Spotify may soon dominate music the way Google does search — this is why

File 20170806 2414 1vymiy4
From European beginnings, Spotify looks set to take the crown of the #1 music streaming service in the US later this year.
dougliz/flickr, CC BY-SA

Paul X. McCarthy, UNSW

While competition online starts the same way as that in offline markets, my research shows it often settles very differently online.

Both have seen lots of competitors emerge in a new area underpinned by new technologies. But online, consolidation ends in a high-stakes winner-takes-most “title fight” between the two strongest players.

Read more: Why there’s no Pepsi in cyberspace

In search this was AltaVista vs Google, in social media it was MySpace vs Facebook and in business networking Spoke vs LinkedIn. The result is that the victor at this critical juncture goes on to dominate their corner of the market and becomes almost unassailable in that space.

Facebook vanquished early industry leader MySpace in Social Media.
Source: Online Gravity

The evidence is mounting that Swedish music streaming company Spotify is on the verge of seizing the crown in music.

Pandora has been for some time the dominant real-time streaming service in the United States. Three years ago it had a clear lead but competition from Spotify appears to be stronger than ever. Pandora was a mass market pioneer in the online “radio” style streaming format where users pick stations and the music is compiled for them, whereas Spotify adopted an on-demand model which has prevailed.

Spotify has created many features that has made it popular with users like the ability to create and swap playlists.

Read more: How data is transforming the music industry

In the United States, Pandora has more monthly active users than Spotify, Shazam, Soundcloud and Amazon Music, according to App Annie. While Pandora has dominated in the United States its success in other markets has not been so strong. In Australia and New Zealand, for example, it recently closed its service and Jane Huxley, former managing director of Pandora Australia and New Zealand who resigned in March was just announced in the same role at Spotify.

Over a decade in the making, could 2017 be time for Spotify’s time in the Sun?

Spotify also has a massive global subscriber base – many of whom are paying higher per user fees than Pandora. It now looks likely to take the global lead for three reasons:

  1. Explosive new user growth
  2. Growing investor valuations
  3. Attraction of technology talent

Explosive new user growth

While the category of streaming music still is in its infancy, new users are critical to success. And this is where Spotify is killing it. In the context of Apps, new users are all about downloads and for the best part of 2017, Spotify has taken the crown of #1 most downloaded music app in the United States on iOS. So while Pandora is still currently ahead in monthly active users, at this rate it won’t be long before Spotify takes the lead overall.

Spotify now #1 in the United States in Music App Downloads.
Online Gravity with data from App Annie, 2017.

Growing investor valuations

Investors always have a forward looking view. Companies are valued not on what they are doing today but what investors expect from them in terms of future growth and performance. While still private, and with rumours of a stock market listing later this year, Spotify is now valued by investors at more than US$13 billion – over five times the current value of publicly listed Pandora which is currently US$2.3 billion.

Attraction of technology talent

The success of all online ventures is fuelled by technology talent. And many of the people in the tech sector have their antennae tuned to who is hot and who is not.

You can now use data to examine which companies are the most desirable destinations for software developers and tech talent by looking not at what people say, but where they go. When people leave one company to go work for another that creates a data point, and when you have lots of these that’s a trend.

Using the technology talent movement metrics we can see also Spotify took the lead from Pandora in the United States in September last year.

Spotify overtakes Pandora as a Tech Talent Destination of Choice.

How competition evolves

Initially new segments of the digital economy emerge in the same way as new segments of the traditional economy — with a vibrant explosion of new life and competition. Consider the car industry where there have been more than 3,000 car companies formed in the US alone over the last century.

Birth of the car spawned intense competition and hundreds of new startups.

Under the influence of competition, these thousands of companies have now winnowed down to ten major global companies, each with sales of more than US$100 billion.

The way competition evolves online is akin to how the force of gravity has formed our solar system from lots of smaller rocks over time into clear planets with moons or satellites but, notably with no dual or triple planets. I refer to this phenomena as “Online Gravity”.

Online Gravity and three phases of industry evolution: Offline vs Online.

*Except China, Russia and South Korea.

Consider web search where the now-dominant Google launched in 1998. It was about the 16th search engine launched — after Infoseek, Alta Vista, WebCrawler and at least a dozen others.

Where are today’s title fights?

We can see competition impacts clearly with the benefit of hindsight, but what about “title fights” that are currently underway?

Has Uber gone to point of market dominance beyond competition, or is it a MySpace awaiting Facebook, perhaps Lyft or another yet to enter entrant to steal its crown? Who will win the title belt for outsourced online labour? Will it be or UpWork?

The prize for understanding who is going to win is large, and explains the premiums venture capitalists and public market investors alike put on companies that are favoured title fight winners.

Could Tesla become the Google of electric vehicles? Many people think so or that its battery technology advances could lead it to dominate in broader distributed energy industries of the future.

Read more: It’ll take more than tech for Elon Musk to pull off audacious new Tesla master plan

Much has been made in the media of the market value of Tesla now overtaking both GM and Ford, making it the most valuable US car maker. This is despite the fact Tesla sold less than 100,000 cars vs 10 million at GM and that its revenue is less that 5% of GM and Ford’s. And it’s still losing money.

Telsa’s market value overtook that of Ford in March and GM in May.
Y Charts and Online Gravity

Could Tesla’s rise in market valuation have been predicted? One interesting new data source that may shed light on this is technology talent.

Long before Tesla overtook GM in market value it won the hearts and minds of US software developers.

Salary monitoring service Paysa also charts the movement of technology talent. It ranks the desirability of companies as employers, using data on technology talent migration it gets from LinkedIn and other sources.

The ConversationHere we can see that Tesla overtook GM in terms of desirability as a destination for tech talent some four years ago and has remained ahead ever since. This coincides with Tesla’s subsequent rapid rise in enterprise value as reflected by the stockmarket.

Paul X. McCarthy, Adjunct Professor, UNSW

This article was originally published on The Conversation. Read the original article.

Miss American Dream – Britney Spears

The link below is to a rather large article concerning Britney Spears, which I haven’t read as of yet. I do intend reading it though. Since it is mean’t to be something of a biographical piece I thought it might be interesting. So, sooner or let I’ll have a read – hopefully over the next week and see what I think.

For more visit:

Bed of Roses

I am not your average Joe and that is no take on the current Australian Treasurer and has nothing to do with the budget just handed down. I am just an average guy too be sure, but that wasn’t quite what I mean’t. I don’t fit into the average stereotype of an Aussie guy, whatever that may be. I’ve never seen myself as fitting into the normal, conforming to what the normal guy should be like or, if you prefer, what he is like. I am myself, a strange breed of guy perhaps. I am a complex person, with many facets – a many-sided individual. Hopefully none of those sides are terrible or dreadful, though I am sure I don’t quite measure up to what people would have me to be and I certainly don’t measure up to what I would like to be – and lets not even go to what God would have me measure up to, for that is a standard beyond what I can ever hope to achieve, though thankfully another has done that for me.

No, I am a different type of guy to the normal – for I am an individual transformed by grace, but none-the-less somewhat different to must Christian guys I have come across also. That could however be simply a case of my own perspective, without the ability to see how other guys see themselves. Perhaps I am closer to the norm than I think, maybe I am just a little bit more honest about who I am – who knows? Not me, that’s for sure.

‘Your love is better than ice cream
Better than anything else that I’ve tried’

I do not remember when I first saw the movie ‘Bed of Roses,’ but it was sometime ago now. It doesn’t have that stellar cast that other movies have perhaps – the two stars are Christian Slater and Mary Stuart Masterson – yet it is a movie that has had an impact on me over the years. It appeals to me in some way. Perhaps I am too romantic for my own good and history has probably proven that to be the case, if I am reading the evidence correctly. This isn’t the type of movie that guys own up to liking and perhaps there are very few who actually would like a movie like this. But you know, I care very little about that.

I do have this ‘romantic’ streak about me – not that I’m about to try and prove my case here. Wouldn’t that be an awful, messy thing. Trust me, it more than likely would be. I may have that romantic streak in me, but I also seem to mess things up pretty good also. I have a whole heap of special memories – yet that is all they are, memories. They are often happy memories, though they all tend to end with a tinge of sadness – especially the last. I guess that may be why Bed of Roses is even more poignant to me now than when I first saw it all those years ago.

I decided to watch it again tonight. It was the first time in a good many years that I have. It still has the same effect as it did the first time and I still have this strange attachment to it. I am even now listening to the soundtrack (yeah, I bought it a while back to remind me of the movie). Some of the music is a little light on substance I guess and has that real eighties feel (from which my music has come), but it has that very sentimental touch.



I love Spotify, however the amount of bandwidth it uses is incredible – even when you have the music saved locally. So as a consequence I don’t use it as much as I would like to – perhaps I should use the Bigpond service for music as I don’t think that counts towards downloads. I do like Spotify though and would like to continue to support the service.

Just recently I have been on an Ebay splurge, buying up cheap CDs of music I liked from the 80s especially. Yeah, I’m an 80s type of music guy – nothing too heavy though. Well, there is the odd bit of heavier music I don’t mind, but that is a very rare thing. Really I’m a ballad guy – love ballads, good ballads. Maybe I’m a romantic at heart, I don’t know. If I am it hasn’t done me a lot of good over the years. I’ve always wanted to be able to play the piano – to play ballads. I can’t, I never really learnt how to play it. Still, it is part of that romantic image I have of myself – lol.

So yeah, I have been buying a bit of stuff on Ebay in the last couple of weeks. ‘Why pay full price when you don’t have to?’ – I always say. You can pick up good CDs for a few bucks on Ebay and that will do me just OK thank you very much. Sure, I might not get everything I might buy at a dedicated music store, but I get more than enough to keep me happy. I can also buy stuff I normally wouldn’t – because it is so cheap. I do have some music that I wouldn’t buy in a pink fit at Sanity or the like, stuff that I bought on Ebay to see what it was really like. I suppose I could put Janet Jackson into that category, though sadly I have become immune to it and actually like the odd song. Did I just say that – it does get worse, but I don’t know you all that well so I’m not prepared to put it all out there.