What it is: The music industry changes more rapidly than the technology industry. After dominating the digital audio market, Apple soon fell behind in the streaming audio market. With its $3 billion dollar acquisition of Beats Music, Apple is rebranding itself as Apple Music.
Anyone remember vinyl records? While vinyl records still offer superior audio quality, most people long ago switched to CDs for the convenience. People used to play CDs in their cars and carry around stacks of CDs so they could listen to their music wherever they want.
Then digital audio downloads appeared and decimated the music stores forever. For several years, iTunes dominated the digital audio market by providing people a legal, simple, and easy way to find and get their music to store on an iPod or any other device running iTunes. Yet within a few years, iTunes started seeing declining sales as the world switched to streaming audio services. Now Apple is trying to catch up to the streaming audio market by offering Apple Music.
Beyond the monthly subscription price, the one unique feature of Apple Music will be a 24/7 free Internet radio station run by DJs choosing the music they think people will like. Rather than rely on computer algorithms, this free Internet service will be a way for people to hear different music and (hopefully from Apple’s point of view) buy it as a digital download. If not, they may simply decide to subscribe to Apple Music.
Apple’s free Internet radio station is meant to give everyone a free sample of different music to entice them further into the Apple music ecosystem of iTunes downloads and Apple Music streaming subscriptions. Whether Apple can translate the popularity of iTunes to Apple Music remains to be seen, but they realize iTunes is dying and Apple Music needs to be an alternative before iTunes disappears completely like record stores.
What makes Apple Music particularly attractive isn’t the service itself but Apple’s tremendous brand loyalty among iPod, iPhone, iPad, and Macintosh owners. A certain percentage of those people will likely pay for Apple Music simply because they trust Apple and they want the convenience of making it easy to hear their music on the devices they already own. Rival streaming audio services like Tidal or Spotify don’t have that similar “halo effect” of popular products, so they’ll never gain customers the same way that Apple can.
What might make Apple Music more interesting is the social network aspect that allows artists to connect to their fans. Apple tried this once before with Ping, which flopped. Their new service called Connect could make a difference. Instead of just listening to music through a regular streaming service, Connect lets fans follow their favorite artists in a central location. If connect proves popular with both artists and fans alike, that will be a feature that no rival streaming service could duplicate as easily.
Apple Music’s feature isn’t a sure thing, but it’s likely something interesting to watch in the future. With free Internet radio stations to entice people in and a social network with recording artists to keep them once they try Apple Music, Apple Music has a good chance of success. In the still growing and profitable music industry, notice that Google is also trying to compete but Microsoft is nowhere in sight? After their failed Zune experiment, it’s likely Microsoft is simply ceding the music industry segment of the computer industry to Apple, Google, and anyone else.