#024: Context Awareness & The Danger For Spotify
“The biggest fish in the water gets that way by never getting caught”
Spotify is the dominant global force in music streaming today. With over 320 million total active users and 144 million paid monthly subscribers, Spotify has over double the paid subscribers of Apple Music (who has 72 million paid subscribers and is second in the world) (3). With a dominant edge in the market share and their ‘first to market’ history, it appears that Spotify is positioned to be the leader in music streaming for the next decade ahead. However, there is one specific facet to the future of music streaming where Spotify has a clear disadvantage and where their competitors could capitalize to grow their market share and eat away at Spotify supremacy.
Context awareness is, “the ability of a system or system component to gather information about a users environment at any given time and adapt behaviors accordingly… contextual information falls into a wide range of categories including time, location, device, identity, user, privilege level, activity, behaviors and nearby devices/users” (1). This is already a technology that is implemented in every day life, for example with Google Maps or Waze, which assess real time data for weather and accidents to provide updates and changes to your route. So how does this apply to music? There are many music companies already working on malleable playlists where the songs on the playlist can change based on, for example, if the user is at home vs work, with friends vs alone, if their bpm is above or below a certain level, if the listener worked out that day or if they went to their favorite restaurant for lunch. The early days of music streaming was a top-down structure where the curators and editors controlled all of the power to add a song to a given playlist. We have now entered a phase where personalized and algorithmic playlists are beginning to level the playing field based on user preferences. But context awareness will bring music streaming into a whole new ballgame.
If the users are already with Spotify, then why are they still not in the best position to win? The answer is data. Apple Music is backed by parent company Apple, the creators of the iPhone, iPad, MacBook Pro and Apple Watch. Amazon Music is backed by Amazon, the owners of Amazon Shopping, Audible, Echo, Twitch, Ring and Amazon Web Services. YouTube Music is backed by Google/Alphabet, who control Google search, Android phones and the entire YouTube platform. While each of these companies currently trail the number of users that Spotify as acquired, they are uniquely positioned to acquire significantly more data on the listener. Just think about the value of knowing real time what someone is searching on Google, buying on Amazon or their biometric data captured by an Apple Watch. Next to these other conglomerates, Spotify is incredibly narrow in their focus to master the understanding of musical preferences (2). That is the reason why they are currently #1, but we will see if that same narrow focus results in a danger for their future.
Aside from context awareness and the limited user data that Spotify has access to vs their competitors, there are two other areas of concern for their continued future growth. The first is that Spotify is reliant on Apple and Google to distribute their app to iPhones and Android mobile devices. In June 2016, Spotify’s general counsel Horacio Gutierrez sent a letter to Apple’s general counsel Bruce Sewell stating, “we cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors” (4). This 2016 issue was resolved, but it remains a lingering risk over Spotify’s ahead. And the final danger for the future growth of Spotify would be an industry protest over their future payout rates or policies, which I view as the least likely to cause catastrophic damage. The future of Spotify remains very bright. Every company should only wish to have the problem of being the leader in their given industry. However, it is impossible to ignore the future threats that exist or to deny the powerful companies that are backing their competitors. As context awareness continues to develop within music and playlist curation, time will tell if Spotify will be able to compete or if they will begin to lose their edge over the competition.
Rouse, Margaret. “What Is Context Awareness? - Definition from WhatIs.com.” WhatIs.com, TechTarget, 24 May 2016, whatis.techtarget.com/definition/context-awareness.
Kumar, Abhilash. “Global Online Music Streaming Growth Slowed Down in Q2 2020.” Counterpoint Research, 6 Oct. 2020, www.counterpointresearch.com/global-online-music-streaming-growth-slowed-down-in-q2-2020/.
How Many Users Do Spotify, Apple Music and Streaming Services Have?, musically.com/2020/02/19/spotify-apple-how-many-users-big-music-streaming-services/.
Kafka, Peter. “Spotify Says Apple Won't Approve a New Version of Its App Because It Doesn't Want Competition for Apple Music.” Vox, Vox, 30 June 2016, www.vox.com/2016/6/30/12067578/spotify-apple-app-store-rejection.
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JAY’S SONGS OF THE WEEK:
Muntu - “Little Minds”
Masego - “Mystery Lady” (ft. Don Toliver)
again&again - “options”
Tones And I - “Fly Away”
Eric Dash - “Killin’ Your Lies”
