Apple's announcement, which came as no surprise, that it was to launch a new music streaming service iTunes Radio, could mean another shift in the way that people listen to music. But what will this platform mean for those of a commercial persuasion. We asked media agencies for their reaction to the platform launch.
Jean Paul Edwards, head of futures, Manning Gottlieb OMD
iTunes Radio is a long waited for move by Apple and it signifies that digital music discovery is ready to scale.It is, in the short term, more of a challenge to the legacy digital players such as Pandora, Spotify and Last FM than it is to local commercial radio stations. The interesting challenge will be in the design of the user experience, something Apple have been brilliant at over the past few years. They have created an opportunity to change behaviour on a mass scale so that a digital device becomes the first port of call for our musical moments.It will in the main be an ad supported platform so the scalability of digital audio discovery ad opportunities (we need a better name for it) will only increase which is good news for Spotify and Co in the long run.
Craig Le Grice, chief innovation officer at Blue Rubicon
Free for everyone and ad-free for iTunes Match customers - which is, itself, a steal at just £21.99 per year - iRadio has real chance of disrupting the music space, just as iPod did before it. All of my owned and rented (streamed) music assets in one place embeds me further in to Apple's ecosystem - which, let's face it, is entirely the point. I won't cancel my Spotify subscription straight away, but if iRadio turns out to deliver what's being promised (or at least hinted at), it's a possibility.
Mike Williamson, head of radio at Carat:
Apple's iTunes Radio will definitely make an impact on the music streaming industry. The more competitive US market is their first target. By the time they launch in the UK in the autumn they will have worked through several challenges, which will be a major worry for Spotify. The strength of the Apple brand and the sheer number of itunes accounts/iphones/ipads will naturally draw users into iTunes Radio. The product presented by Eddy Cue looks the real deal. The simple user interface, and the song history, seem to be the two main standout features. The next step is for Apple to look at the advertiser side. Spotify needs revenue from premium subscribers and they need to attract advertisers' budgets, with advertising revenues at 23.5 per cent of total revenues in 2011. Apple's total revenues will not be affected by how much revenue iTunes Radio brings in, so they have somewhat of an advantage over Spotify. I'm sure they will push all the major agencies for deals but they have other income streams that will bring in the majority of the revenue. Brands will be keen to see what opportunities there are with iTunes Radio. Spotify currently offer age, gender and geographical targeting for advertisers. I'm sure apple will do the same but with a bigger customer base. One thing to note is that Spotify have very close relationships with music artists which have allowed advertisers to run events through Spotify. It will be interesting to see if Apple will have the same relationship, or even want to provide similar experiential events for brands and fans. Another question is around the impact of another music streaming service on the traditional UK radio market. The UK commercial radio market is worth £550m. The market is in good health and revenue last year increased by 3.8 per cent. Yes, there may be a small impact but radio is about much more than music. We listen to our favourite radio station for entertainment, news, traffic and travel information, as well as music. This provides a deep relationship between the station and its presenters, and the listener. This cannot be replicated on music streaming services. The simple power of a DJ talking about a brand has huge traction with listeners, which is why branded content radio revenue was up 8 per cent in 2012. But I do hope that commercial radio stations use the Apple threat as an opportunity to further develop their digital offerings.
