Music is quite a bit different, in that people spend lots of time curating their own playlists and they listen to the same songs repeatedly. It is incredibly annoying to have songs that you want in your playlists but can't get, EVEN if you pay for multiple services.
Making their own content for video has the advantage that most people are OK with opening a new browser tab or an app to watch a specific movie or show.
With music, however, you don't want to run multiple conflicting music players, especially when they don't sync up playlists and seamlessly work together.
I wonder how that will pan out. It's a significant difference.
Yes, i don't think the original content strategy will work out for streaming sites the way it has for netflix and amazon. I'm not willing to open one app to listen to one album and then another app to listen to a different album. I'll use the service that has all the music i want to listen to. Whether that's piracy or youtube playlists or spotify. If any streaming service starts getting too many exclusives, it's going to just kill the entire streaming market.
From my perspective, all the streaming services should be working together to create a healthy marketplace for independent music, and providing every opportunity they can for musicians to avoid signing a big-four contract. If Warner and Sony, and UMG get their act together and create a joint venture streaming service that's the exclusive host of the content they own, Spotify, Google Music, and Apple Music are screwed.
That is basically what happened with Hulu. The service is owned by the major content providers, such as Fox and CBS, and all of the televised content is almost completely exclusive on Hulu now, as opposed to being on Netflix. As more and more shows started to get pulled from Netflix, Netflix had to rely on original shows to make sure that they have a full catalog of streaming content. They paid over $6 billion dollars in creating new shows for 2017.
Unfortunately for music, the exclusivity has started to show up in some cases. Artists that own the Tidal service don't allow any of their music on competing services, and Apple has been signing contracts with musicians to have new content show up on their service several months in advance before it does on other services (like Jay Z and Kanye).
It's been kinda the reverse in video, if my recollection of the timelines is right. Netflix's big push into originals and dropping of licensed content started to happen 4+ years ago, well before Hulu seemed to have the budget to get big shows into their back catalog.
From Netflix subscriber numbers, it's also not clear that the lost content has dented their subscriber retention at all. The talk among my friends centers much more around new Netflix originals (or even Amazon/Hulu originals) than around back catalog stuff on Amazon or Hulu. I don't understand why -- I'm utterly uncompelled by 95%+ of what they're putting out, since I don't have the motivation to deeply investigate new Netflix shows/movies every week, and however they're advertising, it doesn't really reach me -- but it's what I see happening, much to my annoyance.
If they sign on 100 top artistes, it will devalue the portfolio of music held by the top 3 - for reasons you explained. Thus, the top 3 are incentivized to collaborate with Spotify.
Making their own content for video has the advantage that most people are OK with opening a new browser tab or an app to watch a specific movie or show.
With music, however, you don't want to run multiple conflicting music players, especially when they don't sync up playlists and seamlessly work together.
I wonder how that will pan out. It's a significant difference.