Contact Us


Disruptive Competition Project

655 15th St., NW

Suite 410


Washington, D.C. 20005

Phone: (202) 783-0070
Fax: (202) 783-0534

Contact Us

Please fill out this form and we will get in touch with you shortly.
Close

Fighting For Your Ears

· August 8, 2017

Categories

Last week Spotify revealed it’s going to promote podcasts on its streaming service, providing yet another example of the fierce competition underway for your ears. Indeed, between music services, audiobooks, and podcasts, the fight for listening time is only heating up.

When Apple’s multimedia player, iTunes, was released in 2001, competition across these different types of audio was not as evident. When iTunes transformed into a digital multimedia store, this changed.

Originally, however, iTunes was a simple music player and Napster, an unlicensed peer-to-peer file sharing service, which allowed users to send audio files back and forth, was the closest thing to a digital music store. While Napster quickly ran afoul of U.S. copyright law, the overwhelming response to the product demonstrated enormous pent-up demand for a licensed digital audio service. Eventually iTunes emerged as not only a service for purchasing songs and managing files on music devices, but one for listening to music.

Offering both a music player and online store in one, centralized site was appealing to consumers and, before long, iTunes offered other forms of multimedia, including audiobooks, podcasts, TV, and movies.

Digitizing the music store fundamentally changed how we consume audio — namely, instantly and efficiently. But, most importantly, it changed the nature of competition; by allowing users to digitally access and purchase different types of audio on iTunes, it placed these once-separate verticals in direct competition with one another.

Competition for listeners has only become more intense in the years following iTunes’ transition as other companies, attempting to differentiate themselves from and compete with iTunes, offer new forms of audio.

For example, Google Play (thanks to its acquisition of Songza) provides users with activity-specific playlists — some as specific as “Retro Cocktail Party” (my personal favorite). Perhaps in response, Spotify similarly offers activity-specific playlists, in addition to playlists based on genre, trending music, and the listener’s own music tastes. Pandora, meanwhile, offers personalized stations based on users’ music tastes, but also enables listeners to enjoy comedy and news programs.

Visual elements are also being incorporated by audio streaming services. Tidal, a subscription based music service, made a name for itself by offering high-definition, exclusive music videos by top artists.

SoundCloud, which differentiated itself by allowing its users to post original audio — such as remixes, podcasts, and original music by amateur and semi-professional musicians — currently appears to be trying to diversify its audio so as to better compete with these other services.

Although SoundCloud made a name for itself by offering a free, open creator platform, its latest service, Go+, is a $9.99 per month service that gives listeners access to “30 million premium songs from big-name artists like what you’d find on Spotify or Apple Music.”

Though featuring popular artists and musicians has been a successful way to hold onto profits in the past, Go+ has been unsuccessful, leaving SoundCloud continuing to try and figure out how to remain competitive.

Meanwhile other services are turning to a typically unprofitable audio medium to gain a competitive edge: podcasts.

Podcasting’s inherently DIY nature — anyone with a laptop and microphone can do it — made it ideal content for SoundCloud. Lately, however, other audio streaming platforms have begun producing their own podcasts.

This March it was reported that “Spotify and Google Play each launched their first original music podcasts, exclusive to their platform (Showstopper and City Soundtracks, respectively).” Sony Music Entertainment is also apparently experimenting with podcasts, as is Anchor, “a fast-rising podcast app that layers community features on top of audio streaming.”

Even Apple, which started offering podcasts in its iTunes music store in 2005, appears to be renewing its interest in podcasts. This April Apple rebranded its iTunes Podcasts application, dropping the “iTunes” and calling it simply “Apple Podcasts.” The change is believed to be part of the company’s new podcast features teased at earlier this year.

With approximately 15% of Americans (~42 million) listening to podcasts every week, experimenting with this new media seems a smart move.

Such a tactic is illustrative of the broader theme in the audio industry: Winning listeners in this space requires incorporating, and repurposing, audio content. Simply distributing popular songs will no longer secure you a competitive edge, as even Apple evidently realized, adding podcasts to its repertoire shortly after it released iTunes. Now top audio companies provide tailored playlists, podcasts embedded with the latest hit songs, and high-definition music videos to win your ears.

So in what form will audio appear next? My guess: virtual reality. (Check out our previous post on how the music industry is already incorporating VR.)

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Innovation

New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.