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As Spotify Prepares to Go Public, How Do Its Competitors Measure Up?

As it moves toward its long-anticipated public offering tomorrow, Spotify is the leading music streaming service by a wide measure. But how secure is the market leader’s lead? Since streaming services tend to be either selective or secretive about their subscriber numbers, which are generally not available to the public unless the service decides to announce them, Variety did some digging to find out just how far ahead of its competitors Spotify actually is.

Spotify According to figures made public in February, Spotify claims 157 million monthly active users in 61 countries, 71 million of which are in its premium paid subscription tier, which includes users on discounted (i.e. family or student plan) basis. While the company declined to provide how many discounted users it currently has, based on numbers provided in its SEC filing (which said free or discounted subscriptions accounted for “27%, 23% and 20% of total gross added Premium subscribers for 2015, 2016 and 2017 respectively”), that’s around 5 million, although an industry source tells Variety that number is higher, and that the number of subscribers is closer to 73 million. While Spotify is losing vast sums of money every year, its path to profitability is unclear and it has hedged its bets on Wall Street by going with a direct listing rather than a traditional initial public offering, it has a solid lead globally over the No. 2 service, Apple Music, and its name has become synonymous with streaming for many people.

Apple Music Apple SVP Eddy Cue announced at South by Southwest last month that the service had 38 million subscribers, plus another 8 million users in free-trial mode. And while it’s far behind Spotify in global terms, in the U.S. that lead is much smaller: 15 million to Spotify’s 18 million, industry sources say. Early in February a Wall Street Journal report used Apple’s monthly subscriber-growth rate in the U.S. to Spotify’s — 5% versus 2%, respectively, according to “people in the music business familiar with figures reported by the two services” — to project that Apple will overtake Spotify in the U.S. sometime in the summer of 2018. (The Verto Index, using its own methodology, says it’s already happened.) The company has worked to differentiate itself with splashy exclusives and the recently announced addition of “hundreds” of music and music-related videos, but how long that strategy will continue after Jimmy Iovine, its chief industry liaison and most-recognized executive, shifts into a more advisory role in August remains to be seen.

Amazon The retail giant has set itself apart from the other services by shooting for a more mainstream audience via its Amazon Prime membership — sources say its most-popular genres are rock and country, whereas pop and hip-hop/R&B dominate at Spotify and Apple — and its strong emphasis its Alexa-enabled home speaker. In a recent Bloomberg interview, VP of Music Steve Boom asserted that the company is solidly No. 3 globally — Midia Research estimated its subscribers at around 16 million in October, and a source tells Variety the number has  doubled in the past six months — and noted that “Amazon Music on Alexa [has more listeners] than smartphones, which makes us really, really different from the other music services, where it’s all about mobile.” A company spokesperson noted that in 2018 to date, the total Amazon Music hours streamed on Alexa-enabled devices globally was more than double compared to this time in 2017. The company is working to make waves with special programs including big-name artists — such as “The U2 Experience,” a one-time-only radio special in November that was exclusive to Amazon Music members — but Alexa and more-casual music fans are its most promising way forward.

Pandora While a pioneer in Internet radio, the company was late to the on-demand game and has 5.48 million total paid subscribers between its $4.99 Pandora Plus and its $9.99 Premium tier (up 25% from a year ago), with a total monthly active user number of 73.7 million, according to numbers released in February. Launched in March 2017, then on the web earlier this month, revenue from these two new services boosted revenue to $97.7 million, up 63% from the previous year. The company is emerging from a major reorganization in the wake of cofounder/CEO Tim Westergren’s departure last summer; new CEO Roger Lynch said he plans to move the company aggressively into the podcast space.

iHeartRadio The largest radio network in the U.S., which is currently in bankruptcy proceedings but appears likely to continue as usual for the immediate future, reached the milestone of 110 million users for its app just this past January. Last year, it officially entered the on-demand streaming race by launching two new products: iHeartRadio All Access ($9.99) and Plus ($4.99) which boast different listening options and special features, such as playlist creation and offline listening. The company has yet to announce how many users have signed up for either.

Deezer While the French company is strong internationally, it has struggled to find footing against its bigger competitors in the U.S., and a breakthrough does not appear imminent. It does not disclose paid subscriber numbers but a rep tells Variety is has 14 million active users; according to a Midia Research report from October,  it has 6.3 million subscribers.

Tidal Mystery surrounds the number of subscribers the ostensibly artist-owned streaming service, which launched when Jay-Z acquired Aspiro, Norwegian parent company of a streaming service formerly known as Wimp, for $56 million in 2015. In September of that year, he tweeted that Tidal had hit the 1 million-member milestone, though internal payments to record labels cited in Norwegian publication Dagens Næringsliv said it was closer to 350,000;  around six months later, Jay claimed it had reached the 3 million subscribers, which the Norwegian paper said was closer to a million; no further numbers have been circulated. The company has played up its exclusive content — which includes videos, films and podcasts as well as music — and while it suffered some bumps with high-profile exclusives like Kanye West’s “The Life of Pablo,” Rihanna’s “Anti” and Jay’s own “4:44,” the rollouts for Beyonce’s “Lemonade” in 2016 and Deadmau5’s “Where’s the Drop” last week went smoothly. Whatever Tidal’s future may be,  Jay is likely to come out ahead: Last year he was able to sell a third of the company to Sprint based on a $600 million valuation.

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