Analysts examine Apple Music streaming service unveiling

Source: Apple

Apple has unveiled the details of its much-anticipated music streaming service called ‘Apple Music’ at its annual Worldwide Developers Conference.

The company that revolutionized the way we listen to music with iTunes is now making its foray into a cluttered space that already includes established players including Spotify and Pandora.

The service costs $9.99 per month or $14.99 for a family plan of up to six people. It will be available on 30 June with a three-month free trial.

It differentiates itself from competitors with features including ‘Connect,’ which lets artists upload music, photos, and messages to share with fans and Siri integration that allows users to ask it to play a certain artist or track.

James McQuivey, vice president-principal analyst at Forrester Research, said: “Apple is arriving late to the music streaming business, due in part to Steve Jobs' refusal to believe that music subscription services would ever work. But the writing is on the wall: digital downloads don't make sense for consumers that are connected wherever they go.”

McQuivey added that he thinks Apple Music could serve as a legitimate rival to Spotify, “but not because its service will be any better - but because it can build its new music service into the hundreds of millions of devices that its loyal Apple users already love.”

He expects Apple to catch up to Spotify’s paid subscriber base in less than a year.

Nick Davidge, partner and executive creative director at GreenLight Media & Marketing, said that the new service threatens to fragment an already saturated landscape and could have a negative effect for advertisers in the short term.

“Unlike Spotify or Pandora, Apple will not be offering an advertising supported version at launch. With Apple boasting a staggering 400 million iTunes accounts worldwide, capturing even a small portion of these users would pull subscribers from ad supported platforms, making it harder for brands to reach a wider music audience through streaming services,” he said.

However, Davidge added that there is a light at the end of the tunnel for advertisers.

“Apple’s innovative Connect feature gives artists the ability to reach their fans directly through a blog-like interface. It’s unclear yet whether video is supported but it seems inevitable that once introduced, it could be a huge opportunity for smart brands to do deals with artist to co-create more integrated video content for their channels," he noted.

Paul Verna, senior analyst at eMarketer, said: "Apple's roots in the digital music industry and its history of pioneering disruptive technologies make the company a natural candidate to take music streaming to a new level. However, Apple faces strong headwinds in this space, with Pandora and Spotify well entrenched and other powerful players, such as Google, making a serious play for the music consumer."

According to eMarketer, ad spending for online and mobile radio in the US is estimated to reach $2.75bn this year, up nearly 30 per cent from $2.15bn in 2014.

The marketing research firm also predicts that nearly 100 million US smartphone users will listen to music via streaming service or direct download this year, with that number increasing to 134 million by 2019.

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