Apple has finally jumped into the music streaming race, unveiling Apple Music at WWDC this afternoon. The company revolutionized digital music with the iPod and iTunes, but is now playing catch up, trying to align itself with the current era of subscription offerings. Apple CEO Tim Cook saud,
"We’ve had a long relationship with music. And music has had a rich history of change, some of which we’ve played a part in."
The service will bring music downloads, streaming radio, and a streaming music service into a single app. Like most digital services, it promises to learn your tastes and recommend great new songs accordingly.
The service will cost $9.99 a month, or $14.99 for a family plan of up to six individuals, with a three-month free trial. In order to use the family plan, you'll need to have iCloud Family Sharing active. By contrast, Spotify offers a two-person subscription package for $14.99. Apple says its new music service will be available June 30th, with Android coming in the fall. Apple had hoped to shake things up by offering a tier priced between $5 and $8, but unfortunately couldn’t get the music industry on board. The end result is a product that has little to differentiate it from what is already in the market in terms of price and selection. The 30 million tracks on Apple Music are also going to be found on Spotify or Rdio. Apple is hoping features and exclusive content will be enough.
What Apple Offers With and Without Paid Membership (Click Image To Enlarge)
Paid Apple Music users will be able to download albums and playlists to play offline, while free users will only be able to listen to Apple Music radio stations with limited skipping. The company has rebuilt iTunes Radio and reportedly staffed it with big-name artists like Dr. Dre, will.i.am, Pharrell, and Drake acting as DJs. It is also bringing on experienced talent like BBC’s Zane Lowe to help curate stations. Jimmy Iovine, who has been heading up Apple’s renewed push into music, reportedly tried to sign other big names like Kanye West and Beyoncé to exclusive deals, but lost out to Tidal, a rival service recently launched by Jay Z and a consortium of high-profile musicians.
The first station is called BeatsOne and will be available in 100 countries. It's going to be playing tunes around the clock and will be anchored by three DJs: Zane Lowe, Ebro Darden, and Julie Adenuga. Subscribers can skip as many tracks as they like. Apple's Eddie Cue says,
"The music it recommends to you isn't just algorithms, it's recommendations made by our team of experts."
Apple Music provides regular streaming, music radio stations with DJ's and Connect, a social network for music artists, which gives you direct insights of what artists are doing right now (Click Image To Enlarge)
This is pretty much the same pitch that Beats made when it launched. Users who signed up for that service will find their accounts transferred automatically to Apple Music when the latter launches on June 30th.
Apple also showed off a feature called Connect that lets artists upload music, photos, and messages which are shared with their fans. It's basically a blog fans can subscribe to, then comment and like individual posts. This is similar to the exclusive behind-the-scenes material that Tidal has been sharing from its cadre of artists.
Drake came onstage to show off Connect. He said as a child he wondered if he or anyone from Canada could make it big in the world of rap. Luckily technology was there to help.
"The dream of being a new artist like myself five years ago and connecting directly with an audience has never been more close or reachable."
He will be releasing his next album, obviously, on Connect.
There is some cool Siri integration. You can ask it to play a particular artist or track. You can also give it a more general query, like "play the top track from the summer of 1982," or whatever year you happened to have graduated from high school. But Apple says you don't need your iPhone present — you'll be able to sync songs to your Apple Watch without it.
The big question is whether Apple needs to differentiate to succeed. It is entering a market dominated by Spotify, which has racked up over 60 million users, with 20 million paid subscribers. Spotify has had the run of the land since it came to the US from Europe in 2011, but with over 800 million credit cards on file, Apple has a chance to quickly assemble a large user base and give Spotify its first true challenger. If it can get people who purchase a new Apple device to sign up for a free trial, it may end up bringing a large number of new users into the streaming music market that up until this point were not convinced to give a paid service a try.
COMMENTARY: Apple's announcement of Apple Music and integration with SIRI, the iOS personal assistant, is probably sending shockwaves throughout the music streaming landscape, particularly with industry leaders Spotify and Pandora. Daniel Ek, CEO of Spotify, one of the leaders in the music streaming space, reacted to the Apple Music announcement with a flippant tweet: "Oh, OK" The smug reaction by Spotify's CEO comes after his company closed a $526 million funding round. Ek can afford to react smugly given that Apple Beat, the predecessor to Apple Music, really wasn't much competition (See below). However, that smugness may be shortlived.
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Spotify is building its defenses against the oncoming Apple Music onslaught, turning to international investors to strengthen its financial position. The Swedish streaming service latest funding round, gives it an influx of cash that The Wall Street Journal says brings Spotify to a valuation of $8.4 billion, up from $5 billion last September.
Spotify began this latest funding round in early April, and was originally seeking $400 million to reach a valuation worth double that of competitor Pandora. The successful round means that Spotify has now pulled in more than $1 billion from investors, but even with that influx of money and 20 million paying subscribers, Spotify's future is not entirely secure. The company's business model means it still operates at a loss — the Swedish firm has to pay almost 70 percent of its revenue to label owners and musicians for rights and royalties.
The half-billion dollars taken during during this funding round show that the business world still believes in Spotify, but it will need to either renegotiate how it pays labels, or start convincing more of its 60 million users to part with their money if it wants to stay on top in an increasingly crowded marketplace. The company is already attempting to diversify by adding videos and podcasts but its competition is growing too. Established competitors such as Rdio and Pandora are still fighting for users, while new entrants backed by big names, such as Jay Z's Tidal, enter the fray.
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For all its fanfare, Apple Music is not fundamentally all that much different from what Spotify has been doing for the past nine years. Casey Rae, the CEO of the Future of Music Coalition, says.
“If Apple is serious about 100 million subscribers, the product will need to be an awful lot more compelling than what is already on the market.”
The Apple Music announcement is good news for Spotify too—millions of people are paying for its service. And millions more are using its free, ad-supported option, an alternative that Apple doesn’t appear to be offering. Even if those 20 million paid subscribers ditch the Swedish service, Spotify will still have millions of fans—and the revenue that comes from advertising to them.
Longtime music analyst Bob Lefsetz in a blog post says Apple is not going to be a Spotify killer.
“Turns out to win, or at least play the game in a meaningful way, you’ve got to have a freemium offering. And Apple Music does not. Those already desirous of paying for streaming already do, and getting someone to switch is difficult.”
So, yeah, Spotify is unimpressed, and it wants you to know that. On Monday, after Apple announced Music, the company’s CEO Daniel Ek tweeted, “Oh ok,”according to reports, though the tweet has since been taken down.
What Apple has going for it are its well over 200 million (as of November 2014) paying iTunes users. The big question now is: How many of these loyal iTunes users will convert into music streamers? Apple iTunes users were buying/renting single songs or albums, not streaming tunes like users at Spotify or Pandora. If iTunes users convert into music streamers, will they be willing to pay for that service? It is quite possible that they are already getting their music streams from Spotify or Pandora, so it gets interesting trying to predict whether they will dump Spotify or Pandora, and move to Apple Music to get their daily music streaming fix.
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Unlike Apple Music, Spotify and Pandora have been offering FREE music streaming (albeit it with some limitations). I have never known Apple to offer FREE anything, except for apps (which are usually crammed with ads). Will Apple offer freemium music streaming like Spotify and Pandora? I have a feeling that they might be forced to do just that, in order to pull away users from Spotify and Pandora. This maybe in a limited form like "Three Free Months" or "Buy One Music Album, Get 10 Free Music Streams."
However this all turns out, we should know rather quickly, perhaps within 3 to 6 months, whether Apple Music will become a "Spotify or Pandora Killer." Stay tuned for more on this topic.
Courtesy of an article dated June 8, 2015 appearing in The Verge, an article dated June 2, 2015 appearing in Digital Music News, an article dated June 8, 2015 appearing in The Verge, an article dated June 8, 2015 appearing in Gizmodo, an article dated June 10, 2015 appearing in The Verge, an article dated June 10, 2015 appearing in Wired
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