Competitive advantages: Why the fight for streaming market leadership is great news for the music biz

Spotify

The global struggle for streaming supremacy has got the digital giants at each other’s throats. And you know what? That’s exactly where the music industry wants them.

The biz’s digital music history is littered with self-inflicted mistakes, from the missed opportunity to buy Napster to the iTunes deals that handed Steve Jobs an effective download monopoly.

But not enough credit is given to the modern industry for the way in which it has orchestrated an incredibly competitive environment for the streaming age.

So Spotify may be the current market leader, but even its $25 billion IPO may not be enough to keep it ahead of Apple Music in America for much longer. Meanwhile, YouTube’s long-awaited announcement that its new subscription service will launch this week should give new impetus to the sector, especially internationally, where services such as Deezer (itself reconsidering an IPO), Tencent and Saavn may yet have a decisive role to play.

Even better, the search for an edge has driven the streaming services to innovate rather than imitate. Amazon clearly thought long and hard about how it could make an impact, and its whole-hearted embrace of voice control has opened up key new demographics. YouTube Music’s clever combination of video and music had other services scrabbling to add video before it was even announced. And the opening of a new front for in-car audio is also guaranteed to bring all sorts of fresh thinking to the party.

There is, of course, still a long way to go. But YouTube global head of music Lyor Cohen speaks passionately about the need for diversity of distribution and it seems highly unlikely that any one player will dominate streaming the way that iTunes did downloads. Even Daniel Ek no longer sees streaming as a "winner takes all" market.

That makes licensing negotiations easier for the labels and, with all the services investing in curation and discovery (i.e. exactly the things the biz wants them to), streaming may yet deliver much more than just the increased revenues that have already put the biz into recovery mode.

The biz, in short, has gone from cutting its own throat to watching others indulge in cut-throat competition. Pass the popcorn…

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