Apple’s 15th World Wide Developer’s Conference was held today. To say that I was underwhelmed is an overstatement. As a person who owns an iPhone, iPad and Mac – I feel completely stupid and reckon this is what Avid Google / Android users have been saying for years… lack of innovation, more of the same, just in a shiny new package. Now, don’t get me wrong, I (still) love all my iDevices but this 2.5 hour event today left me thinking one thing, “Has Apple lost its way?” Or as Spotify’s CEO put it.. “Oh, ok.” (sigh)
Any who … This post is about the business (or lack thereof) of streaming music so let me get to it. There are, what I consider to be 4 key players in this space: Pandora, Spotify, Tidal and now Apple. I’m writing this post, purely based on my own thoughts (will go back and links / references later). Oh, and let me just say right up front that I don’t care really about Amazon music – it’s too hard to use on my iPhone and clearly Google Music doesn’t fit very well into my iLife. Yes, YouTube is huge on music & videos but it currently has no pay-for-play model, but there is speculation it will soon launch a pay-service as well.
So, here we go:
- Pandora: I can’t imagine anyone pays for this service. I suspect most people who live in this space want free music and are not willing to listen to a few ads along the way – it’s like listening to radio in your car: someone else picks the order, you listed with an ad here and there. (You can indeed listen ad-free for $5 month.)
- Spotify: My service of choice and the first company to really put streaming music on the map. To reference a marketing term I learned while pursuing my MBA, Spotify has the “first mover advantage”. In essence it is the advantage gained by the initial occupant of a market segment. To be honest, this service I think, appeals to regular people who want to listen to music without ads and are looking to have a decent mobile experience – that’s it. Fanciness not required, nor is access to “behind the scenes, exclusive content”. We like music but don’t WORSHIP artists – we’ll just take the music and go on our merry way. To provide some perspective here, Spotify has 15 million paid users! I pay my $9.99 month and go on my merry way – no hassle. And I’m likely hooked for a very long time.
- Tidal: Recently introduced to the market, offering higher quality music than anyone else at $19.99 / month. The market here is clearly businesses / DJ’s / artists – I meant the people who are seriously into music, like a whole lot, who can actually hear the difference in higher quality music.Now, think about this – yes, Tidal has a $9.99 / month package, but really at this price point Spotify wins, if not purely on user experience. Let’s guesstimate here: Assume Tidal has 1,000,000 users who pay $19.99 / month. Now do the math: $19.99 / month * 12 months * 1,000,000 users = $2.8 billion. Is this enough to offset its lack of appeal to middle-of-the-road users? Only time will tell!
- Apple Music: After listening to WWDC today, there’s nothing special here. I actually got really bored. I was completely underwhelmed with the “Connect” experience aimed to draw in a social element – but where’s Twitter / Facebook / Instagram integration – you know, the services people actively use today? (lacking) Beats 1 the 24/7 global radio station led by some tope industry DJ’s seemed the most fascinating but not enough for me to switch. The draw for Apple was to appeal to families: up to 6 people can list (and get their own “space” for playlists, etc. for $14.99 / month; but, Spotify came right out and said it would match that. So what is Apple’s angle? Using its’ $178 billion in cash to squeeze out its’ competition. Cue the DOJ.
These companies are focused on segmenting their not-very-unique service/offering by user group / audience / community. They are not innovating. In addition, musicians and tech companies are doing a disservice to the music industry as a whole by pitting Artist A vs. Artist B. And Apple has been widely accused of starting the downfall of the music industry all by itself by offering “cheap, digital singles. We’ve also seen the continued consolidation of the music industry down to 3 key players (Universal, Sony, Warner). Recently, PBS also reports that in 1999 the music industry was worth a $14 billion dollar industry and in 2001 it was at half that amount, $7 billion. What do you think it’s work today???
I tried Tidal because of the “oh and ah factor” – I mean Jay Z? Beyonce? Who wouldn’t dip their toe in the water? But, that thrill didn’t last long! I have no intentions of trying Apple Music, even though they are offering 3 months free (right on the heels of Spotify offering 3-months for $0.99). Why should I? I mean, the features are the same as Spotify and there will be a learning curve – no matter how small. So for Apple Music – it’s a no for me. #SorryNotSorry (can’t you just see Apple squeezing everyone out then raising prices once they are the only player left int the game? Let’s hope Spotify can figure out a way to survive. Competition is a good thing!