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Analysis: Amazon to take Spotify’s crown in 2022?

February 17, 2022

According to Craig Armer, Strategic Insights Director at Kantar, 2022 could be the year Amazon dethrones Spotify as the UK’s biggest music streaming platform.

 Kantar’s Entertainment on Demand study into the UK’s music habits has uncovered the following trends:

  • 53 per cent of UK consumers with a music streaming subscription have a Spotify account, compared to a combined 48 per cent with either Amazon Prime Music or Amazon Unlimited
  • This gap has shrunk over the last 12 months, having previously been 13 per cent at the start of 2021
  • 1/3 of new subscribers to all platforms were offered a free trial, still being the most successful technique for attracting new customers
  • 32 per cent of the subscribers planning to cancel their music subscription cited “saving money” as a reason for cancellation.

Could Amazon overtake Spotify?

Amazon experienced a solid Q4 2021 performance for both of its music streaming platforms, with 45 per cent of new music subscriptions in the UK either going to Amazon Music Prime or Amazon Music Unlimited. Spotify is struggling to keep up with this amount of market penetration, only being able to capture 21 per cent of new subscribers.

A key to Amazon’s recent success is its over-indexing in the older demographics. New subscribers are more likely to be in a post-family life stage than any other platform, with 138 index score for Post-Family Retirees. In comparison this is a demographic in which Spotify is under trading, with an index score of 75. Another area of potential gain for Amazon could be to convert more of its current Prime subscribers to use its music platform. Only a relatively small proportion of Prime Members use Prime Music and gaining these consumers could be a simple way for Amazon to narrow the gap to Spotify even further.

In the wake of Neil Young removing his music library from Spotify following a dispute involving podcaster Joe Rogan, Spotify’s numbers for the current quarter will be looked at with keen interest across the music industry. The artists that are available to listen to on music streaming platforms is the second most important feature when choosing a subscription service, only behind value for money. In contrast, only one in six Spotify subscribers actively listen to podcasts, and podcasts are 11th on the list of most important features.

Although having only lost a handful over the last few days, more artists could be tempted to remove their music from Spotify if the scenario is repeated, which could be a cause for concern for the streaming giant.

What can Spotify do to improve/take comfort in?

Although Spotify has been losing out on attracting new subscribers, it can take comfort in their loyal and satisfied customer base. Spotify’s NPS score of 37 is the highest of the market and a statistic it has led in since Kantar’s survey began at the start of 2020. Some 82 per cent of Spotify’s subscriber based have been subscribed for over two years, the largest of any platform and 10 per cent above the market average.

This large and consistent group of Spotify subscribers should ensure that if platforms do start to lose subscribers due to cost cutting measures, Spotify should not be affected as heavily as other platforms. Rivals who are more reliant on consumers with more than one subscription in the category such as YouTube Music and Deezer are more likely to see the negative effects of consumers trying to save money.

Will squeeze on disposable income lead to cancellations?

With rising inflation costs and a national insurance increase coming in at the start of Q2 of 2022, consumers will be looking at where they can start to save money, and this may include cutting down their number of music subscriptions. Almost 1 million people are planning to cancel at least one of their premium subscription MoD (music on demand) services, the highest planned cancellation rate for the whole of 2021. This again could put pressure on platforms who are more reliant on stacked subscriptions, potentially requiring them to pull out all the stops to stop a mass exodus of subscribers.

2022 could be a year in which the British MoD market could see a reduction in the average number of subscriptions, making the task of market acquisition and churn harder for all platforms to manage. Looking back on recent data trends and understanding what strategies to employ could be the key to success moving into the new year.

Percentage Share of new GB MoD Subscribers
Q1 2021 Q2 2021 Q3 2021 Q4 2021
Amazon Prime Music 18.3% 11.5% 20.1% 27.1%
Spotify 21.0% 28.0% 26.0% 20.6%
Amazon Music Unlimited 22.9% 26.5% 26.1% 18.3%
Apple Music 21.1% 16.9% 9.7% 13.3%
YouTube Music 1.9% 2.5% 2.8% 5.5%


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