What if Netflix and Spotify combined to be the streaming juggernaut of the cloud era? I think they may need to in order to battle the media ecosystems of Apple and Amazon. Apple continues to dominate with legacy DRM media investments of early adopters and the recent wave mobile iDevice adoptees that want easy ways to acquire music/video/games and apps. Amazon has given them a run for their money with similar and often times cheaper versions of the same media… plus books via the Kindle platform. Amazon’s Prime membership recently muscled into Netflix’s realm with a vast streaming video feature, plus free eBook lending and free shipping on everything else they sell (directly). Amazon also offers free hosting/streaming of personal music catalogs with the purchase of basic cloud backup services (similar to Apple’s Music Match with iCloud… the unfortunate only remains of IP gained during the LaLa.com acquisition). It would not take much for Amazon to build-out their a commercial streaming audio offering and throw it in as another free Amazon Prime feature… effectively doing to Spotify what they did to Netflix (btw Netflix is a customer of Amazon’s hosting offering – extra ouch!). Apple doesn’t appear as poised, or interested, to battle on the streaming media front until their premium model fades and/or their imminent Internet TV efforts take off. Netflix has fumbled a bit this year, though continues to be the dominant leader in paid streaming video. They have just a wide enough selection to satisfy the majority of customers, a variety of pricing plans and apps that perform on every device. This past year they joined Google’s YouTube in extending investments in new content by commissioning original series including reviving the sunsetted Arrestment Development show. These serve as good moves in differentiation and page from HBO’s play book (whose premium HBO GO app is a worthy competitor in the space). Spotify has done a bit of original content ‘acquration’ (exclusive publishing of rare existing material) and is well suited to launch a label and bring artists to market independently, too. Where Netflix should watch Spotify is in the realms of global expansion with regard to content licensing and more importantly, creating an application API platform layer on top of the content. Hundreds of brands and companies have created useful and fun utilities as stand-alone Spotify apps inside of Spotify’s (desktop) application. I suspect these will soon port to the dominant mobile app experiences in the near future and create exponential entertainment mashups, collections and fodder for social sharing. Netflix could do much of the same by allowing 3rd party app developers access to their licensed movies and tv shows to build rich, niche experiences …like developing games leveraging famous film video clips or perhaps crowd-sourcing and mapping famous shoot locations to see what was shot nearby. While on the topic, Netflix should also explore borrowing other key Spotify features:
- syncing a designated device for offline consumption so people can take a few films on a plane trip
- creating multiple playlists to make it more useful to families that share an account and could
- reviving the social side of the network by adding options for curating, sharing and subscribing to playlists
Netflix and Spotify will need to continue to build distinctive offerings beyond only delivering other company’s media. It would be wise to quickly corner the market on subscription-based media by uniting funds, forces, and features while forging partnerships with app developers to extend the value of existing investments.