Why Apple’s glacial response to disruptive streaming music market matters

“Spotify and others have quickly created a streaming music market that has resulted in Apple iTunes being increasingly considered yesterday’s way of consuming music,” Gary Bourgeault writes for Seeking Alpha. “For now the music business won’t have much of an impact on Apple’s top and bottom line either way, but over time the threat is if it is no longer considered a market leader in a number of categories it competes in, which means consumers could choose not only other services, but more importantly, other devices to consume content with.”

“It’s already having an impact on its bargaining power, as it recently was refused a request during negotiations with the music industry to lower its licensing costs, as the New York Times reported,” Bourgeault writes. “That suggests Apple no longer has the negotiating strength it has had in the past; that means in the area of music streaming, it won’t have a competitive edge in pricing, unless it decides to lose money to scale its streaming business out, while its smaller competitors are forced to lower prices in order to compete.”

“It’s important to watch how Apple responds to the streaming music market, and other streaming subscription markets, as that is the future, and how it positions itself competitively will determine its long-term performance,” Bourgeault writes. “At this early stage of the streaming subscription game, Apple has fallen behind. It must work hard to change that in the near future, or it could lose the future, in regard to its gadgets, which is of course where the company makes its real money.”

Read more in the full article here.

MacDailyNews Take: The streaming music market is fragmented among a bunch of smaller players. It is a nascent market. With a competent product, built into hundreds of millions of devices, Apple will have no problem quickly becoming the world’s preeminent provider of subscription music.

Furthermore, describing Apple’s iTunes Radio as a “failure,” as Bourgeault inexplicably does in his full article, is ridiculous. Launched just 18 months ago and only in two countries (United States and Australia) so far, iTunes Radio is certainly no “failure.” In fact, according to research released this month by Edison Research and Triton Digital:

Audio Brand Usage 2015: iTunes Radio
Audio Brand Awareness 2015: iTunes Radio


    1. Ditto!

      Why rent it? Own it. It IS who you ARE.

      Remember those days where flicking through someones collection was a way to find out WHO they were?

      Maybe I just don’t understand, but I have no urge to SIGN UP to a streaming MONTHLY PLAN. Everybody wants to sell you a flipping monthly plan. And from what I hear, “the Kids” are ……lapping it up? What’s with that?

      1. I always thought that ‘who we are’ was a collection of the virtues, values and qualities that we held dear and practiced every day. Now I find out that the difficult work of attaining those traits were a waste of time. I could have just bought a bunch of songs.

        1. Most people are not about virtues, values, and qualities at all. Most people are waterbags programmed to be fat, dumb, lazy consumers.

          Sorry, it needs to be said. Look at the hatred on parade on the internet, the obesity epidemic, and the regular breakdown of civil behavior everywhere from Ferguson MS to the middle east and so on. Sometimes I truly believe the only times this planet saw peace was when humans weren’t part of the equation.

    2. I’ve never enjoyed Pandora or Spotify. Tried them, but they are always changing songs/artists on you. That is fine for a free/radio type service, but If I am going to listen to paid music, I don’t want to listen to bands/songs that I don’t like along with the ones I do like.

  1. ” over time the threat is if it is no longer considered a market leader ”

    do any of those streaming music companies actually make money?

    pandora LOST 200 million last year,

    so Apple should rush into losing money?

    1. I think you’ve identified the common idea behind many of these “advice for Apple” articles: profitability or long-term success doesn’t matter, only market share now.

    1. Exactly.
      Remember, Steve Jobs himself said that people want to OWN music not rent it.
      I LOVE iTunes Plus! BUT it is only $25 per year.
      I simply don’t think most people will pay $10 per month for simply music listening–there are too many other “free” sources.

      They will definitely have to sweeten the pot, i.e., 10 songs you can choose to “keep” every month, even if you cancel the subscription. Now that might be interesting.

  2. Apple does not really care so much about this, compared to something like Apple Watch… As long as you are doing that “music streaming” on an Apple device. Apple profits from selling the hardware. Everything else in Apple’s repertoire are “value added services” (such as Apple Pay and even gigantic iTunes Store), designed to enhance the user experience of Apple’s hardware customers (so that they continue to buy Apple’s hardware products).

    Since third-party providers are supporting Apple’s platforms with acceptable services for music streaming, there is no urgency to do more; Apple is happy take its time… Before deploying something uniquely better that is ONLY for Apple’s hardware customers.

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