A shakeout in the crowded market for music-streaming services appears to be gathering steam.
Sony Corp. said it is shutting down its $10-a-month Music Unlimited at the end of March, four years after launching it in the U.S. The streaming service, one of the biggest in Japan, is integrated into Sony’s PlayStation consoles and has counted mostly PlayStation users among its subscribers.
In terms of musical content and price, Music Unlimited is indistinguishable from competitors including Spotify AB, Google Inc. ’s All Access, Apple Inc. ’s Beats Music, Rdio Inc., Rhapsody and Deezer, all of which offer more or less the same 30 million songs.
Sony didn’t disclose its subscriber count but Music Unlimited had just north of 100,000 paying subscribers as of the second half of last year, according to a person familiar with the matter.
Spotify—which boasts the music-streaming world’s biggest paying subscriber base at 15 million, plus another 45 million active users of its free service—will now power the music for PlayStation users in 41 markets, in a new partnership with Sony Network Entertainment International called PlayStation Music.
Spotify hasn’t launched in Japan, however, despite negotiating for years with Japanese record labels, which still rely heavily on CD sales for profit. The new music service that will provide the tunes for Japanese PlayStation users has yet to be determined, Sony said.
Andrew House, who oversees both PlayStation and Music Unlimited as the president of Sony Computer Entertainment and head of the company’s Network Entertainment Business, declined to say how Music Unlimited was faring financially. Sony doesn’t disclose subscriber numbers.
Mr. House said he began discussions with Spotify a year ago, when it became clear it would be better for his unit “to concentrate on services that we have tremendous expertise in,” such as its videogame consoles, rather than music subscription.
Sony’s record label, Sony Music Entertainment, operates separately.
The closure of Music Unlimited follows news of a similar fate for Muve, the music streaming service owned by AT&T Inc. subsidiary Cricket. France’s Deezer said earlier this month it was acquiring Muve and migrating Muve’s 2 million users to Deezer. Muve’s mobile-streaming service will be shut down Feb. 7.
At least one Sony executive had predicted that a shakeout was inevitable. In 2012, before Apple launched its free iTunes Radio service, Michael Aragon —Sony’s vice president and general manager of global digital video and music services—told The Wall Street Journal that “it’s going to be a brutal business and there’s probably going to be some consolidation.”
“We all have the same content, we all have the same deals,” said Mr. Aragon, who oversees Music Unlimited.
For Spotify, the partnership provides access to about 64 million PlayStation users, though Spotify Chief Executive Daniel Ek said there appeared to be “quite a large overlap” between existing Spotify users and PlayStation users, judging from their positive reaction to the partnership announcement Wednesday.
He said he didn’t know how many new potential customers the joint venture would allow Spotify to reach.
Write to Hannah Karp at firstname.lastname@example.org
Source = http://www.wsj.com/articles/sony-bails-out-of-music-streaming-1422481528