Newsletter #99 June: Get With The Programme Apple

13 Jun 2013

Whether you think Apple has helped or hindered the music industry, it is, of all the tech giants, the company most readily associated with music, thanks to the legacy and success of the iPod and iTunes.

Apple’s next big music move was unveiled with the long-expected launch of iTunes Radio at the WWDC conference on Monday.  In its product updates, religiously watched by millions, the company continues to emphasise the value of music to its ecosystem, no less so with this.

The commercial goals of the iTunes Radio service seem clear –  to bolster sales of Apple devices with richer content offerings and to encourage more music purchases from the iTunes Store.

A quality music discovery tool easy enough for anyone to use could be very valuable in terms of selling downloads, to the benefit of both Apple and the record business.  The launch of this service could also be viewed as a logical and relatively easy land grab for market share on Apple’s part. It also ties-in with another of the announcements at WWDC – that iOS devices would soon be installed in many new car dashboards across 2014.

Quite simply, if Apple is getting into cars, it needs a radio solution too.

iTunes Radio could be criticised for its lack of ambition however, appearing to be hardly more than a restricted internet radio service akin to Pandora (a digital music veteran at 13 years old).  At this early stage, it is not a visionary product so much as an incremental, cautious evolution, although, as Mark Mulligan points out, this consolidation approach is probably good for the music business in the long term, as a healthy, sustainable iTunes division is of critical importance as a partner of significant scale.

Is it too cautious though?  A whole digital music consumption revolution is taking place, which has nothing to do with algorithmical recommendation engines like iTunes’ Genius (launched in 2008 but a critical part of iTunes Radio), or Pandora.  New consumer behaviours are changing and being changed by things like YouTube channels, Spotify apps, Soundcloud innovations and Facebook/Twitter music integration.

The immediacy with which you can access other peoples’ tastes, whether you know that person or not, is something that Apple completely failed to capture with it’s ill-fated social network Ping.  The revolution is in peer-to-peer recommendation and discovery, and currently Spotify beats Apple’s offerings hands down in this area, with its Facebook/Twitter inspired social features and impressive playlist functionality.

Given the months of negotiations with labels and publishers that Apple went through to create a bespoke radio service, rather than simply getting a Soundexchange non-interactive statutory license as Pandora did (and moans about), it would be a shame for Apple not to build in functionality that recognises these changing trends in music consumption.

iTunes Radio, as we understand it so far, does not appear to properly address this shift, despite apparently featuring curated ‘radio stations’, with one being based on what is trending on Twitter.

Another tech giant’s offering, the awkwardly titled Google Play All Access Music, is more forward thinking, combining the features of iTunes Match+Radio+Store, Pandora and Spotify. It is accessible on desktop but also, critically, across Android and (soon) iOS platforms.

In  context of Apple’s announcement, Google seems to be moving faster and with more flexibility, although of course when it comes to music, it lacks market share, strong branding and customer credit information.

Other big tech firms continue to release products with fully-featured music services baked in, without much fanfare – Microsoft and Sony both had big video games focused press events at E3, on the same day as WWDC, that mentioned their respective Xbox Music and Music Unlimited services only in passing.

It is taken as read that a consumer can access 20+ million tracks from within any of the tech giants’ ecosystems, all good news for the recordings business.

But when it comes to Apple – the biggest partner and download store of them all – YouTube/Google, Spotify, Soundcloud and others still appeaer to have the innovative edge in this new music economy, at least for the time being.

Editorial by Sam Shemtob & Tom Quillfeldt

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