Don’t Bet Against Apple Music

At their annual developers conference keynote yesterday, Apple CEO Tim Cook and Jimmy Iovine presented Apple Music — the new music streaming, radio, and connection subscription service from Apple. As a proof of concept Apple is offering the first three months of the service for free. Given their historic success upending the music business (see also iPod and iTunes), I am fairly certain we can expect that Apple Music will be a success and will be the leading streaming music service within months of its June 30 debut.

Apple haters might be quick to remind the world of a service called Ping. Apple introduced Ping as a social media component to iTunes. The idea of Ping was to connect bands and musicians directly with their fans. It failed. Ping faded into obscurity and was closed two years after its launch. Connect is a component of the new Apple Music that is meant to do what Ping failed to. It might work. It might not. But the success of Apple Music does not hinge on Connect.
If you need any evidence of how Apple can re-enter a market after first failing — consider Newton. Apple — prior to the return of Steve Jobs — attempted to give the world a functioning Personal Digital Assistant. Newton failed where 3com/Palm succeeded. But Apple would return to that sector with iPhone, redefining what a PDA could be and spurring the era of the smartphone. Does anyone still use a Palm Pilot? Or a Treo??
Streaming music is a gladiator battle. The reigning champion Spotify vanquished Pandora. In a brash attempt to challenge the champion, a group of music artists banded together with their king and kween — Jay Z and Beyoncé — to present Tidal. Jay Z purchased Tidal and aimed to make it music sharing service owned by the artists themselves. Jay & Company are putting Tidal up against Spotify in a David v Goliath contest, where the biggest thing these Davids have are their inflated egos.
The Tidal artists have a right to challenge the current leader. Spotify has a earned its reputation for ripping off the creators of the music they stream. Their ad-supported, free streaming reportedly pays very little to those who created the music. Because the major music labels have an ownership stake in Spotify, they aren’t complaining. But artists are. Taylor Swift famously removed her music from the service “I don’t feel [Spotify] fairly compensates the writers, producers, artists and creators of this music.” As one of the world’s most popular music acts she has power, and she has struck a blow against Spotify. She is not alone — Radiohead, The Black Keys, Beck, Aimee Mann, and Grizzly Bear — have all protested Spotify’s lack of fair compensation.
In an era where the public was used to getting its music for free (thanks to peer-to-peer sharing), Apple introduced the iTunes 99–cents–per–song model. Apple offered better quality and a simple method to legally obtain digital content. Apple’s success made them the largest music store in the world, and ostensibly killed Tower Records, Sam Goody, and the Virgin Megastores in the US. None of this would have been possible without the infrastructure built for iTunes. iTunes was the cornerstone of their music business and the success of the iPhone and iPad.
Because of its clout, its technology, and its entrenched popularity, Apple is has earned its role as the dominant player in music sales. Apple has what Spotify doesn’t — a proven record of paying artists more than crumbs. Apple has what Tidal doesn’t — the widespread infrastructure of iTunes and a way to get music easily into the ears of its customers. Apple also has the benefit of the other services failings to present itself in a way that immediately positions it as the best option for music sales as a portion of the artists’ revenue. If artists are looking to expand their popularity and reach an audience, Apple Music is their best option.
So back to our gladiator battle, where the behemoth Spotify laughs haughtily at a Tidal wave of spitballs. Suddenly a hush falls over the crowd as the rumble of quaking footsteps rocks the arena. The far end of the stadium crumbles as a Titan steps over the arena walls and spectators and into the center of the ring. Apple has entered the clash and it dwarfs the cowering Spotify. Behind Apple is nearly every other artist not invited to own a sliver of Tidal, following Apple into battle. The Tidal crew see their colleagues protected behind the Titan Apple and meekly ask Apple to buy them. Apple ignores the members of Tidal and they quietly blend in amongst the artists in league with Apple.
Spotify summons the courage to mumble, “But we were first.”
Apple with a thunderous whisper blasts, “Yes. And thanks for showing us what we shouldn’t do.”
One more thing…
Apple Music is the reinvention of iTunes. Not the current iTunes that is a bloated media superstore. The original iTunes that put songs on your first iPod. Apple avoided saying it directly, but my assumption is that Apple Music portends the retirement of iTunes as Apple’s Music portal. It will necessitate a renaming of their movie and television show purchase and rental business. But that rebrand is awaiting the reinvention of Apple TV as more than a set-top box. Stay tuned.

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