappointment. Executives at the company have been fired and the app’s ranking has plummeted from the top 20 in the US App Store to below 700.

CEO Jay Z recently took to Twitter to defend the company’s position: "TIDAL is doing just fine. We have over 770,000 [subscriptions]. We have been in business less than one month."

Music To Marketers Ears

Having established how each platform has grown, let’s consider what this growth means for marketers.

TIDAL

Like any new tech start-up, time is a crucial element. With Jay Z on the defensive the company is gaining more exposure, but in the end it will take time for the app to become established and trusted.

You’ve got to consider the value of app’s USPs, but with such huge rivals to compete against, TIDAL may have finished before it’s even had time to start.

TIDAL doesn’t currently offer a free, ad-supported service, but with initial take-up rates so low that could swiftly change. Digital marketers need to keep TIDAL on their radar, because the tide could turn at any time.

Warner Music Group

For the first time since its launch, Warner Music Group’s streaming revenue is surpassing its subscription sales.

As Warner CEO Stephen Cooper stated, “The rate of this growth has made it abundantly clear that in years to come, streaming will be the way that most people enjoy music.”

Now is the perfect time for digital marketers to make the most of Warner Music Group’s surge in streaming audience and connect with their valuable customers.

Apple

Apple’s new Beats-based music streaming service is yet to be launched but it’s already causing a storm in the industry.

Rumoured to be released as part of the iOS 8.4 upgrade for the iPhone, iPad, and iPod touch, the app could include personalised playlists, cloud-based music storage and the ability to customise specific elements.

Apple’s new streaming service won’t offer a free, ad-supported option, instead opting to provide a premium-only service.

Whilst this may at first seem like a blow to digital marketers wanting to maximise reach through ads on the app, this is a platform that’s worth keeping in mind for the future. The digital landscape is constantly changing and the situation could adapt in the next 12 months.

Beatport

SFX Entertainment have recently launched their own music streaming service that stands out against its competition for two main reasons. With no subscription needed, the service is free and even better for the user, it’s also advert free.

Whilst we hope Beatport succeeds, without advertisers the app may struggle to find its revenue stream.

Beatport recently announced that they will offer banner adverts for new release to the biggest bidder. So it’s a great time for digital marketers looking to increase brand awareness to get on-board with the music mogul.

Spotify

Spotify are rumoured to be launching a video steaming service. Although this will add yet more costs onto the company’s business model, it could bring in a much-needed stream of revenue through advertising.

According to the music streaming service, people spend 21% more time on mobile apps, and 79% more time on music streaming apps than they did last year.

Spotify’s free service is supported by ads, so it gives digital marketers a fantastic opportunity to reach the audiences that matter most to them. Recent studies reveal that Spotify’s audio ads deliver a 60% lift in ad recall compared to industry benchmarks, making their advertising platform an invaluable tool in the marketing mix.

To summarise, digital marketers have a wide variety of options to engage and advertise to targeted audiences using these apps. Streaming music is now the primary way that people listen to their favourite songs, so music streaming companies, their apps and digital marketers utilising them must evolve to survive in the ever-changing and extremely competitive market.

 

By James Tee, Digital Marketing Executive at Big Orange Software.

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