Spotify and Apple Music have been locked in a back and forth battle for the hearts and minds of the music streaming business that increases in tempo a bit more seemingly every day. Until now, Apple has had the upper hand strategically over Spotify in that its music streaming division was just another reason to sell its hardware, but the balance of power may now shift thanks to Spotify’s new deal with Samsung.
In the new agreement, Spotify has become the “go-to” music provider for all of Samsung’s hardware, according to a company announcement. What that means is that the music streaming service will now be a part of the initial setup process for Samsung devices like smartphones, tablets, smartwatches and even its new smart TVs. Samsung, of course, is the #1 competitor to Apple in the smartphone market, so making it easier for a user to discover the Spotify app on a new phone goes a long way towards acquiring that user as a customer before Apple Music has a chance to.
The Hardware Advantage
This is the advantage that Apple has held over Spotify from the beginning. It’s a simple matter to sign up for Apple Music when you purchase a new iPhone. Plus, your credit card is probably already on file with the iTunes Store, so you’re online with a few clicks if you desire. It may not be quite that easy on a new Galaxy Note 9, but it’s getting close. Even better, the aim is to have a seamless Spotify music experience across all Samsung devices, just as Apple Music is in the Apple universe.
Does It Really Matter?
On the surface this looks like a game changer, but what are the real world ramifications? Actually maybe not as much as you might think.
First of all, once a consumer picks a streaming service, they rarely change, or at least that’s the way it’s been so far. In other words, an Apple Music subscriber most likely isn’t going to go through the hassle of changing to Spotify no matter how easy it is to subscribe on a new phone. The same goes for a Spotify subscriber purchasing a new iPhone. The services are too similar to go through the bother of unsubscribing from one to move to another if you’re already satisfied. Spotify’s free ad-supported tier might be enough to get some people to give it a try (as with Apple Music’s free trial as well), but again, it’s a big barrier to get someone to actually unsubscribe if they’re already moderately satisfied with the service.
Second, the stakes are much lower for Apple than Spotify when it comes to music. Although Apple doesn’t break out data about Apple Music, the revenue generated from the service is probably little more than a rounding error for a trillion dollar company. Apple Music exists to help sell its hardware sales, and that’s where the profit ultimately lies.
For Spotify, music is its only product, so it’s a life and death struggle to gain every advantage possible, even with a favorable market currently behind it (we all know how fast that can turn). From that standpoint, this move was a good one.
For Samsung, it’s a no-lose situation. It’s another edge over Apple (as slight as it may be), it doesn’t conflict with one of its own products, and it positively connects with a brand that’s in the news almost every day.
In the end, it looks like Spotify will come out the winner in this deal, but that doesn’t mean that Apple Music will be a loser.