Microsoft Corporation (NASDAQ:MSFT) has finally decided to shut down its Groove Music service, including streaming, purchases and re-downloads. The service will no longer be active after December 31, 2017.
Microsoft is not introducing any new music service; instead, the company is transferring existing Groove users to Spotify. Users of Groove Music have been asked to migrate all their playlists and collections to Spotify. A preview version of the service will go live this week, with the final version coming on October 9.
Spotify would have been an easy choice for Microsoft, given the fact that it is the largest streaming music service in terms of paid users. Microsoft has also added Spotify support to the Xbox One. It seems the company realized that the online streaming service space has just two leading players – Spotify and Apple.
Joel Greenblatt Owned Hedge Fund On Why Value Investing Isn’t Working Now
Acacia Capital was up 12.27% for the second quarter, although it remains in the red for the year because of how difficult the first quarter was. The fund is down 14.25% for the first half of the year. Q2 2020 hedge fund letters, conferences and more Top five holdings Acacia's top five holdings accounted for Read More
Edison Research found recently that Pandora dominated the music streaming space with a user base of 81 million in the fourth quarter of 2016. However, Pandora does not truly compete with services like Spotify because the former has still not been able to convert its free users into paying customers.
Spotify, which holds second place, is not making money, although it has about 60 million paying subscribers. Meanwhile, Apple Music is witnessing tremendous year-over-year growth with 27 million paying users, and it is sprinting to close the gap with Spotify.
All users who hold a Groove Music Pass will be able to migrate their accounts to Spotify at least until January 31. Those who have a paid pass that runs beyond December are eligible for a refund. The Groove app will continue to be compatible with downloaded purchases and various other locally-stored music, notes Engadget. There is also an FAQ section from Microsoft for those who want more details on the Groove Music closure.
“Killing Groove is the worst thing that could happen as a consumer who tried to be all-in with Microsoft. That dream is over,” said Zac Bowden from news site Windows Central.
Bowden also questions how, without consumer services, the company expects users to “love Windows.”
There are others who know the challenging position that Microsoft has been in when it comes to competition. Tom Warren from tech news site The Verge says why people even used Groove Music is not clear, given that Spotify has always been a superior option.
“Microsoft wasted money and effort for years here,” Warren said.
The company also acknowledged that customers want “access to the best streaming service, the largest catalogue of music, and a variety of subscriptions.”
Groove debuted as Xbox Music before rebranding. Although the service will no longer be available, Microsoft has stated that it will continue to invest in the music app for Windows 10 to make sure that users can still listen to MP3 files stored locally or in OneDrive. Irrespective of the operating system, users will be able to listen to music from OneDrive, but the streaming option will last only until December 31.