US: Spotify shares sink on Amazon Music news

Reports that Amazon is planning to launch a free ad-supported music service caused Spotify shares to fall 4% on Monday, April 15.

According to Reuters, the eCommerce giant would offer the free music service through its Echo speakers, and it could launch as early as this week. Amazon already offers its Prime Music service as part of its Prime subscription service at US$119 per year, as well as Amazon Music Unlimited subscriptions for US$9.99 a month, or US$7.99 per month for Prime members.

Earlier this month, Apple Music surpassed Spotify in the number of paid subscribers it has in the United States, with Apple Music boasting 28 million paid subscribers compared to Spotify’s 26 million, as of February.

Apple Music also has a growth rate of around 2.6% to 3% to Spotify’s monthly rate of about 1.5% to 2%. Spotify still has more paid subscribers worldwide, and users in general, as it has a free option that’s ad-supported. Apple Music does not offer a free option.

Apple Music is also growing faster around the world at 2.4% to 2.8% versus Spotify’s 2% to 2.3%, with Apple Music’s biggest growth from other English-speaking places where iPhone use is high and iTunes was popular. It’s also available on Android devices, and it’s been installed 40 million times from the Google Play store.

In response, Spotify has started pushing back against Apple, including filing an antitrust complaint against the tech giant last month over its alleged abusive control of the App Store, claiming that it uses the store to its own advantage.

Horacio Gutierrez, Spotify’s general counsel, has said, “apps should compete on merits, not who owns the app store,” adding that “once Apple became not only a platform provider, but also a direct competitor, their incentive to disadvantage rival services like Spotify became even greater, and their restrictions started to become more frequent and extreme.”