Sony’s Music Unlimited vs Spotify: the Battle for Streaming takes off

Sony’s release of its Apple (iOS) compatible Music Unlimited streaming service, intended to challenge Spotify’s iPhone app, is a natural and welcome step in line with changing customer music needs and behaviours. Streaming is the future for all forms of digital entertainment, and music is leading the charge.

But I think Sony is missing a trick here. They offer two subscription packages: $3.99/month for listening to pre-determined channels (radio-style?) and $9.99 for access to Sony’s music library consisting of 15 million songs. Spotify’s catalogue has long surpassed 15 million, but more importantly, there is no clear incentive for any one customer group to switch to Music Unlimited.

As I have argued before, Spotify’s finest trick was to get people hooked in the first place by offering free music access. Consumers do not appreciate the value of technological innovation until they’ve tried it themselves. There are high barriers to adoption in place, and only a truly motivating and appealing incentive will push people to give new technology a go – and therefore fully experience the benefits that innovation offers.

Sony is not offering any such incentive. There is no free service to get customers to buy in, so Music Unlimited will struggle to convert iTunes/CD people to streaming. And for those of us who are with Spotify – well, there are no clear benefits to switching. And switching is a pain in itself.

One thing’s for sure: the Battle of Streaming has only just begun.

Sony's Music Unlimited

Spotify: Redefining Music Monetization

I’m a Spotify Premium customer, meaning I pay £9.99/month for unlimited access to virtually all music that is out there – including streaming onto my iPhone. I do not own any music, don’t use the iPod function or even have iTunes. Spotify meets my music needs better than any other provider.

In the pre-Spotify era I would not have dreamed of spending £120/year on CDs or downloads, but now feel it’s providing me with such good value I don’t think twice about it. It is their ability to innovatively monetize the market that seemed like it was fast heading into the abyss of promotions (HMV) and giveaways (YouTube) that I admire most.

It’s true that Spotify’s profitability and financial future is a very controversial issue. Yet no matter how healthy their finances are, it is critical to appreciate the revolutionary nature of their new revenue model. At a time when piracy threatens the music industry an approach that gets customers to pay more for accessing music whilst feeling they are getting better value is not to be sniffed at. The consumer interface of this model is a brilliant innovation, and even if Spotify are unsuccessful at making its financial ends meet other music providers should take note.

Spotify have not yet got it right. But they’re onto something, and the music industry better take notice of this completely new way of engaging with their audiences. After all – iTunes caught the big players unaware, and many (HMV included) have still not developed a strong enough platform to compete with Apple. History might be about to repeat itself.