An interview given on Sunday by Doug Morris, CEO of Sony Music led to a surprising yet understandable reveal: Apple are set to launch their own music streaming service called Apple Music at next week’s World Wide Developers Conference in San Francisco.
Leaked information about the reveal stated that it would be accompanied by a grandiose show in which music industry stars such as Pharrell Williams, Drake and Dr. Dre will take on the role of DJ’s and will stream music through the program in the style of traditional radio. However, Apple’s service is set to take the on-demand approach of popular streaming services such as Pandora or Spotify, while also offering curated stations possibly hosted by real-life celebrities.
However, unlike the aforementioned who also offer free versions of their subscription programs which are restricted by ads, Apple Music will reportedly only have a paid tier plan at $10 per month. Part of the technology will come from repurposing a music streaming service called Beats Music which Apple has purchased in 2013.
This is not Apple’s first foray into music streaming, but its heavily curated iTunes Radio didn’t reach the success it was expected since its similar launch at 2013 edition of WWDC. However, a rising trend in consumer preference for streaming services rather than digital distribution (which Apple revolutionized with its iTunes) have probably convinced the Silicon Valley giant that this might prove to be the future of the music industry.
Statistics pertaining to the Recording Industry Association of America and Nielsen show that on-demand streams were responsible 98% of all digital transactions (in this context, a transaction is considered every time a song is streamed through the service, as artists get paid by number of time their songs are being streamed) with 139 billion compared to just 2.7 billion song downloads. However, downloads are still accountable for the bigger part of digital revenue for the music industry, garnering $2.49 billion as opposed to the $1.31 billion that the streaming services produced.
These numbers may seem odd at a first glance, but reflect a certain reality: most streamers prefer to use the free services provided by legit streaming sites, despite ads or any other obstacles they face which are removed for subscribers. For example, Spotify is currently the most popular music streaming service with over 60 million users worldwide, but less than 15 million of them are actual subscribers.
One has to wonder in these circumstances whether Apple can be able to shake this market with a subscription-only service, but one thing’s certain: part of the over $170 billion in their coffers will be used for aggressive and popular marketing campaigns.
Image Source: Forbes