Fro all your music addicts out there we prepared a treat discussing – Apple Music vs Pandora vs Spotify vs iHeartRadio & More: the best music streaming service right now! So, stay tuned!
The introduction of online music streaming services revolutionized the way people listen to music making it more accessible and, what’s more important, more portable. The pioneers of this segment were internet streaming services, such as Pandora Media Inc (NYSE:P), but over the years more and more companies appeared, which managed to shape the industry. One of the leaders in the segment is Spotify, founded in 2008, which allowed users to have access to entire playlists, as well as save songs for offline listening, in exchange for a fee. In the last couple of years, tech giants like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc (NASDAQ:GOOGL) also jumped in the field, launching their own streaming services. According to the Recording Industry Association of America (RIAA), industry revenue from paid subscriptions in the US surged to $1.22 billion in 2015 from $800 million a year ago.
Streaming has actually managed to disrupt the music industry and while for users it had a positive effect, for the music industry streaming resulted in a drop of revenue. Even though the popularity of streaming has increased, it has dragged down the sales of physical albums, as well as the sales of downloaded albums and singles. Due to the fact that streaming services pay lower royalties, music industry is now earning less than a couple of years ago. However, the future seems to look bright as global music spending surged by 41.8% to $4.07 billion in 2015 and is expected to reach $11.06 billion in 2020, according to PwC. In this way, last year Universal Music Group managed to generate over $1.0 billion in revenue from streaming, versus $375 million a year earlier. Streaming has led to labels to change their businesses and rely more on social media to drive more revenues.
One bright spot here is vinyl, which recently has started to come back and has been gaining traction due to its nostalgic sound quality that can’t be compared to digital recordings. For example, in 2015 U.S. LP sales amounted to $416 million, according to RIAA, compared to just $14 million a decade ago. By comparison CD sales slid $1.50 billion from $10.52 billion in the same time frame.
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Another industry that has been negatively affected by the new technology is the traditional AM/FM radio. Earlier this year, it has been announced that Norway would be the first country to shut down its FM Network and will switch to digital radio and other countries are likely to follow suit. Even though broadcasting via digital radio won’t be much different from analog in terms of content, with time we can see its popularity limited, since even cars currently come with technology allowing to connect to Spotify or other streaming services. With technology allowing cars to become autonomous advancing fast, there is a possibility that in the near future that in-car radio demand will decline further as people will be able to watch videos on the move. According to an Edison Research study last year, the number of people that don’t have a radio in their house went up to 21% from 4% in 2008, while the number of people having one to three radios inched down by 2.0 percentage points to 63%. By comparison, 57% of people listened to online radio in the previous month, up from 53% in 2015 and from 21% in 2006.
Having said that, let’s take a closer look at the best music streaming service right now!
Let’s start our list of the best music streaming service right now with Pandora Media Inc (NYSE:P)’s Pandora Radio, since it ranks as the most popular according to the previously-mentioned Edison Research study. According to their survey, 82% of respondents are aware of the existence of the brand, while 32% said they listened to it in the previous month. The service, powered by the complex algorithm Music Genome Project, may be currently similar to traditional music-radio, but in 2015 it acquired Rdio, a streaming music service that had gone bust, and has added over 100 employees, which was widely seen as Pandora’s plans to jump in the streaming service and rival Spotify and the likes of. In 2015, Pandora Media Inc (NYSE:P) had 81.1 million active listeners and generated revenue of $1.16 billion, up by 26% over the year.
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Up next on our list of the best music streaming service right now is Apple Inc. (NASDAQ:AAPL)‘ and its Apple Music which was introduced in June 2015, replacing iTunes Radio, an Internet radio service that allowed users to listen to automatically generated playlists. Even though iTunes Radio was discontinued in January 2016, Apple Music includes the Internet radio station Beats 1 and also lets users to stream music to their devices on-demand or listen to existing playlists. Apple Music has over 20 million paying subscribers as of 2016 and the popularity of Apple Inc. (NASDAQ:AAPL)’s iPhones, which have some of the best loudspeakers, as well as its ecosystem of products is helping the company to build the user-base of its music streaming service. According to Edison Research, 67% of respondents in the US were aware of Apple Music’s brand, but only 12% said they had used the service in the previous month.
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Spotify is up next on our list of the best music streaming service right now. It is one of the pioneers of music streaming and as of September 2016 it has around 40 million paying subscribers, compared to 30 million in March 2016. A fast growth in the number of users allowed Spotify to almost double its revenue to $2.2 billion in 2015, however the company is far from reaching profitability due to high royalties to the music industry. According to Bloomberg, Spotify’s commissions to the music industry amounted to $1.80 billion in 2015, but the company is negotiating a lower cut of the sales to be paid to labels, which currently take away around 55% of the company’s sales. The company, which is currently valued at around $8.0 billion is planning an IPO later this year, but due to its lack of profitability and uncertainty around negotiations with labels, the expectations from investors are not very high. Nevertheless, Spotify remains one of the most popular streaming services in the world. According to the same Edison Research study, 52% of respondents showed awareness of the brand, while the percentage of people that had listened to the service was at 13%, which is one percentage point above Apple Music.
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iHeartMedia Inc (OTCMKTS:IHRT)‘s iHeartRadio has over 90 million registered users as of August 2016, and it is definitely one of the best music streaming service right now. However, the service is free of charge and iHeartMedia is making money through advertising (by comparison the total number of users on Spotify is around 100 million). iHeartMedia Inc (OTCMKTS:IHRT) is different from other services listed here, because aside from offering playlists similar to Pandora, its main feature is the availability of a wide range of live radio stations from across the US, which is why iHeartMedia Inc (OTCMKTS:IHRT) isn’t really competing with giants like Spotify, Apple, or Pandora. The company also owns around 860 radio stations in the US, the content from which can also be accessed online. Edison Research estimated that 67% of the US population was familiar with iHeartMedia’s iHeartRadio last year, but only 12% listened to it in the previous month.
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Amazon.com, Inc. (NASDAQ:AMZN) is up next on our list of the best music streaming service right now. It launched Amazon Prime Music in 2014 and so far it doesn’t seem to have caught on in comparison with Spotify or Apple Music. Edison Research estimated that 51% of people in the US are familiar with the brand, but only 6% listened to it. This is interesting since Amazon also has over 63 million Prime subscribers, which can enjoy some benefits from using Amazon Prime Music, the main of which is that the service is free for them. However, there’s a catch: there are just around 2.0 million songs available, which may sound like a lot, but is significantly lower than compared to Spotify’s 30 million-song database. To address this issue, Amazon.com, Inc. (NASDAQ:AMZN) launched Amazon Music Unlimited, which is more similar to Spotify and Apple Music in terms of both costs and content availability. The new service is available for non-Prime members at the same $9.99 per month that other companies are charging. Then there are two plans for Prime subscribers. One costs $3.99, which is extremely cheap, but is available only on Amazon’s Echo (or Dot or Tap) speakers. The other costs $7.99 per month, which is close to the money charged by Spotify, but the savings can be added up over time (and spent on cool stuff from Amazon).
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The last one on our list of the best music streaming service right now is Alphabet Inc (NASDAQ:GOOGL) and its Google Play Music, which is pretty similar to Apple Music and Spotify, providing a free-of-charge access in exchange for ads and allowing an “All Access” subscription, which allow users to listen to over 35 million songs (it also costs $9.99 per month). Similar to Apple, Alphabet Inc (NASDAQ:GOOGL) is taking advantage of Google’s own devices (Pixel, Chromecast, Google Home, etc.) as well as the popularity of the Android operating system. Edison Research estimated that Google Play All Access had a brand awareness of 37%, but just 5% of population listen to the service.
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Conclusion: It’s hard to determine which service is the best, since, excluding costs, which are pretty similar, each service has its own attractive features. Users of Apple and Google devices might be more drawn to the pre-installed apps and the integration within an ecosystem. Amazon is cheaper for Prime subscribers, whose number is growing every day. Pandora allows users to discover new music and find songs that are related to their current mood (although competitors are catching up on that front). Spotify is one of the oldest in the industry and has brand loyalty and usability on its side. However, both Spotify and Pandora Media Inc (NYSE:P) have yet to find ways to turn to profitability, while Amazon.com, Inc. (NASDAQ:AMZN)’s, Apple Inc. (NASDAQ:AAPL)’s and Alphabet Inc (NASDAQ:GOOGL) services can be sustained for longer due to the solid financial situation of the companies behind them and strong user-bases. My personal subjective choice is Spotify because it’s the service that I have been using for years and I absolutely love it and don’t even think about switching to anything else.
That being said these were the best music streaming service right now, comparing Apple Music vs Pandora vs Spotify vs iHeartRadio & more. Which one is your favorite?
