I want to start by saying that I'm not defending Spotify's position, but rather trying to explain it.
The problem with a music-only Spotify subscription is that it's a pretty undifferentiated product with little control over the forces around it. Anyone else can sell what they're selling: Apple, Google, Amazon, Tidal.
Spotify is a tiny company compared to most of those and doesn't control any of the platforms it uses: iPhone, Android, Alexa. While Europe's Digital Markets Act might make it harder for a company to kick Spotify off their platform, that's hardly worldwide. While the DMA might mean in-app payments with lower fees, it's looking like platforms will still be getting something.
Spotify doesn't own the music content that it's streaming. It's getting that from labels and artists.
Not to denigrate Spotify's software or user experience too much, but to an extent they're just a middleman between you and the music you want to hear. I'm sure people will reply about how they prefer the Spotify experience to other services and I don't want to dismiss that, but it's certainly less differentiated when everyone has the same content.
Now with non-music content, Spotify has differentiation. Even if the deal isn't 100% exclusive (since video is going on YouTube), it might still lock out Apple and Amazon. It might also restrict the ability for Google/YouTube to use it in a non-video format. Now there's more differentiation. There's stuff you can (mostly) only get from Spotify.
Even if platforms aren't doing dirty things to harm Spotify, there is often value in being the default in an ecosystem. If you don't have a streaming service, Alexa devices will suggest Amazon Music and you can sign up with no friction at all. That's different from signing up for Spotify and then linking it to my Alexa account. Apple Music is installed by default on iPhones. Spotify has a significant first-mover advantage, but companies that control important platforms and have deep pockets are coming after them. Offering something you can't get from the competition gives Spotify a way to keep subscribers and gain new subscribers instead of being an undifferentiated middleman between you and your music.
The problem with a music-only Spotify subscription is that it's a pretty undifferentiated product with little control over the forces around it. Anyone else can sell what they're selling: Apple, Google, Amazon, Tidal.
Spotify is a tiny company compared to most of those and doesn't control any of the platforms it uses: iPhone, Android, Alexa. While Europe's Digital Markets Act might make it harder for a company to kick Spotify off their platform, that's hardly worldwide. While the DMA might mean in-app payments with lower fees, it's looking like platforms will still be getting something.
Spotify doesn't own the music content that it's streaming. It's getting that from labels and artists.
Not to denigrate Spotify's software or user experience too much, but to an extent they're just a middleman between you and the music you want to hear. I'm sure people will reply about how they prefer the Spotify experience to other services and I don't want to dismiss that, but it's certainly less differentiated when everyone has the same content.
Now with non-music content, Spotify has differentiation. Even if the deal isn't 100% exclusive (since video is going on YouTube), it might still lock out Apple and Amazon. It might also restrict the ability for Google/YouTube to use it in a non-video format. Now there's more differentiation. There's stuff you can (mostly) only get from Spotify.
Even if platforms aren't doing dirty things to harm Spotify, there is often value in being the default in an ecosystem. If you don't have a streaming service, Alexa devices will suggest Amazon Music and you can sign up with no friction at all. That's different from signing up for Spotify and then linking it to my Alexa account. Apple Music is installed by default on iPhones. Spotify has a significant first-mover advantage, but companies that control important platforms and have deep pockets are coming after them. Offering something you can't get from the competition gives Spotify a way to keep subscribers and gain new subscribers instead of being an undifferentiated middleman between you and your music.