Tech Giants Boast an Edge in Music Streaming
Paid services typically spend 70% of their revenue on licensing music. Shown, Katy Perry performs. PHOTO: KEVIN TACHMAN//WIREIMAGE
How many companies can survive in the high-cost music-streaming business? Plenty, it appears—as long as music isn’t their main source of revenue.
Streaming music is just a sideline for the industry’s power players—Apple Inc., Amazon.com Inc. and Alphabet Inc.
Even so, their influence looks likely to grow. Apple is revamping its Apple Music app while exploring an acquisition of streaming service Tidal. Amazon, meanwhile, is preparing to introduce a stand-alone $10-a-month subscription music service, matching the subscription fee charged by Apple Music and by Alphabet, which offers ad-free music through both its YouTube Red and Google Play Music service.
For the tech companies, paid streaming services aren’t just a new revenue stream. Their strategy is to use the services as bait to attract customers and hang on to them longer, so they can sell them something else...