And just like that, Microsoft decided streaming music wasn’t worth it. And handed the crown jewels to Spotify.
They could have bought Spotify for $16 billion. Instead, they decided to exit the streaming music contest entirely.
Here’s an official blog post from Microsoft that terminates the service. It confirms both the closure of its Groove streaming music service, and its intention to transfer its entire streaming business to Spotify.
Microsoft to bring Spotify to Groove Music Pass customers
Music Pass support in Groove and music purchase in the Windows Store to be discontinued; the Groove Music app will continue to support playback and music management of owned content.
With the continued advancement of music streaming today, all the world’s music has become easily accessible across a variety of devices. This is unlocking new ways to discover and experience music. As we continue to listen to what our customers want in their music experience we know that access to the best streaming service, the largest catalog of music, and a variety of subscriptions is top of the list.
Which is why we’re excited to announce the following: we’re expanding our partnership with Spotify to bring the world’s largest music streaming service to our Groove Music Pass customers. Beginning this week*, Groove Music Pass customers can easily move all their curated playlists and collections directly into Spotify.
Plus, you may be eligible for a 60-day free trial of Spotify Premium.**
We’ll continue to update the Groove Music app on all Windows devices to support playback and management of owned music. But after December 31, 2017, the Groove Music app will no longer offer the option to stream, purchase, and download music.
Transition your music with just a few clicks
Beginning this week for Windows Insiders and rolling out broadly next week**, Groove Music Pass subscribers will be able to easily transition existing music collections and playlists to Spotify with a few clicks.
Here’s how:
1. Launch the latest Groove app: Log into the latest Groove app version from the Windows Store or Xbox One. Once you’re signed into your account, you’ll see a pop-up window from Spotify. This will have instructions on how to login or create a Spotify account.
2. Log in to Spotify:
- If you have an existing Spotify account, you’ll be prompted to input your username and password.
- If you’re new to Spotify: you’ll be asked a few basic questions to help you create an account, starting with a username.
3. Move your music: After signing into your Spotify account, we’ll move your music collection and playlists from Groove Music to Spotify.
4. Play music in Spotify: The process of moving your music to your Spotify account will take a few minutes. After completing step three, you’ll be able to listen to your music library in the Spotify app!
Spotify is the world’s largest music streaming service
With Spotify on Windows, music fans will enjoy an incredible music streaming experience with a catalog of more than 30 million songs, popular playlists like Today’s Top Hits, RapCaviar, and Rock. This, plus on-demand access across all your devices (PCs, mobile phones, tablets, home entertainment systems, cars, gaming consoles, including the recently launched Spotify on Xbox One, and more).
Whether you prefer to curate your own playlists or seek inspiration from others, Spotify’s extensive music library offers everything from the classics to classical, pop to hip hop, jazz, country, and the list goes on! Spotify also offers music fans a personalized music experience with playlists like Discover Weekly and Release Radar, so you can always hear your next favorite song.
Exploring the music collection is as simple as searching keywords, browsing playlists, or discovering new music through tunes picked just for your taste.
More partner music experiences to choose from
The Windows Store offers a variety of music services in addition to Spotify, allowing customers to stream or download their favorite tunes wherever they are. Visit the Windows Store for a complete list of music services available.
Our partners are at the center of delivering great experiences on Windows and enabling them to shine on our platform is a top priority. By collaborating closely with industry leaders like Spotify, we can deliver the music customers want and focus on new and innovative ways to experience music.
Thanks to our community for your support on this journey. Feel free to check out the FAQ.
*An update to the Groove Music app including the ability to move music to Spotify, will be available for Windows Insiders beginning this week. The Groove Music app update for Windows 10 and Xbox One devices will roll out broadly the week of October 9, 2017and will enable Groove Music Pass customers to move existing music collections and playlists to Spotify. Groove Music Pass content will be available to move to Spotify until at least January 31, 2018.
**To find out whether you may be eligible for a 60-day free trial of Spotify Premium, check out our FAQ.
In all fairness, there’s precious little reason for Microsoft to stay in the streaming business, much less to shell out north of 15 billion on Spotify.
Microsoft haven’t had much success in penetrating the mobile computing sphere – unlike Apple, say, they’re not shifting hardware that’ll be used to play music. Aside from that, the streaming biz itself is firmly locked up between Apple, Spotify and Google/YouTube and it ain’t looking to change. In practical terms, the next biggest competitors, like Deezer and Tidal, are also-rans at best. The only markets where this isn’t the case – I believe China is one – aren’t markets where Microsoft stands much of a chance anyway, lucrative though they may be in the long run.
Finally – and this addresses the issue of buying Spotify – I don’t believe anyone’s making a profit from running a streaming service. Spotify probably could – if they trimmed the fat (executive compensation, real estate etc.) – but the amounts aren’t likely to be enough to justify the valuation. Given that streaming neither contributes to Microsoft’s existing business interests, nor is a sufficiently valuable avenue in and of itself, why on Earth would they bother with it any longer?
Critical point you’ve raised. If it’s not helping the broader Microsoft mission, why bother?
But in the case of Amazon, for example, you can see a clear enhancement from streaming music – regardless of whether it’s drawing a stand-alone profit. Prime includes streaming of millions of tracks, not to mention great Alexa integration.
No wonder Amazon is coming out a winner (even ranked #2 behind Spotify in one research report I saw)
Well, to be fair, they do have Xbox One, and I suspect most of their users were gamers. That’s a big market, and probably what kept the service running for as long as it has. But I could see where it would make sense to integrate Spotify into it, rather than continue to incur the costs of streaming the music themselves. It’s too bad though. Their royalties were relatively decent.
Microsoft consistently paid a third of penny to publishers per stream. THE HIGHEST rate of ANY streaming service. Incredibly above-board move on their part. Those royalties are collected and distributed through Music Reports. Microsoft was hands-down, THE BEST service out in terms of fairness and accounting.
Circular reasoning: Their rate was highest because their use was lowest. Flat fee systems are a results-oriented conclusion as regards rates. With little activity, Groove was easier to administer and showed higher rates (per stream, not overall).
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Job said one day that streaming was bankrupsy, and this afirmation in the end affected on Microsoft’s business.