Microsoft surrenders to Spotify and kills its own music service

Spotify is trouncing its music streaming competitors, and Microsoft has bowed to this reality. On Monday, Microsoft announced it will shutter its own music streaming service, Groove Music Pass, and encourage its subscribers to migrate to the streaming giant Spotify.

In a press release, Microsoft acknowledged that streaming has become the dominant way people now listen to music (it now far outpaces digital downloads, with over 60 percent of U.S, music sales coming from streaming subscriptions versus 19 percent for downloads), while tactfully admitting that Groove, which grew out of Xbox Music, simply couldn't match the catalog and user experience offered by Spotify:

With the continued advancement of music streaming today, all the world’s music has become easily accessible across a variety of devices, 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.

In an effort to not simply leave their faithful Groove subscribers in the lurch — with their carefully constructed playlists left to dissolve away — Microsoft says that "Groove Music Pass customers can easily move all their curated playlists and collections directly into Spotify."

To further ease the transition frustration, Microsoft also says that some Groove subscribers, who paid $9.99 a month for the streaming service, are eligible for a free 60-day trial of Spotify Premium (which also costs $9.99 a month). Just like Groove's service, Spotify Premium allows listeners to stream ad-free music. Microsoft is facilitating the transition by directly linking instructions in the Groove app on how to switch to or create a Spotify account.

Microsoft will keep the Groove app around, but it won't stream music; instead it will be for users' existing libraries of downloaded music (which most listeners aren't into these days).

Spotify is the logical partner for Microsoft since the other major players in streaming are Apple Music and YouTube, both owned by direct competitors.

As of July, Spotify says that it has over 60 million subscribers, and over 140 million listeners who are not subscribers. Apple Music, which debuted in the summer of 2015, recently announced that it has half the number of Spotify's subscribers, at 30 million.

According to the Music Consumer Insight Report, in August 2017 YouTube received 1.3 billion visitors who came specifically for streaming music — although most of these listeners aren't subscribers. YouTube's ad-free subscription, YouTube Red, is rumored to have far fewer subscribers than both Apple Music and Spotify, at perhaps some 1.5 million as of early 2017.

Music streaming hasn't simply outpaced digital downloads and the purchase of CDs, it's now responsible for supporting America's recorded music industry. According to the Record Industry Association of America, steaming subscriptions now account for six out of every 10 dollars Americans spend on music.