We live in an era where music is no longer a tangible product but a stream, a sonic wave ready to cater to our every musical desire with just a tap.
With over 30% market share, Spotify is now the undisputed queen of this new world. But, as is often the case in kingdoms, not all that glitters is gold, and the Swedish company is not without its critics and difficulties, despite its apparent monopoly on the streaming market.
The great gig in the sky
Let's start with the positive notes, the ones that make us love Spotify. The service is a true musical paradise. Whether you're nostalgic for the 80s, an indie rock fanatic or a jazz devotee, Spotify serves you everything on a silver platter, with personalisation that borders on the magical.
Thanks to sophisticated algorithms, the platform not only knows us, but almost anticipates us, suggesting tailor-made playlists that seem to come straight from our minds.
Innovation is one of the key pillars of Spotify's growth. The platform has transformed the way we enjoy audio content, investing heavily in podcasts and introducing cutting-edge features such as DJ AI, a new technology, developed in collaboration with OpenAI, that promises to elevate the listening experience to a higher level of interaction and personalisation.
Spotify AI DJ
And then, there is the global reach: Spotify is not just a Western phenomenon, but a force present in almost every corner of the planet, with particularly strong growth in Latin America and Asia.
The dark side of the moon
As with any good story, however, there is a downside. Spotify is not without its critics; in fact, it is full of them to the brim. Many artists have stood up to denounce the low royalty income. It is a thorny issue, which brings to light a wider problem: how much is it fair to pay those who create art in a world dominated by streaming giants? And Spotify, with its dominant position, cannot but be at the centre of these controversies.
I think it can be said without fear of contradiction that Spotify has also contributed, albeit indirectly, to the destruction of the traditional music market. Record companies, which once dominated the industry unchallenged, have found themselves having to cede much of their power to streaming platforms.
The centrality of the single track, the reduction of physical album sales and the disintermediation of artists, who can now publish directly on platforms, have disrupted the business model of the traditional music industry.
Rough Trade shop, London
Against this turbulent backdrop, we are witnessing an astonishing renaissance of vinyl, which, despite its niche numbers compared to streaming ($1.2 billion in US sales in 2022 versus $13 billion for streaming), continues to grow in unexpected ways. In an age dominated by digital and immediacy, vinyl has become a symbol of romantic resistance to change. Its tactile appeal, warm sound and the physical experience of owning a record represent a growing niche, challenging the unstoppable march of streaming. For many, vinyl is more than a music format: it is a rebellion against the ephemeral experience of ‘fast music’, a way to recover a more authentic and deeper connection with music.
Double bubble
There is also another, less obvious, but equally significant aspect: the algorithms that we love so much for their ability to suggest the perfect music for every moment, tend by their very nature to enclose us in a filter bubble. This phenomenon, dictated by the platforms' need to retain their users, pushes us to listen to the same genres, artists and even tracks over and over again, limiting our exposure to new musical experiences.
Paradoxically, the very app that could limitlessly expand our horizons tends to trap us in a kind of gilded cage where variety and discovery give way to a repetitiveness that is both comforting and suffocating.
Money, it’s a gas
Here we get to the heart of the problem: making profits on the web, even when you have a dominant position, is a far from simple undertaking. Spotify, despite its apparent monopoly, has struggled for years to achieve profitability.
The digital market is complex, with high fixed costs and thin profit margins often dictated by the expectations of users who see the web as a world where services are by definition cheap or even free. The rules of the game here are ruthless, innovation must be continuous and supported by a robust business model.
Spotify is the perfect example of how, even in an oligopoly environment, the challenges are enormous. The platform finally reached the coveted profitability in 2024, but the road to get there has been long and winding. And it is a road it will have to continue to tread carefully, because the digital world is constantly evolving, and what is a success today may not be so tomorrow.
Credits: - Images 1 and 2: Spotify Technology
- Image 3: Rough Trade Records
- Market insights: Digital Music News, Spotify Technology, Music Business Worldwide, ChatGPT
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