Spotify hires local head of sales as streaming music prepares to take off

The streaming music business is about to explode in Australia, with industry leader Spotify hiring a local head of sales as analysts expect the company to launch a local product within the next few months after years of waiting.

But the service comes on the heels of Microsoft’s own streaming music product, the Zune Pass, and electronics retailer JB Hi-Fi has confirmed its own product will launch by the end of the year, as consumers opt for streaming tracks at a cheaper price instead of outright purchases.

Telsyte senior research manager Sam Yip says Australians are set to spend more than $2.4 billion on digital services and subscriptions next year, with streaming music set to grow at a 36% compound annual growth rate. 

“The very fact that Spotify is looking to invest in Australia suggests they have identified the market here is ready for that type of streaming music product.”

Former Google Australia head of sales and operations Kate Vale has been named as Spotify’ s new local head of sales, according to an update on her LinkedIn profile.

That update comes as the European company – co-founded by Napster co-founder and former Facebook president Sean Parker – prepares for a conference on November 30 where it is expected to unveil its “latest major development”.

Vale was contacted by SmartCompany, but neither her nor a representative from Spotify were available prior to publication.

Yip notes a number of streaming music products are already available, such as Sony and Samsung’s products. However, he notes Spotify is such a huge brand that there is a big opportunity for growth.

“We have a lot of streaming services already, along with label-based products as well. We also have the emergence of dedicated streaming devices coming to Australia.”

“But because Spotify is such a well-known brand, there is capacity there.”

However, there is another issue. In the United States, bandwidth is cheap and smartphone plans usually come with an unlimited amount of data, allowing users to stream from services like Spotify and Pandora. In Australia, services are much more limited.

Yip suggests Spotify may have higher chances of succeeding if it partners with an ISP.

“Download limits will be a challenge for them. Whether they can partner with an ISP or a mobile service provider is yet to be seen, but there is that option for them.”

“But certainly, if they are looking into Australia, they’re going after the early adopters here and some part of the market is ready.”