Similar to their late entry into the world of digital music players, Apple announced at the Worldwide Developers Conference (WWDC) yesterday that they are joining the music streaming service industry – competing against popular long-standing alternatives like 8tracks, Spotify, Pandora, and Rdio. Planning to launch on June 30th as part of iOS 8.4, the new service dubbed Apple Music has quite a few promising features, including a live 24/7 radio station anchored by DJ Zane Lowe.
Apple music will be a joint operation thanks to their $3 billion purchase of Beats – the headphone and speaker company lead by Dr. Dre and Jimmy Iovine – that occurred about a year ago. It’s set to be available for $9.99 a month after a 3-month free trial, with a family-plan offered at $14.99 a month that gives up to 6 users access to the app. Comparatively, Pandora offers their services for $4-5 a month and new kid on the block TIDAL charges $12-25 a month, so Apple seems to have found a happy medium.
It’s very similar to its competitors in essence, but Apple Music also brings quite a few new things to the table. Besides the regular pick-and-choose style of streaming, it is constantly designing playlists in the background based on what you like. The service links your iTunes library and previously purchased tunes when you first sign up, giving it a footing in your musical tastes. There is also the previously mentioned Beat 1 live radio station – which plays in over 100 countries from three cities and will feature artist interviews, music news, and guest hosts along with the live music – presumably for when the listener gets tired of algorithms and wants more of a human atmosphere. Apple Music is equipped with a ‘New’ tab as well, recommending you recently released songs based on what you like. Lastly there is the ‘Connect’ feature, a social-media-esque section of the app that lets you post photos, lyrics, and audio snippets, while also giving you the ability to directly interact with artists. This interaction component is given to both big and small artists, hoping to help up-and-coming independent musicians and listeners hungry for new content. It’s a bit of a win-win situation.
“The first time an unsigned artist uploads his song to Connect, and then Zane notices it and plays it and puts it on iTunes, and then the world knows about it, well then the world is different,” notes Iovine.
It all sounds quite favourable, but the opposition seems generally unfazed by this new potentially dangerous competition. Rdio, Spotify, and Pandora have all made their feelings on the matter clear, with Rdio taking the high road and posting a warm welcome on their twitter saying:
“Welcome, Apple. Seriously.
Welcome to the most exciting and important frontier since the digital music revolution began 16 years ago.
We look forward to responsible competition in the massive effort to make music available legally for anyone to enjoy anytime, anywhere.
Because what we are doing is increasing the value of music by enhancing each individual’s experience with music they love.
Welcome to the task.”
Similarly, Pandora’s CFO said in an interview with CNBC that he is still confident in Pandora’s position in the market, citing its competitive drive and monetization as their factors for success and adding that they have been perfecting their algorithms for more than 15 years. Spotify, however, has not yet made an address as a company, but during the WWDC CEO Daniel Ek posted a vague tweet which simply reads “Oh ok.” It must have not come as a surprise, as Ek already predicted Apple moving into the streaming territory sometime last year saying that he does not see them as a threat. His tweet has since been deleted but I’m sure his feelings – or lack thereof – have remained. With streaming services steadily growing in terms of subscription sales, Apple is now facing a consumer shift where US song sales fell 12% last year and streaming sales went up 54%, according to an estimate by Nielsen SoundScan. Today roughly $1 billion of a total $15 billion in music sales comes from streaming subscriptions, so it’s not just a smart move by Apple – it was a necessary one.
Although according to iTunes chief Eddy Cue and USAToday, the move was a realization of 15 years of conversations with Jimmy Iovine which began when Steve Jobs and Cue invited the Beats co-founder over to see the first iteration of iTunes.
“It all goes back to that beginning,” Cue explains in a conference room with Iovine and musician Trent Reznor, who was integral to the creation of Beats Music. “And I can tell you, we are as excited now as we were when Steve and I launched that first [iTunes] store.”
“Today, there are too many places people have to go to experience music, and that’s the problem we wanted to solve,” he continues. “If you love music, there are just a ton of places and apps, whether that’s streaming, radio, social, music videos, but it’s messy, it’s hard for the consumer, and they miss out on things.”
Trent Reznor, front man of Nine Inch Nails, also expressed that the new streaming app is a way to aid music in getting the respect it deserves in these modern piracy-ridden times, saying “Music isn’t just digital assets, something to buy online like auto parts. It should be far more special.”
“I know it’s hard for people to understand this, but we don’t look at this from the money point of view, that it’ll help us sell more devices,” laughs Cue, “We’re selling a lot of devices as it is.” He goes on to outline how it seems like more music is consumed today than ever before, yet somehow it feels “less important than it’s ever been.”
“In my opinion, we have failed if we don’t change music [with Apple Music],” interjects Iovine. “We’re like [60’s British pirate radio station] Radio Caroline, we’re offshore and pushing out content, we serve no master but music.”
Despite their strong feelings, the company’s platform shift is already getting a lot of flak from around the net. “Apple faces strong headwinds in this space, with Pandora and Spotify well entrenched and other powerful players, such as Google, making a serious play for the music consumer.” says Paul Verna, senior analyst at eMarketer. On top of all the alternatives, word that the music will stream at 256kbps instead of the 320kbps industry standard is making people especially wary of switching.
Oddly enough, Apple released a similar service called iTunes Radio in the fall of 2013, but it never took off. Maybe this time the added features and the generally high percentage of music-streaming users will mean more people trying it out. It’s going to be difficult trying to make a name for themselves in the music streaming industry with so many competitors, however, Apple’s lagging behind in the smart phone or mp3-player market certainly didn’t stop them from prevailing before, so who knows.