Spotify Is Done Fighting Apple Music — and Ready to Take On Apple
Daniel Ek’s streaming company strikes a deal with Samsung, the world’s biggest smartphone maker
Spotify, by several measures the biggest music-streaming service in the world, has teamed up with Samsung, the biggest smartphone maker in the world. The two companies announced a major partnership on Thursday that makes Spotify the official music service provider for all of Samsung’s phones, televisions, tablets, watches and speakers. It means the Spotify app will be pre-installed on many new devices, as well as integrated into Samsung’s voice assistant program and better synced with Samsung’s smart-home apps.
Daniel Ek, the notoriously press-shy CEO of the streaming service, gave no public comments, but said in a Q&A with his own company that the partnership “reduces the friction for users to get Spotify up and running on multiple Samsung devices once the accounts have been linked” and “allows us to create a seamless music listening experience together for the user that would be hard for either of us to build alone.” He added, “We believe that this significant long-term partnership will provide Samsung users across millions of devices with the best possible music streaming experience, and make discovering new music easier than ever — with even more opportunities to come.”
Nowhere in Ek’s six “answers” did he mention his company’s competitors, but it’s easy enough to read between the lines: Spotify is buffing itself up to better compete with Apple Music, which not only comes installed on all of Apple’s iPhones but also, just this week, struck a deal to give Verizon smartphone customers six months of free service. With a foot in the Samsung ecosystem, Spotify will have a much easier time luring users to its product — especially given that the company offers an ad-supported listening tier that costs nothing for the consumer, unlike Apple Music’s subscription-only service, which is much less enticing for customers who might be trying out streaming for the very first time. Samsung’s mighty size offers an advantage, as well: Apple’s iPhones had 15.2 percent market share at the end of 2017, trailing behind Samsung’s yet-undefeated 21.9 percent.
As more people start using streaming services and changing the fundamental business model of music, the industry is, by many analysts’ estimates, due for partnerships and consolidation. Streaming and smartphones slot together well. Tidal, last year, teamed up with Sprint to bring the latter’s customers months of free service, as well as exclusive content and other deals. Apple is rumored to be considering rolling Apple Music into a giant “all-in” consumption package alongside Apple News and other media offerings. Spotify’s deal with Samsung is the latest of such partnerships, but won’t be the last by any means. “Our goal has always been to make music accessible to everyone by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it,” Ek said. And the path to it involves expanding beyond Spotify itself.
Investors are clearly excited: Spotify’s shares rocketed up more than five percent on Thursday following the announcement, to $188 — a price that has steadily climbed 40 percent since the company first went public on April 3rd.