"There's not enough listeners for the number of music services. If your service stumbles, it's easy to move onto something else, so you really only get one or no chances to convince your potential customers."

I agree, and even feel more strongly about it. Even if you don't stumble, it's hard to compete with Google and Apple at this point, because they have their services tightly tied in with their other products. Buy an iPhone (hell, or even a laptop or tablet), and Apple Music is integrated out of the box. Same with Google Music.

Personally I think Spotify is doomed to fail (for various definitions of "fail") for the same reason. There are some people who want their music decoupled from their OS/hardware, but I think there are so many more than want it to "just work", and I think that Apple & Google have a better shot at that than anyone else, at this point.