Back in May last year, rumours started to form that Apple were going to create a streaming service when they purchased Hip-Hop mogul Dr Dre and music industry veteran Jimmy Iovine’s Beats Music. But considering Apple’s cash mountain grew to a staggering $178 billion in February due to it’s huge popularity in the mobile phone, computer and tablet market, why would they still be interested in the music industry? Apple, the biggest of any public corporation in the world, makes more money every three weeks than the entire recorded music industry does in a year; why would it still feel the need to associate itself with music?
Apple transformed the global music industry in 2003 with the launch of iTunes and it’s clear from their Worldwide Developers Conferences last week that this is still something they’re very proud of. With music downloads falling rapidly and streaming popularity rising, Apple desperately needed to transfer its iTunes digital downloads business model to a subscription streaming one, or watch from aside as Spotify is heralded the new king of music revolution.
“Music is such an important part of our lives, and our culture,” said Apple chief executive Tim Cook. “Apple Music will change the way you experience music forever.”
How so exactly? By creating a “bigger and better ecosystem with the elegance and simplicity that only Apple can do, one complete thought around music” according to Jimmy Iovine… But what exactly would this entail?
Apple Music can be split into three different sections: firstly, the most surprising and by far best kept secret in the aggressive rumour mill lead up to the Apple Music’s announcement, a 24 hour global radio station titled Beats 1. Headed up by acclaimed Radio DJs Zane Lowe in Los Angeles, Ebro Darden in New York and little known Rinse FM DJ, Julie Adenuga from London, this showed that Apple is not only gunning for streaming companies, it’s gunning for radio broadcasters too.
However, the station will be accompanied by non-live stations similar to Pandora, with rumoured guest DJs to be announced and the selling point being that these curated playlists will not just be decided by in depth algorithms, but with a ‘human touch’.
“Algorithms are really great, of course, but they need a bit of a human touch in them, helping form the right sequence” said Iovine to The Guardian briefly after the launch. “You have to humanise it a bit, because it’s a real art telling you what song comes next. Algorithms can’t do it alone”. Which could lead you to consider, is Beats 1 just a rebranding of the unsuccessful iTunes Radio, using the global 24 hour radio as an offering to entice customers in a second attempt to take some of Pandora’s 80 million strong successful business model?
Radio aside, there’s also the core of Apple Music which is essentially a Spotify replica in Apple’s slick packaging. Whilst this may be the most underwhelming part of the Apple Music announcement in terms of innovation, it’s down to the rumored exclusives which could really give it the push it needs.
Finally, there’s the Apple Connect feature which for all intents and purposes is a social media network for musicians, allowing them to post songs, videos, photos and status updates which you can comment, like or re-share to other social networks. It’s like a hybrid of Soundcloud, YouTube, Instagram, Facebook and Tumblr (or at least that’s what Apple are hoping for).
This might provoke a sense of de-ja-vu for some who may just be able to remember Ping; Apple’s ridiculed first attempt at social media launched as part of iTunes in 2010, which shut down just two years later. The difference being that this time it’s only the musicians that can submit the content. Yet the issues that Ping faced still stand now: is there really a need amongst consumers for another social network in an already crowded market? Whilst artists with big audiences will happily submit content when offered featured placements on the streaming app, will there be a big enough audience for other artists to make it worth using?
Pricing was one of the most eagerly awaited factors in the announcement of the program. Despite several rumours claiming it would undercut Spotify, with suspicions first being raised in October last year at the price of $4.99 a month, followed by $7.99 in February, the price which was officially announced on the day as $9.99 a month – matching that of Spotify.
Although, this would only be after a three month free trial, with the intention being that this will be enough time to win over consumers from Spotify’s iron grip. The game-changing moment of Apple’s conference came in the announcement of the family package payment option, priced at $14.99 shared between six people. This was the moment where Apple showed the potential it has to make it in the mainstream market; by targeting families as a whole at such an accessible price, this is intended to bring older demographics into reach and target the younger demographics who can’t afford to pay for a streaming program, plenty of which presumably dominate Spotify’s ad-based tier.
The question is, should Apple Music be celebrated or feared? Like any market, competition is healthy and Apple has been known in the past for wiping out competition at an unapologetic rate. Yet unlike iTunes, Apple Music is entering the streaming market at a different stage to that of the digital downloads market, one that it played no part in creating and is already saturated with established companies.
However, while Apple hasn’t played a part in creating the streaming market, there’s no doubt it will play a leading role in establishing it, something that the recorded music industry desperately needs if it is to ever see growth again. Compared to Spotify, which operates in 52 countries, Apple Music is opening in over 100. As the expression goes, a rising tide lifts all boats and Apple has the marketing budget to bring streaming into the mainstream on a global scale and shine attention on other streaming companies whilst doing so.
There are over 7 billion people in the world and only 41 million paying subscribers to streaming services. I have no doubt that Apple will change this, not because of their affordable family packages or even because it will be pre-installed into every iPhone with the next iOS update (as that didn’t seem to help make U2’s latest album a success). Apple Music will be a successful because of it’s simple accessible interface which is approachable for so many different people, as Jimmy Iovine said “the elegance and simplicity that only Apple can do”. From the first iPod through to today, isn’t that the reason that all of Apple’s devices continue to do so well?
Article by Matt Newton
Matt Newton is a Music Business student at the British Institute of Modern Music in Brighton and a Junior A&R at Diverse Music Solutions.