Apple Music’s huge advantage over Spotify

“Apple Music is clearly aimed at on-demand streaming king Spotify, even matching the $9.99/month price for Spotify’s ad-free Premium subscription,” Alex Fitzpatrick reports for TIME Magazine. “What Spotify offers that Apple Music doesn’t is a free version, which has a more limited feature set and jams your jams with ads every few songs.”

“But that free tier could actually be a massive disadvantage for Spotify. Only about about 15% of Spotify’s 60 million users pay for the service, but their subscription fees make up around 90% of the company’s revenue,” Fitzpatrick reports. “If Apple converts enough of Spotify’s paid users, it could totally decimate Spotify’s business.”

Fitzpatrick reports, “But the biggest advantage Apple Music will have is even simpler than all that: It will be automatically installed when iPhone users upgrade to iOS 8.4 later this month, while iPhones sold with that software on board will have the app pre-installed.”

Read more in the full article here.

MacDailyNews Take: Apple Music has rendered Spotify’s future decidedly dimmer.

The best customers are those who pay. As demonstrated by years of data, form disparate sources, those paying customers are also significantly more likely to be iPhone owners than those who’ve settled for poor iPhone facsimiles. A healthy portion of these coveted customers will leave for Apple’s comprehensive offering which offers better family rates, more music, likely exclusives, and seamless integration across all Apple devices. It’ll even work with crappy Windows PCs and Android phones eventually (not that those are likely to be Spotify’s paying customers, but whatever, some of them will join Apple Music and maybe even graduate to Apple devices because of it).

Spotify could quickly be left with an unprofitable system, with a dwindling music library because they cannot afford to pay music royalties.

SEE ALSO:

Apple Music is a major mess and it won’t beat Spotify or something – June 9, 2015
When Apple Music arrives, what happens to iTunes Match? – June 9, 2015
What Apple Music says about how Apple views musicians – June 8, 2015
Apple’s revolutionary Apple Music just might prove its skeptics wrong – June 8, 2015
Apple unveils revolutionary Apple Music service – June 8, 2015

Study: iPhone users are smarter and richer than those who settle for Android phones – January 22, 2015
Why Android users can’t have the nicest things – January 5, 2015
iPhone users earn significantly more than those who settle for Android phones – October 8, 2014
Yet more proof that Android is for poor people – June 27, 2014
More proof that Android is for poor people – May 13, 2014
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
iPhone users smarter, richer than Android phone users – August 16, 2011
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009

26 Comments

  1. In other words, every paying customer of Spotify’s is subsidising nine other freeloaders… Nice business model, that can easily collapse when those paying customers migrate.

    The point is, very few free members of Spotify will consider moving over to a paying service. However, if you are already paying for something, and there is a service that is better integrated, more streamlined, more intuitive and doesn’t need a separate (space-hogging) app, you’ll be easily compelled to switch. Even if only 20% of Spotify’s customers migrate, that is a colossal hit on a the company’s bottom line, which is still far away from profitability and seems to increase losses as time passes.

    1. Don’t forget that with a streaming service, switching to another service is easy because there are no legacy issues to worry about as you simply start again with the new service, which should offer pretty well all the music you listened to before.

      When you have been buying music, converting that music so that it could be played on a rival music app was not always straightforward.

      Ease of switching of course is a double edged sword for Apple. Customers can instantly join up from elsewhere, but if somebody else offers a better proposition, those customers could equally easily switch to that new service, so Apple needs to ensure that people want to stay with them.

      1. A few Spotify premium members had mentioned here that they won’t switch unless their playlists could be migrated, so this may be an obstacle to some of them.

        Apple’s main advantage is their deep integration across the ecosystem. No external app can have that level of seamless integration, and there will be plenty of small details that will create friction once you try to lave Apple and go elsewhere.

  2. I wonder if some government regulator at some point is going to stamp his foot and say that Apple has crushed enough competitors… and start viewing Apple as a legal target.

    1. They have to have a monopoly first. Which won’t happen. Besides since when have government regulators done anything but roll over for the big corporations and wealthy.

  3. Shhh…!! Don’t tell the EU (especially since Spotify’s home base is in their bailiwick)…

    ….remember that their remedy for MS’ Internet Explorer’s one time dominance was to force the pre-install of a number of browsers that had to be chosen at first start-up….

    1. I would love to have the consumer protections required by the EU as opposed to here where we basically have none. Their healthcare too.
      Not everyone feels the need to be on their knees for the wealthy and powerful.
      Oh and by the way Microsoft was convicted pf multiple felonies because of unfair, criminal, and corrupt business practices.
      Not everyone wants to live in a third world hovel.

  4. What’s worries me is that the presentation of Apple Music was so completely obtuse, I’m not convinced the product has enough focus. What the heck were Iovine/Drake/Reznor talking about? Cue had a decent demo, but everything seemed like a mishmash of previous features (Ping anyone?) that didn’t work the last time Apple tried this.

    As another website succinctly put it, “…muddled messaging often stems from a muddled product, and muddled products come from a lack of focus.”

  5. AppleMusic’s $14.99 family package will pull in a lot of subscribers. It seems like a bargain to me. Many of the people I know who listen to streaming music don’t seem to be fussy about all the bells and whistles the services offer. They like to hear certain artists and that’s what they’ll get. These are just average non-tech users that are easily satisfied. They can easily afford to pay $9.99 to $14.99 a month and don’t think it’s a big deal at all.

    1. That package and pre install on iPhones are really big deals. Plus it combines streaming with all your existing iTunes Music to fill any gaps like the Beatles.
      I pay for both Spotify and Pandora and won’t be after this.
      This should also cause Apple to refocus on Airplay.

  6. Question, do all 6 members on the family plan have to be ISO users, what about those who choose LG smart phones? Do all have to share same physical address, and/or cell provider?

    1. I currently live close to the border of USA, and have itunes account in Mexico & USA, When I or my wife have the USA Account we can listen to iTunes Radio, if im logged to my Mexican account, radio is disabled. I share my USA account with my god-daughter in Texas, and she is able tu use it.
      So I believe location is not a restriction, not Even IP location.

    2. According to the Beats rep I spoke with earlier:

      1. Family members don’t have to be actual family members. They can be aunts, uncles, friends, etc. This means they do not have to reside at the same physical address And just thinking out loud, this would make an awesome gift. One thing to consider is if you stop the service your “family” will lose access unless they become their own main account holders and start paying for the service.

      2. According to the rep the family share will only work on Apple products. So, in your example, the LG probably has an Android operating system, which is not an Apple product. This is how the family sharing currently works (only with Apple hardware), but it’s early days with this new service, so things could change (just my opinion).

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