It was one of the worst kept secrets of 2015: after buying Dr. Dre’s Beats audio streaming service for 3 billion dollars, Apple was going to try their hand at music streaming.
On Monday, June 9th, the World Wide Developer Conference (WWDC) took place in San Francisco and the tech conglomerate showcased a few fairly typical products: iOS 9, OS X El Capitan, and an update for the recently released Apple Watch. Amongst these routine announcements, Apple Music was revealed. It is set to be released in the third quarter and will not only be available on the Apple Store but on Android and Windows devices as well, effectively doubling their potential market.
Apple Music will allow the user to stream the complete iTunes catalog for a $10 monthly subscription fee. Apple expects to generate over 100 million subscribers and hopes to shut out competitors like Spotify, Pandora, and Jay Z’s recently launched Tidal due to the sheer volume of music available on their platform. They are looking to raise the bar in the streaming industry and these speculations show that they have high expectations for this new endeavor. Not everyone is convinced though, Spotify has a loyal fanbase that won’t make a switch any time soon and free streaming platforms like Youtube and Soundcloud still have a market share.
Apple is at a significant advantage though, the 800 million iTunes/App Store users they have on file is more than Spotify’s, Tidal’s, and all the other streaming services users combined. This is a good move to bring iTunes back into the spotlight, although it is not struggling by any means, the outlets reputation is not that which it was when it debuted -- nor during the first few years of its reign when it essentially had a monopoly on online music distribution. There are about 700 million active iPhone users (not to mention iPad, Macbooks, etc) which will have the app automatically installed with a 3 month free trial through an update to iOS 9, so it sounds like they are setting themselves up to monopolize again. There is good news for the rest of the industry however, sources have stated Apple will be paying 58% of subscription based revenue to the rights holders of the songs -- this rate does not apply to major labels who have agreed to their own terms with Apple -- a rate that on the surface seems less than the advertised 70% from competitor Spotify, but it is worth noting that Spotify’s rate is based on net revenue as opposed to Apple’s gross revenue based rate, so it is hard to say who is giving artists and labels the better deal without looking at two agreements side-by-side.
What do you use to listen to music on the go now? Are you going to give Apple Music a try? Let us know!