Steve Jobs didn’t believe music fans would ever pay to “subscribe” to streaming music. Nonetheless, Apple goes against the wisdom of its founder: the company is expected to announce a new music streaming service at its developer's conference in San Francisco.
The transition from downloading to streaming
Apple first revolutionized the way people listen to music over a decade ago with the introduction of the iPod and the iTunes Store. In 2003, the company’s iTunes Music Store made downloading individual songs the most common way for people to buy music—and made iTunes the biggest music retailer on the planet.
However, music downloads are dying. The industry is moving away from paying for music files and keeping them on the computer or mobile device — instead, streaming is becoming the most popular way for people to consume music.
Heavyweight contender in the ring for Spotify
The Wall Street Journal has published an article looking at Apple's coming streaming service and the industry it plans to join. The new music service will pit Apple against streaming services like Spotify and Tidal. Apple Inc.’s share of 85% in the digital music download market is almost the same as that of Spotify in the music streaming category. Spotify controls 86% of the music streaming industry.
Apple already has some form of music streaming offering in the form of iTunes Radio, but the service is weak at best and its uptake has also remained low. Apple has shown a desire to not only take on Spotify in the streaming music world, but also kill its free, ad-supported streaming service.
Apple’s success in music streaming not only will justify the company’s $3 billion acquisition of Beats last year, but it could also signal a turning point in the music industry.
Tensions are rising ahead of the expected launch of Apple's service
Sources in the music streaming business privately think that Apple's App Store pricing is anti-competitive. Apple charges a 30 percent fee toward any sales through its App Store, and that includes subscription services. That means if Spotify wants to sell its premium subscription service — which usually costs $9.99 a month — through the App Store, it has to raise the price 30 percent higher to $12.99 to pull in the same revenue, while Apple can still offer Beats at a lower price. Spotify and many others in the music industry believe Apple’s App Store tax gives them an unfair advantage over the competition.
Rumoured to be called Apple Music
Apple Music will work on a $10 per month subscription model, with an extremely limited number of songs available to those opting not to pay.
This time around, Apple is expected to use its advantage over rivals: prominent display on the home screen of the iPhone, where the Music app is one of the four main apps displayed on the bottom, next to Phone, Mail and Internet browser Safari.
In April it was reported that Apple had approached artists including Taylor Swift and Florence and the Machine to join the new service in exclusive streaming deals, potentially limiting or curtailing entirely the amount of material which can be streamed on rival platforms.
Apple's new music service is said to let artists have landing pages within the music service to share track samples, photos, videos, and concert updates. Social features are expected to be at its heart with a strong focus on the relationship between musicians and fans.