
Apple's Plan to Own the Entire Music Industry - heisenbit
http://www.aboveavalon.com/notes/2016/7/12/apples-plan-to-own-the-entire-music-industry
======
rahkiin
I disagree with Exibit 1. Apple Music came much later than Spotify, when
paying a subscription fee for music (or movies/series) was much more accepted
than when Spotify started. I don't think you should compare the two like this.

~~~
digi_owl
Thats how Apple works. They never truely innovate, they latch onto an existing
idea and then market the hell out of it. This works because Apple seems to
have a special attention within the media business, and thus end up being
written/talked about in non-tech circles. Thus the public get the impression
that Apple did it first, even if it has been going on for ages below the
proverbial radar.

~~~
emdd
They identify an existing market and try to do it better than the existing
players. It's not _just_ marketing. That's an unfair statement.

~~~
unknown2374
name one thing (with the exception of macbooks) that apple did better than
anyone else

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deagle50
OSX, Messages (SMS relay in particular), phone hardware, iOS security,
privacy, and battery efficiency.

~~~
stouset
Trackpads too. Laptop displays. The original iPhone for sure.

~~~
seanp2k2
Seriously it took PC MFGs until 2015 to get trackpads to be not awful, when
Apple had great ones like a decade before. The clickpad was copied by
basically every PC laptop maker and I didn't use one that wasn't terrible
until last year. For better or worse, everyone rips off what Apple does, even
if Apple didn't do it first, and the rip-offs are generally really bad. People
buy them thinking that "it's the same thing".

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morgante
Overall, this article is actually pretty poor analysis. It tried to be
analytical but doesn't actually provide compelling evidence or analysis.
Instead, it just presents a 4-step strategy without causal links between the
steps. Worst of all, there's no justification for why Apple would _want_ to
"create an environment for independent artist sustainability" as their end
goal.

I completely disagree with Exhibit 1 (the growth chart) signaling a positive
trajectory for Apple. Tellingly, it looks like the exact opposite of the
Spotify chart: huge initial growth which is rapidly tapering growth. In
contrast, Spotify's growth follows that of a traditional viral product:
growing exponentially up and to the right.

Moreover, I don't think Apple is positioning themselves to succeed. Their
software quality is near an all-time low. [0] They're doubling down on human
curation while Spotify has been doing amazingly with Discover Weekly.

Just look at user reviews. On Android, Apple Music has 3.3 stars. [1] Spotify?
4.5 stars. IMO, Spotify is even able to deliver a superior product on Apple's
own platform. Apple Music continues to be buggy, error-prone, and
significantly less than delightful every time I try it.

[0] This drove me to finally sell my shares after nearly a decade.

[1]
[https://play.google.com/store/apps/details?id=com.apple.andr...](https://play.google.com/store/apps/details?id=com.apple.android.music&hl=en)

[2]
[https://play.google.com/store/apps/details?id=com.spotify.mu...](https://play.google.com/store/apps/details?id=com.spotify.music)

~~~
Spooky23
I agree, sadly. Between home and business I've spent like $750k on Apple in
the last couple of years, and won't buy anything but an iPhone right now.

Apple software for photos (you cannot order different size prints in the same
order) and music is half complete crap.

They can't ship a decent new Mac. They can't do incremental updates on old
Macs. Even the most inept competitors (HP) are catching up hardware wise.

They need to ditch Jony and Cook.

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Animats
Apple could just _buy_ the entire music industry. Total US revenue for the
music industry is $15 billion and dropping. (Revenue peaked in 1998 around $38
billion in current dollars.) Apple revenue is around $225
<strike>million</strike> billion.

Music can only be a side business for Apple. It's just not big enough.

~~~
ewzimm
Also, all this talk about streaming being a new model is pretty silly.
Rhapsody started its unlimited music streaming service in 2001. Apple started
offering paid music downloads two years later. Streaming isn't something new
that's going to revitalize or destroy the music industry, just an old well-
devleoped model that has been growing as people got better mobile speeds.

What Apple needs music for is the branding. Apple attached itself to music
because the industry had the mindshare of cool locked down for generations.

~~~
SomewhatLikely
I've noticed a big difference in coverage over just the last few years. Before
then there were large swathes of content that just wasn't licensed to any
streaming services, unlike today.

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rdudek
I think this article is onto something. I've recently switched over from
Spotify to Apple Music subscription. While it's not perfect, I'm finding the
user experience much better. Also, if a song is not listed in iTunes library,
I can add the mp3's from my computer to playlist and it will automatically
show up on my iPhone as well.

What I would really love to see if a single stream platform that has roughly
99.99% of all music available for streaming. None of this exclusive content
nonsense.

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musesum
Why does the Spotify graph look like the bottom of a sigmoid and the Apple
graph look like the top of a sigmoid. Just a statistical quirk? Or does free +
paid have a higher top line?

How does Spotify's ad-supported free play compare to FM/AM radio, back in the
70's? How much did the artists benefit from radio play, back then? Direct
revenue or promotion?

~~~
AJ007
I think Apple was able to front load a lot of the growth with the Apply Music
free trial. It was long enough that enough subscribers forgot to cancel before
they became "paying" and started getting billed.

Also curious that the writer could talk so much about iTunes while skipping
over how critical free/pirated mp3s were for the iPod success. No MP3s, no
iPod ; without the iPod, it would have been Winamp not iTunes.

The iPod had an advantage in being a very good MP3 player as consumers made
their first step in to getting their music from the internet rather retail
stores. It appealed to all listeners except those that couldn't stand
compression loss. How Apple Music is or isn't accessed from non-Apple devices
along with what incentives there are will make this more or much less like
their original foray in to music.

~~~
musesum
It's interesting how the medium has played out: radio -> vinyl -> cd -> mp3 ->
p2p -> iPod -> iTunes -> radio (as Spotify, Beats, et al)

~~~
tomc1985
Minor quibble, but you forgot tape :)

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limeyy
Most of it seems far-fetched and conspiracy theorylike. Also, it seems this is
the only topic this blogger is writing about? Talk about a niche.

~~~
zepto
Why is it like a conspiracy theory? Surely most companies have ambitious plans
to take over their industry. Obviously most of these plans don't hold up as
the competition responds to them, but that's just the nature of business.

------
heisenbit
Apple has proven very capable in executing multi year strategic plans
leveraging in one area to establish a new product or service in another. Apple
has also proven adept to managing Eco systems along a vertical value chain -
making sure a lot of the spoils go to them but also making sure their
suppliers can manage.

Apple is at the moment lagging in music streaming despite huge investments in
iCloud, Music Match and an entrenched iTunes (getting pushed in my face every
time I plug my phone in). UX matters and iTunes is not convincing. But this
can change. Developing a streaming client is not rocket science if a team
would freed from backwards compatibility concerns.

Apple has a lot it can leverage in the music industry and not by accident:

\- Headphones, Beats Playlists

\- Audio supplier relationships

\- Music, Movie and Book publisher contracts and relationships

\- iTunes client

\- App/iTunes customer billing relationships

\- iPhone platform - leading in higher income customer households

\- App store - monopoly on iOS and growing on OSX

\- Brand

\- War-chest

Apple is in a tricky position here politically. They got their hands slapped
when trying to establish a pricing regime in the book business while being far
from dominant Apple was working with dominant players (who each controlled a
large set of IPR artwork monopolies). The big hurdle is regulatory. Anti trust
law allows building monopolies organically but frowns on using power like
acquisitions by industry leaders or leveraging one strength into another
industry with aggressive loss-leading pricing etc..

Why are we talking these days about setting prices here in a free market in
the first place? Considering the power on the distribution side almost all
artists have not enough power to make level deals. That was always the case
but for a long time artists were free to take their business elsewhere. Then
publishers concentrated. Now streaming channels take in part their place.
Their number is not large either.

Apples proposal for higher payment for artists may make sense for artists and
the whole value chain up to our ears. It is very problematic for newcomers
like Spotify who rely on low costs to acquire new customers. Their lure is the
free tier. Apple does not need this as much as it has already a billing
relationship and less "free" drives demand. Also let's be clear there is no
real "free". Spotify is loss leading by VCs, advertisers in case of radio or
fees in case e.g. Germany.

Apple can't be happy. Unlike a minor new player like Spotify they would get
into regulatory hot water with aggressive loss leading streaming. Changing the
rules to higher streaming fees would shift everything towards paying
platforms. Apple demands a 30% cut and so far has held the line and has forced
Amazon and Spotify to sell their media content outside their App. That again
is something regulators will look closely at. It will be interesting to see
whether Apple can square the wheel.

