Spotify: The BlackBerry of music streaming services?
Flashback to the first decade of this century.
It seems like yesterday, and a million years ago at the same time. If you are too young to remember it well, it was a lot like today, only…different.
Take cell phones. Many people had them, but they used them slightly differently. They were business aids – necessary to own if you were serious about your career.
Similarly to today, there was a growing concern about the people that had them using them too much and missing out on the joys of being present in the moment. But, it wasn’t young people that were being accused of this. No, it was dad, mostly.
And what dad was addicted to was checking his work email on his BlackBerry. Many a divorce back then started with that square little phone with the QWERTY keyboard. So much so that the company name was actually synonymous with the cell phone.
Now it’s synonymous with someone that is out of touch. It’s stock price (TSE: BB) reflects that. After reaching an all-time high of $147.55 USD in 2007, it fell to the point where it now consistently trades at less than $10.
The truth is that the world is littered with companies that were once considered innovative and unstoppable but are now either dead or a punchline.
The exact reason for their demise varies, of course, but their existence is undeniable. That’s why companies that are on the leading edge of a market space today are always looking to tweak things and do things that keep them in the news, whether or not the changes that they are rolling out are actually beneficial to its customers.
They make cute changes, rather than useful ones.
Let’s look at the world of streaming music for an example. There the current industry standard is Spotify. They were the first to really nail down the technology and they blew up because of it. Like BlackBerry, Spotify became synonymous with streaming music. Also like the unfortunate cell phone brand, the cracks in their model started to show as soon as the competition rolled in.
Users complain about the price point of the premium service, the amount of ads they are subjected to on the free service, the use of their personal data, the AI and, most of all, a shrinking catalogue of artists. That latter problem is largely because most artists absolutely hate the platform because of the way it pays them, which makes fixing that issue difficult.
These are all significant challenges for the company, but instead of addressing them head on, what Spoitify does is it gets cute.
Its latest attempt at that was a feature it debuted yesterday called Only You.
What’s Only You? It’s just playlists, basically. They are using the same AI to create things like your Dream Dinner Party, or your Song of the Year.
It’s fine. As I said, cute. Most users will likely check it out once, maybe share it on Social Media and move on with their life. It doesn’t do anything to address the company’s cracks though.
The market was certainly nonplussed by it. It (NYSE: SPOT) opened at $243.55 before the debut of the feature and closed down at $239.73. The dip that saw it drop below $300 on March 3 continues.
Spotify hasn’t quite hit BlackBerry levels yet, of course. It still has 155 million paid users. However, companies that get cute rather than serious about addressing concerns often end up as history lessons.