Futuresource: Music Streaming Declines in COVID-19 World

With the exception of vinyl records, subscription streaming music services remain the number one growth driver in the global music market, accounting for more than 70% of spending on music last year, according to Futuresource Consulting.

Yet, as measures to halt the spread of COVID-19 begin to reshape the lives of consumers, music streaming is experiencing a temporary decline, with consumption down from 15% to 20%.

“We may have expected to see an uptake in the use of streaming music services, as people become confined in their homes,” market analyst Alexandre Jornod said in a statement. “This is linked to consumers adjusting to new confinement rules, which have removed key music listening situations like the daily commute, as well as office and gym time.”

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Futuresource says that as families spend more time at home together, music consumption is becoming a shared activity. Before the pandemic people were using separate accounts to play different music, now smart speakers are likely to be used with a single account used to play music in the household.

The London-based firm said there is also competition from gaming, movie and TV show streaming. These activities require a higher level of attention and tend to be favored when some extra time is freed up as a result of routines being interrupted.

“Once consumers become accustomed to the situation and establish new routines, we expect streaming music to get back to levels similar to before the crisis,” Jornod said. “Home listening will dominate, with a shift in the music types and genres as consumers seek out lean-back mood playlists as opposed to searching for specific songs or artists.”

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Meanwhile, Futuresource said Spotify and Apple account for more than 60% of combined global subscriptions. Spotify remains No.1 globally, with Apple No. 1 in the United States. Amazon Music’s multiple streaming plans cater to a wide audience, although its subscriptions are closely linked to Echo smart speaker geographies, which skew heavily towards the U.S. and U.K., according to Futuresource.

The research firm contends Google-owned YouTube Music has the potential to become a key player thanks to its established YouTube audience. Smaller players like Deezer, Tidal and Napster are focusing instead on strategies such as targeting local markets, serving niche audiences or B2B operations.

“Streaming music subscriptions also benefit from markets where physical media has been historically strong and they are now transitioning to streaming,” Jornod said, alluding to Germany, Japan and France, which he said are experiencing accelerated adoption — unlike maturing markets in North America.

“Watch out for a rise in podcasts beginning to exert its influence, as well as enhanced listening experiences such as Hi-Res audio, Dolby Atmos Music and Sony 360 Reality Audio,” Jornod said.

Comcast Adds Amazon Music to X1 Platform

Comcast Cable June 20 announced the availability of Amazon Music on Xfinity X1 and Xfinity Flex, marking the first time the ad-free and on-demand music streaming service is available directly on the TV through a pay-TV provider.

Amazon Music is now available on Xfinity Flex, Comcast’s recently launched service for Internet-only customers. Subs who haven’t yet tried Amazon Music Unlimited are eligible for a 30-day free trial.

Last year, Comcast and Amazon launched Prime Video on X1, enabling Xfinity subscribers to access Prime Video’s original programming and catalog of shows, movies and live events via Xfinity on Demand or through the Prime Video app.

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The X1 platform is now in a majority of Xfinity customers’ homes.

Xfinity X1 and Flex customers can say “Amazon Music” into their voice remote to browse, search and listen to millions of songs and thousands of playlists and stations.

“Now Amazon Music listeners can effortlessly explore millions of songs, including the latest releases by their favorite artists, and much more directly through Xfinity,” Ryan Redington, director of Amazon Music, said in a statement.

With Amazon Music, Prime members have access to more than two million curated songs and thousands of playlists and stations. Users can also access to more than 50 million songs and thousands of playlists and stations with Amazon Music Unlimited, the premium subscription tier.

“Amazon Prime Video quickly became one of the most-viewed services on X1 following its launch last year, so we are excited to expand our collaboration and enable our customers to also enjoy Amazon Music on the biggest screen in the home,” said Nancy Spears, VP, business operations and strategy, Comcast Cable.

Spotify Inks Direct Access Deal with Samsung Mobile Devices

Spotify March 8 announced a deal with Samsung offering mobile device users direct access to the second-largest music streaming service in the world (after Apple Music). Starting today, the Spotify app will be pre-installed on millions of new Samsung mobile devices globally.

New Spotify consumers in the U.S. with select Samsung Galaxy mobile devices, including the just-launched Galaxy S10, can qualify for six months of free Spotify Premium, redeemable through the app.

The partnership expands last year’s agreement affording Spotify with Samsung’s virtual assistant software, Bixby. Spotify also enhances the Bixby Home screen by providing Spotify content and recommendations tailored for each listener.

“This partnership makes it easy for Samsung mobile users to access their favorite music and podcasts on Spotify, wherever they are and however they choose to listen,” Sten Garmark, VP of consumer products, Spotify, said in a statement.

The embedded Spotify app aims to make Samsung mobile devices more appealing to consumers.

“Our goal is to deliver the best possible mobile experience … and Spotify is the ideal music partner to help us make that vision a reality,” said Patricio Paucar, VP of marketing, Samsung Electronics America. “Whether they’re listening to the latest hit albums or checking out their favorite playlist, we’re giving eligible Galaxy S10 users access to an amazing six month Spotify Premium offer.”

 

 

Amazon Music Expands Service in Canada

Amazon Sept. 26 announced the launch of Amazon Music Unlimited in Canada, featuring voice-activated controls by Alexa.

Amazon launched Prime Music in 2016, with Canadian service bowed in 2017. Amazon Music Unlimited affords users access to millions of more songs and artists on the Amazon Music app for iOS and Android, and on all Echo devices.

Amazon Music Unlimited is available to all customers, offering even more music and ways to ask for it through Alexa. Users have the ability to ask for music on any Alexa-enabled device, including through the Amazon Music app for iOS and Android, by mood, era, genre and title.

Users can also request a playlist based on activity, set music alarms to wake up to, build and add a song to a new playlist just by asking, or return to a song they were listening to earlier in the day. With hands-free listening in the Amazon Music app, users can simply ask Alexa to play music, anywhere they go.

Available in more than 40 countries, Amazon Music offers ad-free access to the newest music from artists such as Ariana Grande, Drake, Arkells, Shawn Mendes and Carrie Underwood, among others, with unlimited playback and skips.

In addition to a range of locally curated playlists and stations featuring international chart-topping artists, from “Brand New Music” to “All Hits,” Amazon Music Unlimited offers numerous playlists and stations featuring Canadian artists from all genres including Cœur de pirate, Celine Dion, The Weeknd, Blue Rodeo and Jessie Reyez. Subscribers can also find the best in top genres, from Tory Lanez on “Fresh Hip-Hop” to The Reklaws on “Fresh Country,” as well as explore a range of globally available playlists, including “Pop Culture,” which spotlights the latest pop music releases.

Amazon is offering new Prime subscribers a free 90-day trial for a variety of plan options, including the standard Prime member price of CDN$7.99/month or CDN$79/year, the individual plan for non-Prime members at CDN$9.99/month; the family plan, which allows up to six members of a household to share a subscription for CDN$14.99/month for Prime and non-Prime members, or CDN$149/year for Prime members; the single device plan, offering full access to Amazon Music Unlimited at CDN$3.99/month on one Echo device, including the recently announced Echo Dot, Echo Plus, Echo Show and more.

“We’ve seen such a positive customer response from the launch of Prime Music for Canada last year, and with today’s launch we’re excited to bring more customers even more choice and ways of discovering music with Alexa,” Sean McMullan, head of international expansion for Amazon Music, said in a statement.

SiriusXM Radio Acquiring Pandora for $3.5 Billion

Mega media mergers aren’t limited to video anymore.

Satellite radio operator SiriusXM and subscription streaming music operator Pandora Media Sept. 24 announced a deal under which SiriusXM will acquire Pandora in an all-stock transaction valued at about $3.5 billion.

The transaction, which has been approved by both the independent directors of Pandora and by the board of directors of SiriusXM, creates the world’s largest audio entertainment company, with more than $7 billion in expected pro-forma revenue in 2018.

The transaction is expected to close in the first quarter of 2019. It is subject to approval by Pandora stockholders, in addition to passing mustard with U.S. and foreign antitrust issues and regulations.

“We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience and have been impressed by Pandora’s strategic progress and stronger execution,” Jim Meyer, CEO of SiriusXM, said in a statement. “We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses.”

Pandora’s more than 70 million monthly users would enable SiriusXM to significantly expand its presence beyond its more than 36 million subscribers across North America vehicles into the home and other mobile areas.

Leveraging SiriusXM’s exclusive content and programming with Pandora’s ad-supported and subscription tiers could create unique audio packages, while also utilizing SiriusXM’s extensive automotive relationships to drive Pandora’s in-car distribution.

“We’ve made tremendous progress in our efforts to lead in digital audio,” said Roger Lynch, CEO of Pandora. “Together with SiriusXM, we’re even better positioned to take advantage of the huge opportunities we see in audio entertainment, including growing our advertising business and expanding our subscription offerings.”

Pursuant to the agreement, the owners of the outstanding shares in Pandora that SiriusXM does not currently own will receive a fixed exchange ratio of 1.44 newly issued SiriusXM shares for each share of Pandora they hold. Based on the 30-day volume-weighted average price of $7.04 per share of SiriusXM common stock, the implied price of Pandora common stock is $10.14 per share, representing a premium of 13.8% over a 30-day volume-weighted average price. The transaction is expected to be tax-free to Pandora stockholders. SiriusXM currently owns convertible preferred stock in Pandora that represents a stake of approximately 15% on an as-converted basis.

The merger agreement provides for a “go-shop” provision under which Pandora and its board may potentially enter negotiations with parties that offer alternative (i.e. more lucrative) proposals. Pandora said it does not intend to disclose developments about this process unless the board acts on any superior bid.

“The addition of Pandora diversifies SiriusXM’s revenue streams with the U.S.’s largest ad-supported audio offering, broadens our technical capabilities and reach out of the car even further,” Meyer said.