I just switched my whole family from Spotify to Deezer and it was literally a matter of minutes. There are even services that move all your favorites/playlists over and it worked flawlessly.
And, strangely enough, once a sales channel is big enough it can begin taking a bigger slice of profits and telling suppliers what they should be doing (a la Walmart).
The "logistics" of Spotify's business are mostly commoditized (storage, computer, app development), but certainly they have label relationships that would be hard for a new competitor to replicate. But the key part is that for whatever reason 226 million people have given Spotify their credit card number (or local analog) which makes them pretty important to record labels.
I could see Spotify doing the same thing. Particularly around live ticketing, merch, etc.
There's a Spotify playlist for everything, young people regularly share Spotify playlists each other, and for many: the hardest part about switching to another service is losing access to those playlists.
The "official" playlists provide two other functions. One is to initially amplify artists. Record labels can buy slots on these playlists, just like they used to buy airtime on the FM radio stations of yesteryear.
The second is that Spotify can use its own filler muzak on its playlists to keep licensing costs down. E.g. they pay a pianist to play generic "Christmas piano music," make up an artist name, and put a bunch of those songs on its official holiday playlists.
As far as I can tell, its biggest beneficiaries are the 3 record labels who can use Spotify being one of its customers to be able to negotiate better terms with Apple/Alphabet/Amazon.
That sounds like a minor quality of life feature, hardly a "game changer". Do you think this is impossible for other companies to replicate?
They are welcome to do so at any time of their choosing. It's only been an entire decade since the feature launched, I'm sure the competition will figure it out soon. For the most part, the only one I've seen that has more features than what is provided by basic google cast / airplay is ironically Youtube Music.
Tidal sorta has a connect feature, but I've found it to be really buggy (often wouldn't play or wouldn't tell the remote control device what is playing) and not as widely supported.
Apple Music is even worse since tends to rely on AirPlay, which murders quality and requires the remote to stay on the same network as the player.
The end game was always about rapidly burning VC money to acquire more users, while kicking the can of profit-making down the road. Now ZIRP has ended for the time being, the chicken has finally come home to roost.