Don't cross the streams: Australian market 'saturated', says Spotify

By Frank Chung | 26 April 2013
 
Spotify Australia and New Zealand managing director Kate Vale.

Songl, Mog, Pandora, Rdio, Guvera, Deezer... it seems like every other week a new music streaming service opens up in Australia. But has the market become saturated? Absolutely, according to Spotify – and most of them won't be around in 12 months' time.

Kate Vale, managing director of Spotify Australia and New Zealand, isn't bothered by the competition. "We don't spend a lot of time comparing ourselves to other platforms," she told AdNews. "Really I think the more services that launch here the better – it just goes to show how important the Australian market is.

"The way we see it, the more people not downloading music but instead coming onto free or legal services, the better it is for everyone. But I think there will come a point where there'll only be a few key players in the market. Whether that's three or four, I can't imagine it being any more."

Vale says the Australian market is "one of the most saturated" in the world. "But if you look at what's happened elsewhere, generally it takes about 12 months [to consolidate]. The good thing is it gives people options to try different services – but they can't all be successful.

"The other thing is, you're not going to pay to try every service – that's why we think we have a competitive advantage, because people can come and try us for nothing."

Pandora, the US streaming radio service which soft launched last December with former Fairfax digital boss Jane Huxley at the helm, says it is gunning for one million Australian users by year's end. Huxley claims "hundreds of thousands" of registered Australian users.

While declining to reveal local subscriber numbers, Vale said she didn't consider Pandora a threat. "Look, I love the fact that Pandora's here. I loved using Pandora when I was in the US. They're a very different platform to Spotify, very much a lean-back platform, more like radio. But then you'll see that we've launched a radio product as well, which in my opinion is superior."

So has Spotify reached its peak? "Absolutely not, not with the growth rates we're seeing. I would say we're very much in our infancy, given the numbers and the data we're seeing. We're expecting significant growth in the next 12 months."

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