Rdio and Spotify announce major global expansion plans

Two streaming services have announced major global expansion plans within the past 24 hours.

Streaming music provider Rdio this morning (Australian time) launched its services in 20 new countries. This makes a total reach of 51 international markets, beating Spotify’s new total announced early today.

Rdio said this expansion makes it the “second largest music subscription service in the world in terms of countries serviced”, falling behind Deezer.

Swedish music service Spotify also outlined plans this morning (Australian time) to expand and reach its target of 48 million subscribers –a new free streaming service for mobile devices, an exclusive deal with Led Zeppelin, and the launch of its service in 20 new countries.

Users can stream playlists for free as long as the songs are shuffled randomly. Those who want the luxury of picking their own songs and albums must pay a US$10 a month premium. “Nearly half of mobile listening, if not more, is people listening to their own curated playlists,” said founder Daniel Ek at the launch at the company’s New York office. “With shuffle play, you can now play any of your playlists for free. Spotify’s new mobile experience is music for anyone and the best experience and access in the history of music.”

Analysts say that allowing the customer to stream songs from a single artist is a sharp move. It is more appealing than Internet radio company Pandora … which, incidentally, saw shares drop by 6% after the Spotify announcement.

To ensure that the free service doesn’t eat into paying subscribers, Spotify premium users also get unlimited music on demand on all devices, no ads and the ability to access saved songs when their phones are off-line. In any case, Ek insists that Spotify converts 20% of its users into paying customers.

Rdio which launched a free mobile service in October, has faced recent adjustments in North America. It has laid off staff, and replaced CEO Drew Larner with Amazon vet Anthony Bay.

So it sees international expansion and profile as its future. Rdio says its monthly active user growth from countries outside the U.S. has leapt from 30 percent at the start of 2013 to 57 percent by the end of the year.

Rdio needs to bring in more users to offset the high music licensing fees that remains a problem for all streaming services. It recently struck a deal with Cumulus Media for a new free, ad-supported Internet radio feature to compete against Spotify, Pandora, and Slacker.

Despite Spotify and Rdio both announcing similar expansions into new territories, Colin Blake, who heads up Rdio in Australia, is confident they will be able to separate itself from Spotify as the better alternative to these new markets.

“I am not across Spotify’s plans,” Blake told TMN this morning. “I do know that we are confident in the quality of our product and believe that the minute someone experiences Rdio they love it. The people that have been exposed to other streaming services and then discover Rdio seem to be overwhelming complimentary about our interface and overall user experience.

Jimmy Iovine’s Beats Music also launches next month, which has led to commentators suggesting these recent announcements are a way to pre-empt the impact of this. Blake says Rdio are more concerned with the many services that pop up and dilute the market quality, hindering education surrounding streaming.

“I have a lot of respect for Jimmy Iovine and the Beats brand. To be honest at this point I personally am less concerned about a good brand and really strong player stepping up and more concerned about the multiple services that are not doing much to help the cause for education about streaming and how it fits into the music industry,” Blake says.

“I would be happy to see some active marketing from businesses that have a strong agenda to get more people into streaming than the current state of play here in Australia and in many other territories where far too many services are available and not marketing themselves, causing confusion and apprehension around the business model. This dilutes and delays the result for the category to move forward as a whole. If real brands with good business models behind them help push some consolidation than I am excited to see some strong competition happen.

Spotify also announced a major coup – it has struck an exclusive deal with Led Zeppelin to stream their entire Swan Song/Warner catalogue – a move which is expected to draw thousands of new customers of an older demographic. The British band – who broke up in 1980 and still enjoy healthy sales – has been very slow to get involved in the digital process. It wasn’t until 2007 that their catalogue joined iTunes. The Spotify negotiations lasted for almost a year. “This is a real thrill to me and I want to thank the band for having faith in us,” Ek said.

Only a handful of major acts still don’t have an official presence on streaming services. They include The Beatles, AC/DC and Tool.

NEW TERRITORIES

Spotify: Bolivia, Bulgaria, Chile, Colombia, Costa Rica, Cyprus, Czech Republic, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Hungary, Malta, Micaragua, Panama, Paraguay, Peru, Slovakia and Uruguay.

Rdio: Argentina, Bolivia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Hungary, Israel, Liechtenstein, Luxembourg, Monaco, Nicaragua, Panama, Paraguay, Peru, South Africa, Uruguay, and Venezuela.