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Spotify vs iTunes Subscription Music Service Rumor Heats UP

Spotify vs iTunes Subscription Music Service Rumor Heats UP

By: Spacelab Research Staff
March 20, 2012
The latest in the saga of iTunes vs Spotify is the the story that streaming music service Spotify is going to be taken on by an Apple streaming iTunes subscription music service. SXSW brought fresh talk of the rumors, and I know this one has floated around since Apple acquired Lala a few years back. Given that Sean Parker claimed at SXSW Music that Sean Parker claimed that Spotify will overtake iTunes in two years, it makes sense that a battle is heating up.

"If Spotify continues growing at its current rate in terms of subscribers and users, we will overtake iTunes in terms of the amount of revenue we contribute to the music labels in under two years," said Sean Parker at SXSW. That makes sense if everything stays the same, but how often does that happen?

Business Insider is saying an iTunes update is coming:  "An exec in the digital music business told us an announcement could be coming in days. Digital Music News also reported hearing this buzz from multiple execs at the [SXSW] show."

iTunes recently had talk of an iTunes redesign that would simplify the iTunes user interface and speed of the iCloud and iTunes Match parts of the app. What if you you could combine iTunes Match with your iTunes account into a subscription service that harnesses iCloud to stream music, movies and TV shows? Then it's Hulu vs Netflix vs iTunes vs Spotify all rolled into one. Apple is the only one positioned to combine everything into a subscription service to take them all on. They even quietly updated to the Mastered for iTunes service that upgraded the fidelity of sound, which could improve both music and HD Video.

This would all point back to enhanced tie-ins to the iTunes Store for music and iTunes App Store, vital parts of Apple's ecosystem to drive the sale of the iPad, iPhone and other Apple computers. They wedge Apple has here is music and video SALES, which Spotify doesn't have (yet). If Spotify only makes money as a streaming music site, they face thin profits like Pandora Radio, and will be everywhere you want to be -- but will make little money. Apple runs deep on products like the iPad, services the the iTunes Store for music and movies and TV shows, but the iTunes download model is getting stale. People are growing less inclined to download and manage a whole library, when they can just stream the content from the cloud.

Read more Digital Music News

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