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The New Music Streaming War Is About Exclusivity

Look out, Spotify: Apple is trying to lure artists like Taylor Swift into exclusive deals for online streaming rights.

The New Music Streaming War Is About Exclusivity
[Photo: Flickr user Self_Same_Self]

Now that we have several music streaming services that boast giant all-you-can-stream libraries for similar price points, companies like Spotify, Rdio, Apple, and Google have found something new to fight over: artist exclusivity.

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Apple is reportedly approaching artists like Taylor Swift and Florence and the Machine about entering into exclusive deals for its soon-to-be-relaunched Beats streaming music service.

Such deals would give Apple’s service a leg up in the already overcrowded music subscription market. When it’s revamped, Beats will join Rdio, Rhapsody, Deezer, Google Play Music, YouTube Music Key, Tidal, and others in a space that is already dominated by Swedish music streaming startup Spotify, which has 60 million users.

Earlier this week, Jay Z’s 1996 album Reasonable Doubt disappeared from Spotify’s U.S. catalog, a sign that the rapper and business mogul is preparing to leverage his own popularity–if not also that of other artists–as an advantage for Tidal, the streaming service he purchased a few weeks back. Shortly after launching, Tidal pushed out exclusive new videos by Rihanna and Beyoncé, clearly testing the waters early to see if exclusive content can lure subscribers.

Last November, Taylor Swift dropped a bombshell when she pulled her entire catalog from Spotify in protest over the service’s free, ad-supported listening tier, which some artists think cannibalizes album sales. Her music remains on other services, and obviously an exclusive deal with Apple would make Beats that much more attractive to Swift fans who can no longer listen to her songs on Spotify. The more of these deals that Apple can rack up, the better off it will be when Beats relaunches. Other competitive advantages include (presumably) native inclusion on iOS devices and Apple’s long history of music industry relationships, a perk bolstered by the arrival of Dr. Dre and Jimmy Iovine on Apple’s payroll.

If a war of over artist exclusivity is brewing in the streaming space–and it certainly feels like it is–It could have some less-than-ideal side effects for customers and the companies themselves.

For listeners, we might be looking at a future in which popular artists are fractured across multiple services, leading to a limited experience, if not pressed to pay up for multiple providers. The dream of paying a monthly fee to access all (or most) of the world’s music may never come to fruition.

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For the companies involved, this battle could get expensive fast. Music streaming companies already have a very tricky business model, with content licensing taking up a massive chunk of their expenses and making it harder to turn a profit. If things heat up here, companies could wind up throwing around millions of additional dollars just to secure the rights to content they hope will lure new listeners their way.

That might not be a big deal for a company with a stockpile of cash like Apple, but for the rest of the companies in the streaming business, shit might be about to get real.

About the author

John Paul Titlow is a writer at Fast Company focused on music and technology, among other things.

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