Spotify to launch in Australia tomorrow, but analysts opt to wait and see

Streaming music service Spotify is finally set to launch in Australia tomorrow, months after the company set up a marketing presence here by hiring one of Google’s first local employees – but analysts suggest it’s too early to tell what impact it will have on the market.

The long-anticipated move by the Stockholm-based company comes as a number of other streaming services have already hit the Australian market, including JB Hi-Fi’s “Now” service, although it hasn’t managed to gain much traction.

Telsyte research manager Foad Fadaghi says there hasn’t been much publicity around such services, and a marketing push from a new entrant can help.

“There hasn’t been much publicity from the major labels about streaming services, along with other companies as well. So it’s a little too early to tell whether this offering is going to take off or not,” he told SmartCompany.

Telstra has already responded to the Spotify confirmation, saying it will launch its new MOG subscription service over the next few weeks.

“Our service in partnership with MOG will be available to all Australians and unmetered for BigPond and Telstra mobile customers,” a spokesperson said.

Telstra also indirectly referenced Spotify, saying a “highlighy competitive market means the services stay ever evolving”.

“We will launch with a very competitive service in the coming weeks”.

As reported in The Australian, the company – which is backed by Sean Parker – will launch tomorrow with a number of commercial partners, including Virgin Mobile and Coca-Cola, while Facebook will be a key part of the company’s
strategy.

American and European users are able to share music with their friends via the social platform.

The publication also reports that although a local launch has been planned for some time, it has been delayed as it attempted to strike up deals with Australian music labels. The issue for the music companies is that users don’t actually buy music on Spotify, they stream it, which makes paying royalties much more difficult.

“We will have the largest, most comprehensive online catalogue of music in Australia,” chief marketing solutions officer Jeff Levick told the publication.

“Australia is an incredibly important music market for Spotify, it’s the sixth-largest music market in the world.”

The company already has competitors. Apple has a huge presence in Australia with iTunes, along with Telstra and JB Hi-Fi, which all offer streaming services. Vevo also recently launched its music video website here.
Fadaghi says it’s too early to tell how customers will take to a high-profile site with a bigger marketing push, but argues these competitors don’t necessarily have everything to lose.

“Streaming is definitely a different business model to owning content, but there’s a different satisfaction level in people owning something. There is some overlap, but they are separate markets.”

Levick also told The Australian that the local launch will serve as an opportunity to expand through the region – and denied the biggest competitor was a company like Apple.

“The real competition is piracy and our belief from the get-go is the only way to be successful in this market is that you have to have a better model than piracy.”