Apple Music is set to surpass Spotify in paid US subscribers

Andrew Liptak:

Earlier this year, Spotify announced that it had 70 million paying subscribers, reaffirming its place as the number one streaming service in the world, with Apple Music a distant second with 30 million as of September last year. In a new report in The Wall Street Journal, it appears that Apple is gaining subscribers at a higher rate in the United States, and will surpass Spotify for the number one spot this summer.

Globally, Spotify remains ahead, but Apple is growing at a higher rate in the US — five percent a month verses Spotify’s two percent per month. The US is the largest market for music streaming with 30 million paying subscribers, and Apple’s growth there means that it’s becoming a serious challenger to Spotify. Globally, Apple tells the WSJ that it now has 36 million subscribers.

The simple fact is that Apple is a multi-industry company which can covers any potential costs and losses on its streaming side with Apple Music through its over revenues and profits where as Spotify is struggling to cover it’s costs and branch the company out. This is why Apple Music will win out long term and the smart money is to switch to Apple Music as consumer.

The entire music industry is just another feature of the iPhone

Nilay Patel for The Verge:

Compare that to Spotify, which is building its entire business around music streaming. Spotify is in a jam right now: the more money it makes, the more money it loses, because of how its deals with the labels are structured. Spotify needs a free service because that’s how it gets people in the door and convinces them to pay, but the labels hate the free service because it doesn’t pay them enough. Spotify needs to add subscribers at a high rate to cover the revenue gap; the best way to add more subscribers is to aggressively sign people up for the free tier, increasing the revenue gap. The flames climb ever higher into the night.

Apple doesn’t have any of these problems, because it just wants people to buy iPhones. You can pay the $9.99 a month for Apple Music and unlock almost all the songs in the iTunes library, or not. It’ll barely dent Apple’s balance sheet either way; the company is doing a music service because it likes music and sees the writing on the wall as digital downloads collapse in favor of streaming services. Spotify has to invent an entirely new business model, but Apple just has to make listening to music marginally easier.

The entire music industry, turned into just another feature of the iPhone.

Now, Apple News could be terrible — it’s built on the wreckage of Newsstand, which did not exactly save the print industry. And parts of Apple Music sure feel like Ping, which has a special place in Apple’s Hall of Pretty Bad Ideas. But none of these products are existentially important to Apple; they’re just features, ways to make the iPhone more compelling and interesting. That’s sort of incredible; it’s hard to think of another company that can just subsume an entire industry in the service of making its products more attractive.

Nailed it. This is why Apple will undoubtedly prevail because they make the hardware that people use to listen to their music on and Apple sells a lot of iPhones.

Tidal Lossless Music Streaming Review: Forget Spotify, Get CD Quality Music

 

Tidal Lossless Music Streaming Review: Forget Spotify, Get CD Quality Music |Forbes:

But from today, there’s a brand-new service that is launching in both the US and UK. Its main claim is that while Spotify offers 320kbps music, it will offer CD quality streaming using the “Free Lossless Audio Codec” or FLAC – ALAC (Apple AAPL +0.16% Lossless Audio Codec) is used on iPhone and other iOS devices. The specs say that you’ll get the full CD sampling rate of 44 kHz, 16bit and at a bitrate of 1411kbps.

Of course the main selling point for Tidal over anything else is the quality. And on that front I have to say that I was totally blown away. I tried several different phones and a PC for my testing. 

Another part of the service is access to 25,000 ad-free music videos in HD. I used this less, but I really like the idea of it being there. In an ideal world I’d be able to stream these to a Chromecast from the app, but that might arrive later. For now, music videos are a nice bonus, but not really a reason to subscribe on their own.

£20 or $20 per month is expensive when compared to other subscription music services like Spotify £9.99 or Rdio £9.99 but then Tidal are offering a level of quality that only QoBuz is currently doing – full lossless sound quality at FLAC 16 bit/44.1 kHz 1411kbps. If you are seriously into your music then Tidal or QoBuz is the way to go with full unlimited music at true CD quality sound but until Spotify and Rdio catch up, that twenty per month might put some people off for the moment.

Taylor Swift Explains Why She Knew Spotify Was Trouble

 

Jordan Crook’s Argument Against Taylor Swift Explains Why She Knew Spotify Was Trouble:

Spotify is not the Napster of yesteryear, nor is it any of the illegal file-sharing sites of today. It is a legal way that millions of people listen to music, and that isn’t going to change, no matter what you do with your albums. What they can’t find on Spotify, they can always find on YouTube.

Why fight against the flow of your industry, like the people who came before you and ultimately lost, when you truly have the power to dictate what the newest version of the music industry will look like?

Interesting points from Jordan and it would need a great many more artists to follow Taylor Swift’s lead for the subscription model to change if at all but maybe the solution for all parties maybe become clear once Trent Reznor and Apple have their say soon:

Trent Reznor talking to Billboard:

I am on the side of streaming music, and I think the right streaming service could solve everybody’s problems,” Reznor told Billboard. “Ownership is waning. Everybody is comfortable with the cloud — your documents, who knows where they are? They are there when you need them. That idea that I’ve got my records on the shelf doesn’t feel as important even to me as it used to. I just think we haven’t quite hit the right formula yet.”
Apple acquired Beats Music when it bought Beats for $3 billion earlier this year. As the chief creative officer of Beats Music, fans are curious as to how Reznor’s role will evolve under Apple’s leadership.
“Beats was bought by Apple, and they expressed direct interest in me designing some products with them,” Reznor told Billboard. “I can’t go into details, but I feel like I’m in a unique position where I could be of benefit to them. This is very creative work that’s not directly making music, but it’s around music. It’s exciting to me, and I think it could have a big enough impact that it’s worth the effort. I’m fully in it right now, and it’s challenging, and it’s unfamiliar and it’s kind of everything I asked for — and the bad thing is it’s everything I asked for.

iTunes vs Streaming Services

Using iTunes has always evolved with us to make sure that if we had legacy music on compact discs but we were entering the iPod era, we could still keep our music collection whilst embracing new technologies that the iTunes Store brought – namely digital music.

As the pace of technology increases ever still, digital music has now evolved to the extent where there are competitions for Apple and their dominant iTunes Store who firmly believe people should own their music. Competitors like Spotify, Rdio to name but two believe that the future of music available to the consumer should be subscription.

iTunes

With iTunes, your music is yours, it’s purchased whether that is digital songs and albums you have purchased via the iTunes Store or whether it’s CD’s that you have ripped to your computer and made available to merge with your iTunes purchases in the service they call iTunes Match. The advantage to owning your music means that is will always be available to you. You can have your music backed up and stored on cloud and local drives – no music company can, in theory, ever take away your music where as if you subscribe to a music subscription company like Spotify, there is a risk – a small risk that in future a music company can remove the rights for their artists with Spotify and therefore you wouldn’t be able to have access to that music as Jason Snell alludes to recently when talking about the video streaming industry;

Streaming-music service libraries are, for the time being, stable. Chances are good that I won’t ever turn on Beats and discover that every Death Cab for Cutie album has vanished from the service’s library.

The same, however, is not true with online video-streaming services. I was reminded of this when I discovered today that the reimagined “Battlestar Galactica” series expires from Netflix on Tuesday. Someone, somewhere, will be in the middle of watching or re-watching that series next week, only to see it disappear. And it’s just one of dozens of items that will drop off of Netflix at the end of the month.

It’s not as if “Battlestar Galactica” is going out of print; you’ll be able to buy it at Amazon in digital and physical varieties, and download it from iTunes, too. Its disappearance from Netflix may coincide closely with its appearance on another streaming service. Who knows?

The point is, if you’re a Netflix subscriber—or an Amazon Prime customer, for that matter—you are binge-watching in a Barcalounger in a rumpus room built on shifting sands. If your service and the owner of the content can’t come to an agreement, if some competitor swoops in offering more money for exclusive rights, you’re out of luck. The rug can, and will, be pulled out from under you.

I love video streaming services. I subscribe to more of them than I probably should, considering that I am now technically a gentleman of leisure. But the constant disappearing of content sours the entire experience.

Subscription Music

If the stability of the subscription model continues to work, then there certainly is scope for switching to the subscription model and moving away from iTunes. Spotify for example offers a paid subscription of around £9.99 per month but this gives you access to the majority of music available in digital format including access to the latest albums and tracks when they are released. This is a very clean way to enjoy your music – apart from the option of downloading your music offline, you don’t need local or cloud storage to keep all this music. This means you can perhaps lean on the streaming way of listening to music therefore requiring smaller storage devices such as 16mb versions of your favourite device instead of the more expensive alternatives.

A subscription company like Spotify is also cross-platform meaning you can access your music on most any computer or mobile device with all your playlists synced across for convenience. If you are the type who likes to purchase music on a regular basis, then the subscription model might be the smart choice. Instead of paying the full price of an album each time, you would just be paying the monthly fee of £9.99 but you can listen to as much music as you like. This would also be beneficial due to the listen-before-you-buy-way that iTunes can’t really offer. If you bought a whole album of iTunes, listened to it and didn’t like it, you might feel aggrieved that you purchased an album you didn’t like. A subscription service like Spotify – this wouldn’t be a problem, you could you delete the album and listen to another with no added expense.

My own use case

I have a large iTunes library of music built up over the years, mostly from ripping my entire CD collection into iTunes then enabling iTunes Match to give me a merged digital library. I also like to purchase the occasional music video from iTunes where I feel sometimes a music video can add even more to a track. This enables me to build up a sort of jukebox of my favourite music videos over the years which I can enjoy on my Apple TV at home.

Although I love music, I am not one of these people who likes to listen to 2-3 albums per week/month – the music that I do buy off iTunes is normally where I have heard a track being played on TV or a friends house or at the mall – it could be anywhere and I obviously utilise Shazam to tag now with iOS 8 buy the songs I hear straight from Siri. The point is, there is maybe only ever around half a dozen tracks per month that I hear and want to own to put in my carefully crafted playlists. I don’t buy albums anymore – I buy singles and make my own playlists to replace listening to an album.

If you utilise podcasts properly, you can also do what I do and collate and listen to great new music, whatever your genre of choice for free that way. The way I looked at it was that for the majority of the year, I pay less than £9.99 per month for new music. I own it, it’s curated by me and there is no realistic chance of it going away.

Owning your music or subscribing to music is down to how much music you actually buy. If you spend more than say £9.99 per month on music, then a subscription service might be the smarter choice. For the generation like me who is from the CD and iPod era, owning your music was the only viable choice. For the new generation, buying music will seem alien to them and subscription is definitely the way of the future.

I am of the CD and iPod era in that I invested a lot of time and money in it back then to readily leave it behind. Maybe I’ll switch in the future. Maybe Beats new owners will have a say on that but for now it’s personal choice – there’s not a lot in it. For me, for the moment – I’ll stick to owning my music.

[Link] U2’s sad show was a swan song for iTunes

 

U2’s sad show was a swan song for iTunes | Cult of Mac

By giving the album away, Apple hammers another metaphysical nail in the coffin of music sales. Digital music sales declined last year for the first time since the advent of iTunes, which hastened the demise of the compact disc a decade ago.

In the face of competition from streaming services like Spotify, Pandora and the Apple-owned Beats Music, there’s simply no compelling reason to own music anymore, aside from picking up a CD when your favorite indie band rolls through town so you can get an autograph (and they can get some gas money).

Plenty of people — digital hoarders, mostly — will undoubtedly grab their free copies of the new U2 album during the iTunes-exclusive window, but how many will actually play the files they download? If you’ve got the Internet, why would you need them clogging up your smartphone or your Apple Watch?

Don’t get me wrong: Music isn’t dead. Nobody will ever stop human beings (or elephants, for that matter) from making music.

But selling records or even downloads? That’s basically a thing of the past.

I wholeheartedly agree with this. Streaming and subscription is the future but don’t write Apple off just yet – they didn’t buy Beats for their headphones (that was a bonus) iTunes will evolve…

Streaming & Subscription is the Way to Go

 

Bradley Chambers:

We’ve actually been doing it with music for years. How’s that tape collection working out for you? What about that CD collection? Can you play that in your new Mac that doesn’t have a CD player? Even digital media has a shelf life. We’ve moved from 128k songs from iTunes with DRM to 256 AAC iTunes songs. Do you think this is the end for digital music quality? As time goes along, formats will change and devices will change. You might own a lower quality version, but what about the new HD format that goes along with those fancy new bluetooth headphones that someone is probably working on? You’ll want to upgrade to new copies of your favorite albums.

Content as a Service (CaaS) is the future. I think Netflix really primed the pump for people being willing to pay for a monthly content access fee. At $9/mo, you get a decent back catalog of movies, a really nice TV show inventory, and a really nice selection of kids shows. Why do I care about owning a movie that I’ll watch one time? Why do I need to own season 3 of Breaking Bad? I’ll probably watch it 1 time. CaaS is also key for discoverability. In my testing of the Beats Music service, I’ve discovered some new artists based on some of the recommendations. I probably would not drop $10 on an album that Beats recommends to me, but I’ll certainly add it to my library and listen to it later. I know that if I hate it, I am only out a little time. With Netflix, if a movie stinks, I can turn it off. If I rent it from iTunes, I’ll be out the $5. A-la-cart pricing for media basically kills discoverability. People will go with what is safe when they are having to make a conscious decision about what to buy.

Bradley makes some interesting points. I have always embraced digital content – i.e. stop buying CD’s, DVD’s, Blu-ray’s etc but now that we have switched to digital, maybe it’s smart to stop buying digital content for when digital is no longer compatible in it’s current form soon. For music, stop buying music off iTunes – get it from Spotify or the soon-to-be-bought-by-Apple Beats Music. Get your movies & TV shows from services like Netflix or Amazon Instant. You pay a regular monthly fee but if you think about it, it’s cheaper than buying/renting 2/3 movies/albums per month and you are future proofing yourself continuously.