Apple has a problem with Music. And the music industry has an even bigger problem if Apple can’t find a less convoluted way to save it. Just between you and me, I’m not convinced Apple’s Music can be a savior.
Apple’s iTunes Music Store was a phenomenal success and owned the music industry for a dozen years, thanks to iPod and a few hundred million Windows PC users who were smart enough to add an Apple gadget to their music collection.
iPod and iTunes set the stage for iPhone’s massive popularity, too. After all, a few hundred million iPod customers were more than happy to buy an Apple iPhone (easy to use, affordable, worked with Windows and Mac).
Then along came a new model for the music industry; one that has yet to prove itself viable, but it took a sufficient number of customers away from buying their music to streaming their music that Apple’s iTunes business began to suffer. To be fair, Pandora and Spotify’s streaming music subscription business pales in significance to iTunes (combined, they don’t have 10-percent of iTunes’ customer base), but Apple noticed the trend, bought Beats Music’s headphone business and streaming music expertise, and eventually launched Apple Music.
How successful is Apple Music?
It depends upon who you talk to. Apple says it’s great. Critics say it’s not but should be (indicating Apple’s clout with music does not translate to streaming music subscription service).
Who’s right? Time will tell, but Apple Music likely will overtake Spotify and Pandora and others in both subscribers and revenue soon (if it hasn’t done so already), but it may not matter. The subscription model has yet to make any real money for any player– streaming service, recording companies, recording artists.
The music pie has been sliced and spliced into so many tiny, well, slices, that few players in the industry can make money. Only the top artists make money, and most of them complain that it’s not much. How bad must it be for new artists or those not backed by major labels. Apple Music won’t change that. Everyone in the industry complains about the inability to make money so what do they do? Give away music for free or nearly free with a subscription service.
Do they plan to make up the losses in volume?
If everyone in the world paid $10 a month to listen to all of the world’s tens of millions of recorded songs, maybe. And that’s a big maybe. Spotify and Pandora and others have had a streaming subscription service for years but can count only 20-million paying subscribers (Spotify). Apple says the Music subscription service has more than half that number already, but they’re still in the free trial period and haven’t had to spend money to listen to music.
In what universe doe this business model work for anyone?