Today DJ-oriented music service Beatport dropped the needle on a new subscription-based streaming offering, Beatport LINK, with a host of specialized features geared toward professional and aspiring mix-masters. While this kind of announcement happens three times a week in the OTT video streaming market, it is surprisingly rare in the music space, where a few big players have hoovered up all the airtime and listeners show little appetite for variety. Now a couple of new entrants are trying to get in between the cracks.
According to a March, 2019 study from Deloitte, the market for music streaming grew a robust 41% last year, in line with booming growth across the board for subscription-based media. There’s one big difference in the trends, however. Viewers opt for an average of three different TV subscriptions (and room for more), but when it comes to music, one choice is enough for most fans.
That’s unsurprising considering the lack of differentiation. Spotify (36% of the market as of June 30, 2018), Apple Music (19%), and Amazon (12%) lead a top-heavy lineup of mainstream providers, each offering roughly the same deep catalog and feature set, as well as platform lock-in incentives to keep listeners from switching providers.
In other words, the big companies have largely solved the problem of scale, and have made it tough for new entrants to compete for the fattest slice of the mass market. The problem with being miles wide and inches deep is that you invite competition at the edges, for listeners with specialized tastes and interests.
Beatport is one company trying to cater to a niche audience, combining its new music streaming service with the Beatport CLOUD suite of pro DJ features and integration with Pioneer’s WeDJ app and rekordbox software.
“The launch of Beatport LINK exhibits our commitment to creating the best possible experience for our expanding ecosystem of DJs,” said Beatport’s CEO, Robb McDaniels. McDaniels sees features like integration with Pioneer software – something most mainstream fans don’t care about, but pros need – as a key differentiator within their niche, as well as something that generalized music streamers will never offer.
Is this a huge market? Probably not. But DJs are a critical part of the music ecosystem, linking the recording, online and live-experience spheres. Owning all their mindshare could be worth quite a bit.
Another streaming service with a strong niche play is Primephonic, a new platform focused on the criminally under-served classical audience. According to industry estimates, about 5% of worldwide music consumption is classical, but classical accounts for only 1% of streamed music, in part due to inherent limitations of streaming search and payment models that make it a poor fit for long-form compositions with a complicated taxonomy of work, movement, composer and performer.
Launched at the end of 2018, Primephonic has already seen 200,000 downloads and built a subscriber base of 50,000 in a limited release in the US, UK and Netherlands. Primephonic founder and CEO Thomas Steffens estimates the service’s catalog of two million tracks from 2200 different labels accounts for about 95% of all the classical music ever recorded.
Like DJs, classical fans occupy a market space with influence beyond their numbers. Classical listeners tend to be well-heeled, well-educated and willing to spend on their hobby. They’re older than average and have stuck with CDs and paid download longer than just about any other music audience: not because they’re luddites, but because their needs are not being catered to by mainstream music services. 46% of classical fans report being dissatisfied with streaming services, compared to 26% of pop fans.
“The big platforms like Spotify understand they have gaps with niche markets, but they have other priorities at the moment,” says Steffens. That creates an opportunity for immediate market impact.
Classical fans also hold the high ground in a high-stakes battle for the living room, something that may make them extremely valuable to some of the bigger players down the road. 22% of classical listeners own a smart speaker, compared to 17% of pop music fans. In fact, they are bigger consumers of cutting-edge electronics across the board, from smart watches to wireless speakers to high-end stereo equipment. But Amazon, Apple and Google aren’t making it easy for them to connect their listening interests. It’s even harder to search for classical tracks on a mainstream platform using voice commands than it is on a standard interface.
Primephonic, like Beatport, is trying to own its segment outright by overserving their needs with premium sound quality, advanced search features, recommendations, and content geared to the interests and lifestyle aspirations of their audience. If you're not a member of these audio subcultures, those offerings are irrelevant; but if you are on the inside, they are pure gold.
Specialty services like Primephonic or Beatport LINK don’t aspire to displace Spotify, Apple or Amazon, but they clearly hope that by providing a feature- and content-rich service for their core audience, they can convince music streamers to open their wallets for a second per-month subscription, even contrary to industry trends.
If they succeed, they may change the music streaming landscape from a winner-take-all model to something that looks a little bit more like the OTT video model. There's certainly potential for comparable services for jazz, traditional/acoustic music, heavy metal and showtunes. Fans of niche genres will certainly be listening.
