Last Word: On the Apple v Spotify Rivalry
I’ve long discussed the exclusives strategy that Apple is using to attract hip hop talent to the platform. I’ve mentioned it as an incentive for the Cupertino corporation to buy Tidal – though that now seems implausible. Here, Ben Thompson makes a similar point for Spotify’s interest in Soundcloud.
By Ben Thompson, Stratechery.com
Still, Apple is committed to the exclusives strategy, which makes sense: if the contest between Apple and Spotify comes down to who can pay more for exclusive content then Spotify is in even more trouble than they are today.
That, though, is the second reason why the Soundcloud purchase makes sense: instead of buying exclusives from established artists, Spotify is in effect buying the platform where emerging artists post their new music of their own volition — and said music is by definition exclusive. No, none of those artists on Soundcloud can match the reach of a Taylor Swift, but it’s at least a start in making it up in volume. And who knows: if Spotify is big enough to squish Katy Perry perhaps they are big enough to grow their own stars without giving a dime to the labels along the way.
In sum, I’m still not a fan of Spotify’s business model, and think popular artists are best served by windowing and niche artists best served by connecting with fans directly, but this move in particular makes a lot of sense.
See more of the issue here.