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Spotify v Pandora – Clash of The Music Streaming Titans

With over 4 mil­lion pay­ing cus­tomers and rev­enue pre­dict­ed to reach $880 mil­lion in 2012, what chance does Pan­do­ra have in keep­ing the wolves from the door now that Spo­ti­fy has its feet firm­ly under the table in the US?

A lit­tle over a year ago, Spo­ti­fy strode into the US music stream­ing are­na and threat­ened to take on the best we had to offer includ­ing Groove­shark and of course, Pan­do­ra.  But can this Euro­pean behe­moth real­ly take on the best of the US?

It has recent­ly been announced that the Swedish giant has already dou­bled its num­ber of pay­ing cus­tomers from 2million to 4million in the year since it was launched in the US and the site now boasts an impressive25% con­ver­sion rate. If you’re in the mar­ket for a dig­i­tal media job, Spo­ti­fy is a com­pa­ny to keep an eye on.

Born in Europe, Tak­ing Over the World

Spo­ti­fy offers users a cat­a­log of around 15million dig­i­tal­ly restrict­ed songs from qual­i­ty pur­vey­ors includ­ing EMI, Uni­ver­sal and Warn­er, and boast­ed 10million users just two years after launch in 2008. Two-and-a-half mil­lion of those users were ful­ly paid-up members. 

Since its 2011 appear­ance on the US scene, Spo­ti­fy has extend­ed its ser­vices to take in Ger­many, New Zealand and Aus­tralia and recent­ly launched an inno­v­a­tive part­ner­ship with Coca Cola that will see Spotify’s tech­nol­o­gy under­pin all of Coca Cola’s music ser­vices glob­al­ly; a part­ner­ship that Coke has described as offer­ing ‘lim­it­less’ opportunities.

As well as active­ly expand­ing its busi­ness, Spo­ti­fy is also keep­ing its eye firm­ly on com­peti­tors by devel­op­ing and improv­ing its tech­nol­o­gy. The Spo­ti­fy Play But­ton will allow blog­gers and web­mas­ters to offer any song or playlist to all of their vis­i­tors com­plete­ly free – it’s even inte­grat­ed into the Tum­blr dash­board, while the all-new Android app is now avail­able via Google Play.

Where Does Pan­do­ra Sit?

With just 800,000 tracks at its users dis­pos­al, Pan­do­ra put a lot of faith in its Music Genome Project – a neat bit of soft­ware that gen­er­ates playlists or ‘sta­tions’ for users based on their ini­tial music choic­es. It’s a cute bit of kit, but it does mean users can’t lis­ten to what they want, when they want and this could let the ser­vice down. The com­pa­ny also has its eye firm­ly on the US mar­ket, rather than world domination.

Pandora’s June audi­ence met­rics make for inter­est­ing read­ing though. Lis­ten­er hours were up 77% from 640million to 1.08billion in June 2012 from the same peri­od in 2011, and active lis­ten­ers were up 51% and stood at 54.5million at the end of June. The com­pa­ny has also recent­ly announced a pro­gram that will allow local media firms to sell Pan­do­ra prod­ucts with their own offer in a bid to help small­er ad com­pa­nies reach con­sumers on-the-go.

Some of the com­pa­nies already signed up to the ser­vice include The Taco­ma News Tri­bune, The Mia­mi Her­ald and The Salt Lake The Taco­ma News Tri­bune – all of which are McClatchy com­pa­nies, and the pub­lish­er believes that part­ner­ing with Pan­do­ra will allow them to open up new rev­enue streams and devel­op the dig­i­tal arm of their own businesses.

It cer­tain­ly seems as if the music stream­ing ser­vices are con­tin­u­ing to enjoy suc­cess regard­less of their busi­ness mod­el and will con­tin­ue to do so by respond­ing and adapt­ing read­i­ly to shifts in the mar­ket and con­sumer demands.

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