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Today was generally a good day on the stock market for most technology companies other than Spotify. AMD (NASDAQ:AMD) hit an almost 20-year high and is currently only 10% short from its all-time high of $44 per share. Apple (NASDAQ:APPL) continued to inch up to its 52-week high of $267 per share. NVIDIA (NASDAQ:NVDA), not to be left out, hit a yearly high of $213.

However near the bottom of the list in the tech sector was Spotify (NYSE:SPOT) with a horrible day down nearly 5%. This comes after weeks of steady gains with increasing investor optimism as recent numbers showed strong growth and user-retention fpr the world's top music streaming platform.

What happened Spotify investors? Amazon Music now no longer tethered to Alexa

Spotify's stock price sliding so far wasn't something company representatives said or some other internal issue. What spooked traders and investors into selling off millions of Spotify shares was what competitor Amazon decided to do.

Spotify has both a free and premium version of its service, and so too does Amazon (NASDAQ:AMZN). The Amazon Music Unlimited doesn't require a prime membership or any paid subscription of any kind and is ad-supported. Just like Spotify it is limited in functionality, users can't play specific songs and are restricted to playing channels based on artists or genres.

The main thing to understand about Amazon Music Unlimited (will refer to this as AMU) is that until today it was restricted to Amazon's walled garden. It was launched this past April for devices like Fire tablets and Echo home assistants. Alexa was required to be used to play stations on the service. In other words, not a big threat to Spotify.

All that changed today with the rollout of a greatly expanded version of AMU. Its now spread to every major platform - iOS devices, Android, and now even Fire TV decides (odd that this was exluded before).

This means vastly increased competition for Spotify. It made its name on its free service and its business model revolves around getting users to try it for its free service and then enticing them to go for its premium ad-free service.

According to Fool.com:

Spotify has set up a strong conversion pipeline from free listeners to paid subscribers. It offers a compelling value proposition to get users to sign up for the service: free unlimited on-demand music streaming. Then, after providing more value than expected, it can sell users on a subscription.

If users simply opt for AMU on their iPhone or Galaxy phones then its not very likely they will ever sign up for a paid Spotify subsription.

All this means Spotify might see reduced growth in the coming quarters and for a streaming service that is a huge no-no. If you consider that Apple Music (world's #2 music streaming platform) is basically limited to those that are firmly in the iOS camp, its Amazon (#3 globally) that is Spotify's chief competitor. All those smart TVs and Galaxies and Pixels - its these devices that are the battleground for the masses.

Spotify still remains entrenched at the top and its almost sprouted a social media-type feeling as users often share songs with one another. This was and will always be a very shrewd move by Spotify - to join users social circle with music listening and discovery of new tunes. Make no mistake, Spotify is king for now and for the foreseeable future.

In 2019 Spotify ended the first 6 months with 26% more paying users - 32.4 million to be exact

That shouldn't be going away anytime soon - but for some casual users who simply want to throw on some internet radio with ease - Amazon Music Unlimited will certainly be a new choice that didn't exist for most of them only 24 hours ago.