Spotify is a digital music streaming company that offers consumers access to music and podcasts as well as the ability to create your own playlist.
The company, which is headquartered in Stockholm, Sweden, was founded in 2006 by Daniel Ek and Martin Lorentzon.
Spotify, which is available in 180+ countries across the globe, mostly licenses the music on its platform from major labels such as Universal, which in turn receive a portion of the streaming revenue.
However, the company certainly welcomes independent creators, whether its musicians or podcasters, as well.
As a product comprised of bits and bytes, Spotify is not only able to expand into new countries at a rapid pace but faces stiff competition in every new market it enters.
Spotify, with close to 190 million paying subscribers and 365 million active monthly users, remains the world’s biggest music streaming service. In 2021, Spotify generated around $9.66 billion in revenue.
The methodology with which the competitors of Spotify are ranked is based on a variety of factors. To simplify the analysis, we only take platforms known for music streaming into account. Consequently, apps known for podcasting or audiobooks, such as Audible or Stitcher, are excluded from this analysis.
Furthermore, where available, data on adoption and usage is taken into account, too. This can entail the number of users, streaming hours, number of employees, or simply revenue generated, amongst others.
This analysis should not be taken as a recommendation to subscribe to a particular streaming platform. It is merely a summary of all the competition that Spotify faces as of today and how it possible can defend itself against it.
So, without further ado, let’s take a closer look at the top 14 competitors of Spotify.
1. Apple Music
Headquarters: Cupertino, California, United States Founder(s): Steve Jobs, Steve Wozniak, Ronald Wayne (Apple founders) Year Founded: 2015
Apple is certainly no newcomer when it comes to music. The iPod became one of the best-selling products ever. Furthermore, its iTunes Music Store, from which Apple Music originated, allowed customers to purchase digital music since 2003.
Apple Music offers more than 90 million songs and is available in over 180+ countries across the world.
According to MIDiA Research, Apple Music has a 15 percent market share when it comes to subscribers (compared to Spotify’s 31 percent). The last time Apple revealed its subscriber count was back in June 2019 when it reached 60 million paying listeners.
2. Amazon Music
Headquarters: Seattle, Washington, United States Founder(s): Jeff Bezos (Amazon founder) Year Founded: 2016
Another tech giant gunning for Spotify’s top position is Amazon, which offers a music streaming service that features more than 90 million songs.
Subscribers of Amazon Prime will receive a discount when opting into the music streaming platform. The discount makes Amazon Music cheaper than Spotify, Apple Music, and other competing services.
In January 2020, Amazon disclosed that it just crossed 55 million paying subscribers. Recent estimates project that Amazon Music will surpass Pandora as the second-most popular streaming service in the United States (as measured by subscriber numbers).
3. YouTube Music
Headquarters: San Bruno, California, United States Founder(s): Jawed Karim, Steve Chen, Chad Hurley (YouTube founders) Year Founded: 2018
YouTube Music completes the triumvirate of tech giants trying to establish themselves in the music streaming space. It replaced Google Play Music, which Alphabet tried to unsuccessfully establish before, and decided to shut down in September 2020.
The service offers more than 70 million songs and can be used for free (ad-supported) or by paying a monthly subscription fee.
YouTube Music is included in the subscription of the YouTube Premium plan. The opposite, however, is not true for YouTube Music subscribers.
In September 2021, YouTube announced that it had crossed 50 million paying subscribers (for both Music and Premium). Furthermore, two billion people visit YouTube every month to consume music-related content.
Headquarters: Oakland, California, United States Founder(s): Doug Barry, Jon Kraft, Tim Westergren, Will Glaser Year Founded: 2000
Pandora is another music streaming service that, as of 2017, is only available in the United States. It also offers podcasting and even works together with TikTok to feature some of its creators.
The founders had raised close to $1 billion in funding from both venture capitalists as well as an IPO that took place in 2011.
Pandora was eventually sold to Sirius XM in September 2018, which paid a total of $3.5 billion to acquire the company. It was delisted from the New York Stock Exchange as a result of the purchase.
The streaming platform, according to the latest earnings report filed by Sirius XM, currently boasts 52.3 million monthly active users (down from 58.9 million the prior year). Ad-supported listener hours totaled 11.55 billion in 2021, down from 12.50 billion in 2020.
Additionally, Insider Intelligence (previously eMarketer) estimates that Pandora will be overtaken by Amazon Music by the end of 2022 – with Spotify still being the undisputed number one.
Headquarters: Paris, France Founder(s): Daniel Marhely, Jonathan Benassaya Year Founded: 2006
Deezer offers more than 90 million songs on its platform alongside other useful features such as music recognition software (dubbed SongCatcher), finding new tracks by shuffling one’s phone, and many more.
Similar to Spotify, the service is currently available in 185+ countries. Users can even switch countries to discover what music is popular in which location.
Deezer remains in private ownership, so data is hard to come by. It has raised a total of $531.8 million in venture funding. For comparison, Spotify raised over $2.1 billion during its life as a private company.
Moreover, Deezer currently boasts 16 million active users who have created a total of 100 million playlists.
6. Tencent Music
Headquarters: Shenzhen, China Founder(s): Charles Chen, Chenye Xu, Jason Zeng, Pony Ma, Zhidong Zhang (Tencent founders) Year Founded: 2016
Tencent Music Entertainment is a sub-organization of Tencent, a Chinese internet giant that is responsible for the creation and funding of WeChat, Epic Games, Riot Games, and many more.
While Tencent itself was founded in 1998, its music streaming platform had only been established in 2016.
The service, which owns a variety of platforms such as QQ Music, Kugou, Kuwo, and others, has raised $2.2 billion in private funding as well as through proceeds from its IPO (December 2018).
Tencent Music currently has 71.2 million paying subscribers across its streaming platforms. Additionally, its services boast a total of 646 million monthly active users (MAU). Kugou and QQ Music are the largest music streaming platforms.
While Spotify is currently not operating in China, it may not be too farfetched if Tencent decided to expand into new territories. TikTok, which is owned by ByteDance, has proven that Chinese companies could establish themselves in Western-dominated markets.
Headquarters: Berlin, Germany Founder(s): Alexander Ljung, Eric Quidenus-Wahlforss Year Founded: 2007
SoundCloud established itself as a platform on which independent artists could share their music and eventually be discovered.
Major artists such as Billie Eilish and Post Malone all ignited their careers with the help of SoundCloud. Its popularity even led to the creation of the term SoundCloud Rapper, namely hip-hop artists that became popular due to the platform’s reach.
While SoundCloud’s popularity had been waning in the past few years, it nonetheless remains a force to be reckoned with. It has managed to raise over $540 million over the course of its lifetime.
Since 2014, SoundCloud claims to reach 175 million users every month. Rapper Future recently became the first artist on the platform to reach 10 million followers.
Headquarters: Beijing, China Founder(s): William Lei Ding (Netease founder) Year Founded: 2013
NetEase Cloud Music is another subsidiary of Chinese internet technology company NetEase, which itself was founded in 1997.
The service, which has raised a whopping $1.4 billion in funding, went public on the Hong Kong Stock Exchange in December 2021 (raising another $421 million). NetEase’s music streaming platform has 185 million monthly active users as of today.
Headquarters: Moscow, Russia Founder(s): Arkady Borkovsky, Arkady Volozh, Ilya Segalovich (Yandex founders) Year Founded: 2010
Yandex is a search engine first (founded in 1997) and music streaming platform second (launched in 2010).
While Russia is not one of Spotify’s biggest markets (it only launched there and in 12 surrounding countries in July 2020), it has certainly the potential to become a key earner.
Yandex Music currently offers more than 50 million tracks. In late January 2020, it disclosed 3.3 million paying subscribers.
Headquarters: New York City, United States Founder(s): JAY Z Year Founded: 2014
Primarily known for its famous founder, TIDAL is another streaming platform that competes for listeners with Spotify.
In March 2021, the company was acquired by Block (formerly Square) for a total of $297 million. It had previously raised $8.8 million in funding.
Its music library, which is available in more than 60 countries, features over 80 million songs as well as 350,000 videos.
TIDAL has allegedly struggled to push its subscriber count past the 1.5-million-mark. Its inability to push beyond likely became the reason for why it sold to Block. It, therefore, remains to be seen if the backing of a major FinTech company can help it to reignite growth.
11. iHeart Radio
Headquarters: New York City, United States Founder(s): iHeart Media Year Founded: 2008
Another, yet still popular music streaming service is iHeart Media’s namesake platform iHeart Radio. As the name suggests, users can listen to live and local radio stations.
The service is currently available in the United States, Canada, Mexico, Australia, or New Zealand. It works together with 860 radio stations in these countries.
Despite its limited geographical availability, iHeart Radio has managed to attract 150 million registered users. Its podcasts are, for example, downloaded 422 million times every month.
Sources: iHeart Radio
Headquarters: Los Angeles, California, United States Founder(s): John Fanning, Sean Parker, Shawn Fanning Year Founded: 1999
This is one for the nostalgic ones. Napster initially began as a file-sharing system but after extensive legal battles was forced to switch to a music streaming business model.
In fact, Napster became one of the first music streaming services and even launched before the likes of Spotify.
Napster currently offers 42 million songs on its platform. The company, which is now owned by MelodyVR, now boasts a combined 5 million+ users.
Sources: London Stock Exchange
Headquarters: Noida, Uttar Pradesh, India Founder(s): Avinash Mudaliar Year Founded: 2011
Gaana is the largest music streaming platform in India and offers more than 45+ million songs from primarily Indian artists.
The entire Indian music catalog is available to consumers around the globe. Gaana features music from 21 Indian languages such as Assamese, Odia, Tamil, and many more.
More than 200 million people are registered on Gaana. Its Android and iOS app have, furthermore, been downloaded over 100 million times. Podcasts and songs on the platform are played more than three billion times every month.
Headquarters: Mumbai, India Founder(s): Anjali Naik, Anurag Gupta, Paramdeep Singh, Rishi Malhotra, Vinodh Bhat Year Founded: 2007
Given the size of India’s population and its future prospects as an economic powerhouse, it only felt right to include the country’s other major streaming platform.
It follows a similar approach to Gaana by primarily focusing on surfacing Indian artists and music. JioSaavn currently offers 60 million songs.
While Gaana became the first Indian music streaming platform that passed the 100-million-user mark, JioSaavn reached that same milestone just weeks later (in April 2019).
For reference, Spotify does currently not break down how many users it has in India. A year after it launched in India (2019), Spotify said it had attracted two million users. Ever since, the Swedish company has spent heavily on marketing to grow its userbase in India.
Spotify Competitive Advantage
Spotify’s competitive advantage lies in its music recommendation system, extensive artist tools, and exclusive content.
The company is able to gather tropes of data, such as song preferences, search behavior, playlist data, and more, which it then feeds into its music recommendations.
This is best exemplified through its Daily Mix” and “Discover Weekly” playlists, which take advantage of that data to consistently serve new songs to users.
In that regard, it provides artists with a variety of tools to assess how well their music performs and what they can improve. Spotify provides them with insights pertaining to user engagement, listener numbers, or the composition of their demographic.
The streaming service, furthermore, invests heavily into exclusive content. For example, it acquired the rights to the Joe Rogan podcast for $200 million. Months later, it churned out $155 million for 51 percent of The Ringer, which is spearheaded by Bill Simmons.
To that extent, Spotify tries to gain a stronger foothold in the podcasting industry as a whole. In February 2022, for example, it acquired Podsights and Chartable, two of the leading platforms related to marketing, advertising, metrics, and analytics for audio content.
Spotify Competitive Threats
While Spotify remains the undisputed leader in the music streaming industry, other platforms are slowly catching up.
Apple Music remains the biggest threat to its supremacy. The Cupertino-headquartered company possesses a few distinct advantages that could allow it to surpass Spotify.
First of all, it can control the way with which many customers access apps because of its dominance in the smartphone market. For example, the Apple Music app already comes preinstalled on iPhones and other Apple devices.
In the meantime, users have to download the Spotify app via the App Store in order to use it, which requires a few more steps – and some people might either be too lazy or uneducated to do that.
On top of that, Apple then receives a 30 percent commission from every subscriber that it refers. Spotify, in the past, has called out Apple on what it thinks are monopolistic practices. The European Union certainly agrees with that notion.
In April 2021, the European Commission issued antitrust charges against Apple and said that the phone maker broke European competition rules.
Apple, however, isn’t the only tech giant in the running for overtaking Spotify. Companies like Amazon or Google can also entice consumers to sign up for their services. For example, Amazon offers hefty discounts for everyone with a Prime membership. Similarly, Google could use its Android iOS to push YouTube and its premium offerings to users.
Apart from the competition, Spotify also has to figure out how to properly compensate artists. In the past, many have complained about the low pay that streams yield.
One of the most notable examples became Taylor Swift who removed her music from Spotify for more than three years. In recent times, rapper Kanye West has decided to release his Donda 2 album via his own hardware product (STEM PLAYER) and not on Spotify.
Lastly, the company also had to face blowback over how it handled the Joe Rogan controversy. Many people criticized the fact that Spotify wasn’t willing to take his podcast down after he repeatedly brought on guests who were providing listeners with incorrect medical information.