The online music streaming space is evolving quickly, and new players seem to pop up constantly. So how can Foolish investors know where to put their money? You can start with where people are actually going to listen to music.
Living the stream
Take a quick look at these stats showing the popularity of digital music and online streaming:
64% of teenagers prefer listening to music on Google Inc (NASDAQ:GOOG)‘s YouTube than from any other service.
53% of teens prefer Apple Inc. (NASDAQ:AAPL)‘s iTunes to other music destinations.
Pandora Media Inc (NYSE:P) streamed 13 billion hours of music in 2012. That’s right, billions.
Sirius XM Radio Inc (NASDAQ:SIRI) has more than 25 million subscribers.
Warner Music Group received 25% of its digital revenue from music streaming last year.
According to NPD, online radio services make up 23% of music listening for people ages 13 to 35, compared to 24% for AM/FM radio.
But those are a just a few simple statistics — the overall streaming market is about to get much more complicated.
In May, Google Inc (NASDAQ:GOOG) launched it’s own music streaming service, called Google Music All Access. The All Access option costs $10 a month, and gives users unlimited skips on the online radio — the free version acts more like a music storage and playback feature for Android and web users. If you believe the rumors, Google is also working on a separate streaming option that it’ll launch through YouTube.
Apple Inc. (NASDAQ:AAPL) used to dominate the digital music space with iTunes, but has since fallen behind the streaming trend. It aims to make up for lost time when it launches iTunes Radio this coming fall. The service will be ad-supported, but users can ditch the ads if they sign up for iTunes Match — Apple’s cloud-based service that stores music purchases and songs imported from CDs.
In addition to megatech companies Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) having their own streaming services, Amazon.com, Inc. (NASDAQ:AMZN) is rumored to working on it’s own service that will build on its music locker feature.
But not all of the competition is coming from public companies. Popular streaming service Spotify already claims 24 million users – with 6 million paying subscribers – and many companies see it as the main streaming service to compete with. Smaller players, like Rdio, also offer streaming services, and Beats Electronics is launching its own service in a few months, called Daisy, and is talking to AT&T Inc. (NYSE:T) for a deal to pair the service with the phone carrier’s data plans. While the smaller companies don’t pose a threat right now, they can serve as distractions to users from paying for online services from the bigger players.
