[Editor Charlie sez: Mr. Ek, meet Commissioner Vestager….we’ve been hearing this from the “quiet angel” for a while now.]
While competition online starts the same way as that in offline markets, my research shows it often settles very differently online.
Both have seen lots of competitors emerge in a new area underpinned by new technologies. But online, consolidation ends in a high-stakes winner-takes-most “title fight” between the two strongest players.
In search this was AltaVista vs Google, in social media it was MySpace vs Facebook and in business networking Spoke vs LinkedIn. The result is that the victor at this critical juncture goes on to dominate their corner of the market and becomes almost unassailable in that space.
The evidence is mounting that Swedish music streaming company Spotify is on the verge of seizing the crown in music.
Pandora has been for some time the dominant real-time streaming service in the United States. Three years ago it had a clear lead but competition from Spotify appears to be stronger than ever. Pandora was a mass market pioneer in the online “radio” style streaming format where users pick stations and the music is compiled for them, whereas Spotify adopted an on-demand model which has prevailed.