Jun 12th 2015

Apple Music: cash in the bank?

Music streaming is big business these days (unless you’re a recording artist apparently), and it’s Spotify that’s assumed market leader status. It’s made most of the headlines in recent years but not always for positive reasons.

Then in January, Jay-Z bought high-quality music service Tidal – which was re-launched in March – and suddenly the market place looked a bit more competitive. Of course, that’s not to say there wasn’t already plenty of competition out there – Google Play Music, XBox Music, or in some parts of the world Pandora – but Tidal is a service that turned heads, thanks in part to a noisy, crass marketing campaign that certainly divided opinion.

The problem with Tidal, and perhaps the reason it’s currently tanking, is that this isn’t a service your average listener really needs. I didn’t even realise that I only had Spotify set to ‘Normal’ (96 kbit/s) until I read a recent review of Tidal on TechRadar, and that should I so chose, I can stream at 320 kbit/s – or as Spotify likes to call it, ‘Extreme’.

Power up!
Power up!

So why do I need music being streamed in lossless audio? I don’t own a fancy pair of Sennheiser headphones or play my music at home through a Bang & Olufsen sounds system. But then, neither do most people.

The trolls will call me a luddite; unappreciative of the advances being made in technology and clearly an idiot for not being able to tell the difference. I’m not a real music fan, they’ll cry. I don’t ‘get it’.

Actually, I understand it perfectly well. The only people’s pockets you’re really lining at the minute by subscribing to Tidal, are those of Jay-Z and other company shareholders, including Madonna, Kanye West, Rihanna, and Chris Martin. And last time I checked, they’re all filthy rich.

Rather hilariously, reports are circulating that not only are half of Tidal’s shareholders in danger of having their own music pulled down from the service, but that Kanye West is in talks with Apple to release his new album exclusively.

Which seamlessly brings us right up-date with this week’s launch of Apple Music; effectively the amalgamation of iTunes Radio and Beats Music, which Apple acquired in May last year. Now, my colleagues in our San Francisco office will already be familiar with these services, but they are not currently on offer in the UK. Though this is about to change.

So what does this mean for the music industry? The issue over whether or not music streaming provides a fair deal to artists will rumble on and I’m not going to predict when it will come to a head. The reality is, music streaming is here to stay, and artists and record labels are going to have to find a way to work with service providers to provide the best deal for all, not forgetting of course, consumers in the middle of all this. Which I rather think is why Tidal has got the back up of the man in the street.

More specifically though, what will the music streaming landscape look like? Apple has a history of turning up to the party late and leaving with the homecoming queen. They have completely rewritten the rulebook when it comes to first mover advantage because they have been able to deliver a more polished (although not necessarily that much better) product that’s taken into account the early market feedback. And there’s nothing to suggest that they couldn’t do the same thing here.

The early casualties here will be those scratching around at the periphery, promising you something different, but without the brand recognition or early mover advantage to make a lasting impression on the market. We’ve already seen some come and go; Bloom.FM being the perfect example of a service that offered something different – allowing users to ‘borrow’ songs – but folded within a year and a half.

It’s a crowded marketplace, and while iTunes Radio and Beats Music had very limited global availability, Apple Music is coming for you, wherever you are. It’s clear that price isn’t going to be where this battle will be won and lost – at the minute, the difference for a similar quality service is negligible. It will be who can best appease the music moguls, and make deals that ultimately satisfy all parties. Spotify is by no means a start-up. It has over 1,500 employees, and (the timing here is miraculous) boasts 75m active users. But Apple is a colossal beast, and while Spotify continues to operate at a loss as it expands, Apple already has scale, and may feel it can afford to cut better deals with the music industry to squeeze out the competition.

It’s a veritable David vs Goliath, and I just hope David’s packed enough rocks in his sling to bring down this all conquering giant…

I’ll leave the last word on this to Death Cab for Cutie’s Ben Gibbard and Nick Harmer who were interviewed by NME on this very subject (and it is well worth a watch because they talk about the matter very eloquently):

Ben: “One just needs to find whatever works best for them as a consumer, and…

Nick: “…just keep loving music.”


Babel PR