There is no doubt about it, the war for online music streaming space is on and its about to get nasty. Prior to today, the competing companies, Spotify, Rdio, WiMP were only getting ready for battle. Counting troops, building war machines and marking territory.
Today, Rdio announced that they have launched free web music streaming in 15 countries, including pretty much every country in the ArcticStartup region with the exception of Latvia, Lithuania and Iceland. Now this is not a big news per say, as we have already covered the fact that they have silently launched first in Denmark and then in other Nordic countries.
However the fact that they are introducing a 6 months free music streaming service and are trying to send out this news to as many news outlets as possible, means that Rdio is making a move.
Unlike Spotify, Rdio was aiming to be profitable from day one and did not offer a free subscription at launch (Other than a short trial), but it now seems that they have come to realize that they simply can’t get enough userbase to up-sell from unless they offer a good enough free service. So to stay in the battle, they are doing just that.
Lets look at the numbers, Spotify claims to have around 20 million subscribers with 5 million of them – paying. Deezer (A french contender) has about 22 million users and 1.5 million paying subscribers. Rdio is a little tricky as they do not reveal their numbers, which is a tell tell sign all on its own. However some reports indicate that they have around 100,000 active users.
Music wise, everybody is more or less equal with Spotify and Deezer at 20 million songs, and Rdio at 18 million licensed tracks.
It is interesting that the pricing model seems to be identical amongst all participants. As if it has been regulated by some regulatory body that no man shall charge anything other than EUR 4.99 or EUR 9.99 per month for unlimited streaming. The companies do not even seem to consider the price as a viable point of competition. Which would make sense in a free market economy. It also makes sense for them to collude in the case of an oligopoly (Which is also illegal in most countries).
With nearly identical offers, music libraries and now markets – somebody will have to differentiate, outplay other in marketing or do something new and exciting and we can’t wait to see how this market will develop further. Although we do have some concerns about the industry as a whole, specifically the way the royalties are distributed.
As a reminder, Rdio was started by the same people that were behind Skype and Kazaa – Janus Friis and Niklas Zennström and first launched in 2010 in the US. So they are quite a bit younger than Spotify (2008) and Deezer (2007). Who is going to win? Let us know in the comments.
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