Beats (Photo credit: Wikipedia)

The much-anticipated launch of Beats Music, a digital music platform backed by Dr. Dre, has this week put the cat among the pigeons… or perhaps the Cat Stevens among the Pigeon Detectives, if we’re to delve into the vast catalogs of music streaming services.

The competition is clearly hotting up as a result of the celebrity-heavy entry, which has been endorsed by everyone from Eminem to LeBron James.

Both Spotify and Rdio have extended their free access options in the past seven days, while Spotify has also added artist merchandise connections and Rdio announced it will be the official music app of the Grammys. Even Pandora, in a slightly different niche of the online music market and busy with its court battle over songwriter royalties, could be drawn into the battle given the focus of Beats on distinguishing itself through superior music discovery features.

With all of this vying for attention and the headlines that accompanied the renewed burst of activity, Beats Music had a few more visitors than it could handle in the opening days of its existence. Beats is still capturing registrations and extending its standard 7 day free trial to 14 days, however, so it should be in good shape as it bursts onto the scene. The recognized brand and celebrity associations aside, though, the platform seems difficult to distinguish from its direct music streaming service rivals.


A Crowded Market

Spotify is currently the industry leader with around 24 million global users and more than 6 million of those paying a subscription fee of either $4.99 or $9.99 for the full-feature version. Rdio has fewer users (even if it won’t disclose the numbers) by all industry estimations, but has carved out its own niche of popularity with those who dislike Spotify. The launch of Google’s All Access Music last year was the last major entry to shake up streaming, although it has subsequently faded into the wider ecosystem of the Play store. And then there’s Deezer, which is nowhere to be found in the U.S. market but is extremely popular in Europe and, we must assume, will show up in the near future.

In short, things are getting kind of crowded in the streaming space.

Moreover, the sector is still at the tail end of its ‘early adopter’ phase, meaning that the potential subscriber base is limited and services are competing for each others customers. Until the mainstream user shows up and a whole new wave of customers are convinced to hand over around 10 bucks a month for access to unlimited music, it increasingly feels as though players in the streaming game are fighting over scraps. They’re also doing so with very similar weapons, as the music selection is much the same (around  20 million tracks on each, with major hold outs like the Beatles not on any of them), the price points close, and the apps kitted out with features that aren’t unique to any one service.

Competition is usually a good thing in any industry, but the music streaming services space can expect to see some exits before a winner or two emerges from the pack. The business model itself still needs to be proven, of course, because the cost of licensing on-demand music is so high, but that’s a whole other blog post. In the meantime, we look forward to seeing if the well-branded new entrant can keep the beat in an increasingly high tempo marketplace.



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