Spotify purchase startup Preact because they don’t want you to go
Spotify have purchased the 4-year-old machine learning start up Preact to help them understand and maintain their subscribers.
Preact uses machine learning and analysis of audience metrics on social media to understand subscribers and learn the best way to maintain, churn and upgrade subscribers as well as drawing in new ones. With their purchase Spotify look to make the best of their current leading position with streaming users and make sure they don’t lose it.
It’s been a monumental past year for Spotify who managed to add 10 million subscribers in just 6 months. As it dominates rival streaming services like Apple Music and Google Play, Spotify are looking to retain this success as well as hopefully translating their many more free users into subscribers. Preact will help them achieve this thanks to their ability to “identify which of your customers are likely to churn, renew or upgrade by analyzing product usage patterns and operational data using big data, behavioral science and machine learning technologies.”
Spotify’s vice president of product, Jason Richman said: “Finding the trends and behavior patterns in our data that correlate with paid subscriptions is incredibly valuable. The addition of Preact to Spotify’s team will help us design experiences that grow our Premium customer base.”
Apple Music are an example of the importance in retaining subscribers to services. Launching not much more than a year ago Apple Music found massive success in it’s first year earning over 10 million subscribers in just it’s first 6 months. However as the 3-months free ran out and the hype died down Apple Music began losing their record numbers, however they’re still doing well with their most recent statement claiming 17 million subscribers.
Whilst Spotify have clearly cemented their place at the top despite the new streaming services launched in the past year. However that doesn’t mean the pressure is off as the music streaming market gets more congested each service is going to have to fight for their rightful place in the world of music streaming.