Apple wants to be a player again in digital music. But I’m not convinced that its new Apple Music service makes much sense for most consumers or for the company itself.
The new subscription streaming service doesn’t offer much that consumers can’t already get elsewhere. For Apple, the new service doesn’t seem to promise either a profitable new business line or a sales boost for the company’s phones or tablets.
Which may make you wonder why Apple is even bothering.
Long expected, Apple Music was the final product the company announced at its annual WWDC developer conference Monday. Apple Music is similar to Spotify; consumers will have unlimited access to play any song in its catalog on demand for $10 a month. With the service, Apple will finally enter the subscription music market with its own service after long resisting it.
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Apple is seeking to distinguish the service from Spotify, which dominates the streaming music business, by focusing on artists and human-generated recommendations. Artists will be able to create pages on which they can share lyrics, unreleased songs and other items with their fans. Meanwhile, Apple Music will feature a live streaming radio service hosted by human DJs and playlists compiled in part by people rather than computer algorithms.
In a first for Apple, the company will make the Apple Music app available not only to users of iPads and iPhones, but also to owners of Android devices. Consumers will be able to sign up for a family account that will provide access to the service for up to six family members for $15 monthly; for families with more than three members, that’s a considerable discount over what they’d pay with Spotify.
The biggest potential draw for the service is that Apple is promising to provide subscribers access to the entire 30 million-song iTunes library. That could mean that users will be able to listen to artists that have never been available on Spotify, such as the Beatles and artists such as Taylor Swift who have recently abandoned Spotify to protest its practice of offering a free level of service.
But Apple Music has one big shortcoming for consumers and could have some significant other ones. The big one is that unlike Spotify, Apple isn’t going to offer users access to Apple Music for free beyond a three-month free trial period. Nor will users of Apple devices or subscribers to other services get any kind of discount.
Many consumers may not be interested in some of Apple Music’s key features. Beat 1, the new live radio service built into Apple Music, appears to be geared toward younger listeners. That may be fine if you like pop music, but if you like classic rock, country or classical, you likely won’t be tuning in.
It remains to be seen how much Apple Music subscribers or artists will use the new Connect artist pages. Apple’s last stab at integrating social networking into iTunes – dubbed Ping, remember that? – died a quiet death because neither users nor artists paid it much attention.
And Apple Music’s big advantage over Spotify with artists available through the service isn’t necessarily assured. According to a report in Bloomberg, Apple has signed up Swift, but not the Beatles and is still in negotiations with other artists and labels.
But even if the service isn’t a sure thing for consumers it’s got to be one for the company, right? Not really.
While a large and growing portion of the money consumers are spending on music is going toward subscription services, the major companies involved haven’t figured out how to turn a profit on the business. Spotify’s loss got bigger last year, despite burgeoning sales. The same is true for Pandora, the leader in streaming radio services.
Those economics aren’t likely to scare off Apple. Not only does the company have more than $100 billion in the bank, but it famously ran its iTunes Music Store at break even for years. It doesn’t have to make money on Apple Music to be successful.
But times have changed since Apple launched the iTunes Music Store. When that store launched, it was one of the only legitimate ways to buy digital music and the easiest way to get digital songs and albums onto one of the company’s iPods.
The company bet — correctly — that it could create a self-reinforcing model. The more music it sold through iTunes, the more iPods it would sell. And the more iPods it sold, the more music it would sell on iTunes.
The company has recreated that self-reinforcing model with its iPhones and iPads. But instead of music boosting device sales, it’s apps. The more apps available for iOS devices, the more iPhones Apple sells. And the more iPhones Apple sells, the more demand there is for apps.
In this world, music just isn’t that important anymore. Instead, it’s just one of many apps. If you want to listen to streaming music, you have plenty to choose from, including not only Pandora and Spotify, but Rhapsody and Rdio. From that perspective, the only thing special about Apple Music is that it will come preinstalled on iPhones and iPads.
That may be a convenience for consumers and an advantage for Apple Music, but there’s no reason to believe it’s going to help Apple sell any more phones or tablets than it would otherwise. Streaming music isn’t new on smartphones, and Apple Music doesn’t appear to be clearly better than its rivals. Even if it were, you won’t have to have an Apple device to experience it.
From where I’m sitting, Apple Music seems to be more an indulgence for the company’s music-loving executives than a compelling product for consumers or an important one for Apple’s bottom line.