Music Streaming Services: 5 Tips on How to Build an App Like Spotify

Music streaming services have already become a real craze of modern music lovers and are going to strengthen their position on market. Global life acceleration made people too busy to seek and find suitable music for playlists on different resources triggering audio streaming apps to appear.

Music Streaming Services 5 Tips on How to Build an App Like Spotify

Spotify is considered the best music streaming service on modern mobile market with almost 300 million active users worldwide. This immense surge in popularity was caused by attractive and almost effortless user experience, as Spotify (or Spotify-like services) does all the search work itself offering customers readymade playlist solutions.

In this post, OpenGeeksLab will dwell on music streaming app development, discus essential niche KPIs and give useful tips on how to create own app like Spotify.

What Is Spotify App?

Key concept that made Spotify audio streaming app successful.

Spotify is a music streaming service that became popular providing innovative music listening experience. Unlike other digital music distributors, Spotify does not require purchasing peculiar compositions for legal listening.

Spotify company was stated in 2008 by Swedish developers and raised $21.6 million in investments at the startup stage. Such immense funding proved to be successful, as in 2010 the app has already built music database almost equaling to the one of iTunes, and by the end of 2012 Spotify engaged over 20 million users with 5 million of them being paid subscribers. By the end of 2019, the number of users amounted to more than 65.4 million in the U.S. only, while app’s revenue reached over 6.76 billion euros.

The key concept that attracted customers presupposes that you have no need to store all the music on your mobile phone, as well as there is no single music streaming server that users address to. Spotify stores music files on subscribers’ gadgets, making everyone part of global inner sharing network.

What Makes Audio Streaming App Market Profitable?

Online music streaming services market state.

With the stunning popularity leap, music streaming services strengthen their position on music distributing market. Modern customers give preference to convenient digital audio making physical mediums exclusive pleasures for real adepts. Music streaming, in turn, appears far handier than standard track purchases/downloads. These changes made streaming applications increase their income to cover 36% of all digital music sales worldwide in 2019 (streaming platforms total revenue of $11.4 billion being compared to $20.2 billion collected by non-streaming services).

Music streaming platforms have already attracted about 640,8 million customers in 2020 and these numbers are about to grow till 823,7 million in 2024 with user penetration rate growth 2,1%. With the expansion of user base, industry revenue will increase as well. According to analytical research, current $16,632 million in 2020 will demonstrate compound annual growth rate (CAGR) of 5,8%, which will result in expected music app market revenue of $20,829 million by 2024.

Streaming industry bright perspectives attract entrepreneurs and investors, as there is no decrease expected in foreseeable future. Although Spotify application remains apparent leader in mobile music streaming, other popular online music streaming services include Apple Music, Amazon Music, YouTube Music, SoundCloud, Deezer, Tidal, and there is always place for a new trend.

Core KPIs

Important issues to pay attention to if you want to develop own streaming app like Spotify.

Being aware of most essential KPIs, one increases own app’s competitive chances on streaming app market.

1. Design the Unique App Idea

Unique idea plays a big part if you aim to develop music streaming app. Music app market is saturated with varied solutions – let alone big companies like Spotify or Amazon Music – so to make your app competitive, think over its compelling value. Discover peculiar features that will make your streaming Spotify-like app unique and memorable.

2. Entering the Market

Properly designed business strategy makes a great deal for your app’s future success. Entering the market (especially when you must compete with such giants as Spotify) is extremely challenging, as good idea is not enough. To hit the niche, one must develop elaborated marketing model ensuring quick and efficient user engagement.

Developed promotion company usually consists of traditional marketing means (TV commercials, billboards, advertising partners) combined with social media partnering. Along with traditional promotion, Spotify partnered with Facebook developing social media sharing. Many customers became Spotify subscribers, as their friends shared positive user experience on Facebook.

Another effective tool (used by Spotify as well) is engaging famous industry representatives and influencers to share their exclusive user experience before official streaming app launch.

3. Choose Licensing Type

Licensing appears among top issues to care of while music app development. To create a music app like Spotify, business owner should not only design a unique competitive idea, but also ensure its legal status. Dealing with audio streaming, one must remember about each track having own rightsholders and being subjected to copyright laws.

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As a rule, audio streaming app meets two basic types of music licensing:

1. Sound Recording License Agreement

Sound Recording License Agreement takes hold of recording rights ensuring proper interaction between app owner and record label. To create music player app, one must get streaming permission, which lay mainly in duty of Sony Music Entertainment Group, Universal Music Group and Warner Music Group companies.

2. Musical Composition License Agreement

Musical Composition License Agreement regulates relationships between app runner and composition (lyrics and melody) rightsholder represented either by songwriter or by publishing agency. License compliance is managed by ASCAP and BMI for American performers and by SESAC for European ones.

Being subjected to one/both of these licenses, the streaming app must redirect part of its revenue to music rightsholders. Even market giants like Spotify cannot avoid paying royalties and claim 70% of their income being charged for sound recording and music public performance.

Key Features

Essential features to include into music streaming app development plan.

To build an app like Spotify, business runner should decide on key app features to implement into own application project. Most common app feature set includes:

1. Registration & User Profile

User registration feature is of primer importance in music player app, as profile settings help while designing application customization and creating positive user experience. Besides, customer’s data, like preferences, favorites, or selected items, help in generating relevant music recommendations.

Profile authorization may be designed in traditional way (via username and password confirmed by email or mobile phone number) or through already existing accounts in social media like Facebook, Instagram, Twitter. In either case, music app developers should guarantee user’s personal data safety, so he/she can feel comfortable using streaming app services.

2. Cloud Storage

Cloud services can become a win-win option for music streaming services storing big data amounts on Internet. This feature allows users to access their favorite music compositions from any device supporting app platform and having stable Internet connection. Besides, cloud storages reduce physical data carriers needed to keep all the content available.

3. Search System

Music app search system should provide users with different search opportunities, such as search by song title, performer name, or even lyrics part, combined with advanced filters according to most popular criteria including genre, release year, performer name, etc.

4. Playlists

Creating playlists is a basic feature in any similar app like Spotify. Develop all necessary tools that allow building new or edit already existing lists within the application. Automatized options like grouping tracks according to purpose, genre, or activity are also welcomed.

5. Record Library

As a rule, library stands for customized storage. In terms of designing music app, one should give user tools managing favorite songs, followed channels, playlists. Additionally, developers may add uploading feature, allowing customers add their favorite compositions to library if they are absent in app’s database.

6. Recommendations

Developing proper recommendation engine grants significant part of streaming app’s future success. Using customized profile info (music/performer preferences, favorites, dislikes) algorithms set by music app developers choose similar compositions and offer them to users. Another recommendation generator model presupposes offering customers songs liked by another individuals with alike musical tastes.

7. Social Media Sharing

Social media integration allows customers to share their positive user experience on services like Facebook, Twitter, Instagram. This feature helps users stay in tune with friends and enjoy good music together. Besides, sharing their favorite tracks, users create another influential app promotion tool, as people learn about streaming apps like Spotify from social networks and engage relying on positive reviews.

8. Notifications

Push notifications make customers informed about current events in app, new recommended tracks, or updates concerning friends’ or favorite performers’ streaming activities.

9. Offline Mode

Offline music availability can become a nice bonus feature to your app functionality engaging even more users. Customers living in remote areas or traveling a lot will definitely fall in love with an application feature that allows listening to favorite tracks without an Internet connection.

How Music Streaming App Like Spotify Makes Profit

Main monetization strategies for online music streaming services like Spotify.

To develop a good audio streaming app similar to Spotify is not enough to make application competitive, as big part in platform’s commercial success belongs to proper monetization model. Spotify bet on trendy freemium model representing a win-win streaming market case. Freemium offers wide possibilities of user engagement, covering diverse audience segments at once. Spotify provides free ad-supported application version with limited functionality and subscription full app version, making double source of income.

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1. Paid Subscriptions

Paid subscriptions make the main source of Spotify’s revenue with share of 90%. In Q1 2020, Spotify subscriptions have already resulted in about 1.4 billion euros income and the numbers are projected to increase because of growing demand.

Premium Spotify version provides wider feature set including high-quality track availability and offline Spotify streaming. Spotify subscribers can also temporarily download favorite songs on their devices and unlimitedly skip objectionable tracks. Besides, there are no limits per listening or irritating advertising breaks in Spotify Premium.

Apart from regular app subscription account at $9.99 per month, Spotify created more paid plans specifying user’s needs. For instance, one can buy family account plan at $14.99 per month to share favorite music with family members or student plan which grants discount $5 for college/university students.

2. Ad-Supported Services

Advertisement placement stands among most popular ways of monetizing free apps. Majority of Spotify users have free accounts offering limited streaming features and advertising breaks.

Although paid subscriptions made most of Spotify’s income, advertisements have already made 148 million euros of revenue in Q1 2020. Spotify reached success in monetization of ad-supported services, as it supports diverse ad formats including audio, video and display advertisements. To create profit out of ads, Spotify charges advertisers cost per mile or cost-per-click fees.

1. Audio Ads

Audio advertisements create breaks between songs user listens to. Spotify has certain limit for tracks played without interruption, though it may be temporally made longer.

2. Video Ads

Spotify created several types of video ads. For example, there are usual video advertisements that serve exactly like audio ones appearing after prescribed limit ends, or Sponsored Session ads that can make ad-free listening period longer up to 30 minutes.

3. Display Ads

Display advertisements are overlay images appearing after peculiar user actions like returning to application or screen change.

How Much Will Spotify-Like Music App Development Cost?

As a rule, development cost varies depending on several factors including app complexity (MVP, full-scope functionality), development company location, developers’ hourly rates and project’s development progress (either you need someone to finish the development process or to create an app from scratch).

Going for Spotify-like music streaming app development, one must decide on core features to develop in own solution, as their number and complexity greatly influence final price. To create full-scope functionality with high customization level requires a lot of work to be done, while Minimum Viable Product (MVP) makes a cost-effective development alternative for those who just get started on streaming. Depending on the number of features and platforms (Android, iOS, both) involved, the estimated development time for music app like Spotify varies from 350 to 850 working hours.

Developers’ hourly rates are usually determined by region in which company locates. North American (Canadian- or US-based) agencies are considered the most expensive with hourly rates ranging between $150-$250. Western European development companies offer services at $80-$180 per hour, while Eastern European developers charge from $25 to $80 as hourly rate.

Thus, the total Spotify-like music app development cost will range from $40.000 to $200.000 as of the highest possible price at average development rate. The choice is yours – build your optimal business model and hire proper developers to create efficient streaming solution like Spotify.

Catch Your Chance Right Now!

Music streaming services experience peak of popularity now, attracting more and more startups to try their luck in the industry. Spotify has definitely required a strong leading position among top music streaming apps, though it does not mean you cannot do the same.

Tough competition should not become stop sign for your unique ideas but provoke more inspiration and creativity. The only thing you need is to find a proper development team, while we are always ready to help. Do not hesitate to drop us a line and create your audio streaming app today!

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