Is Spotify Starting To Lose Market Share?

Since we write about mostly indie artists here at the Third Eye, I’ve been more interested in the music business, especially how it seems increasingly brutal for indie bands. I guess that’s always been the case, but streaming services have seemingly made it worse. Tom recently wrote about this while discussing the pros and cons of Spotify for artists. So, I sometimes check the news for what’s happening with the primary music streaming services.

That’s why I was surprised to read recently about the growth of Amazon’s music services and how it’s gaining on Spotify. A recent report interviewed more than 4,000 Americans about which free or paid music services they had used at least once in the past month, and Amazon music was tied with Spotify at 35%. This includes listeners to Amazon’s Prime Music service, its paid Music Unlimited service, and then both the free and premium Spotify versions.

The report said Amazon Music has surpassed Apple Music (used by 19% of U.S. listeners). Pandora is used by 23%, and SoundCloud’s at the bottom with 10%. The top-ranked platform for music in the survey was YouTube music at 61% (and they also pay artists the worst). Another interesting finding was that 17% of U.S. music listeners are creating music themselves, and 19% aren’t making music but are interested in doing so. The percentage of American music listeners saying they pay for a streaming service also fell from 66% in 2021 to 65% in 2022.

The findings from the report don’t precisely match up with overall subscriptions, though. Spotify is the most-subscribed streaming service, with 31% of the market share as of 2021. However, its market share is declining, down from 33% in 2020 and 34% in 2019. Spotify grew its subscriber base by 20% in the second quarter of 2021, but Amazon and YouTube Music grew faster.

Spotify is also like many tech companies right now that are laying people off because the economy is taking a dump. Spotify announced in January that it’ll lay off about 6% of its employees to lower costs (the company has approximately 9,800 employees). None of this inside baseball is particularly relevant to bands, but I work as a journalist and am also interested in the business side of things. All these music streaming services are publicly traded on the stock market, issue quarterly earnings reports, have shareholders, etc. It makes the fact that they pay artists so poorly even more of a kick in the nuts.

Here’s hoping that the music streaming model eventually becomes fairer for independent bands and musicians and that the business models of big streaming services like Spotify and YouTube get re-arranged.

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