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Apple Music: How can Spotify, Tidal, Google Play and others compete with the new streaming service?

By James Bartram, development director

ais London


Opinion article

June 9, 2015 | 7 min read

So Apple Music lives.

Chief executive Tim Cook debuted Apple's biggest play in the music sector since the launch of iTunes in 2001 on Monday night. Developed in partnership with the Apple-owned Beats, the platform is the first streaming service from the tech giant, and aims to play the current market leader Spotify at its own game.

Launched with the obligatory pomp and fanfare at Apple’s Worldwide Developers Conference (WWDC) in San Francisco, Jimmy Lovine, co-founder of Beats, hailed Apple Music as a "revolutionary" service that will bring music fans around the world the product they deserve.

However, even with its considerable clout as a brand, does Apple Music offer enough to disrupt the music streaming market and knock Spotify off its perch?

Even as a challenger brand in the music streaming market, Apple is THE force to be reckoned with

The term ‘challenger’ is really a technicality here. The product is new to market whereas Spotify is an established number one, however if we broaden our scope a little and look at the digital music market as a whole, the dominance of iTunes is unquestioned. ITunes is the key driver of digital sales for artists and labels alike, dominating the scene to such an extent that really we have to look at the streaming of digital music as a competitor technology to the more widely adopted iTunes platform.

Obviously, streaming is rightly viewed as the technology of the future – however there is a clear reason Apple waited until now to launch its steaming service. To do so earlier would have cannibalised its digital sales – and even with Apple Music added to the ecosystem the brand will maintain and find new life in the iTunes platform.

The dominance of iTunes places Apple in an interesting position, a new entrant into a competitive market that has the potential to become number one overnight. The immediate reach of iTunes, extent of the brand's device adoption, and power of unquestioning brand fanaticism means it could be number one in a matter of hours.

So how should Spotify react to Apple Music?

Some at Spotify Towers will no doubt be quaking in their boots. But the good news is that to compete, Spotify only has to do what it has always done. Act like a challenger, and remember what has made it successful to this point.

Innovation, excellent user experience, ease of use, and championing the diversity of music on offer have been at the heart of Spotify’s success and these are areas where it must continue to excel. The challenger position can be a liberating one that forces you to focus on your customers, pushes innovation and justifies the embracing of change. Spotify’s acquisition of Echo Nest last year demonstrates a commitment to better understanding a users’ data and an ambition to make the service more useful to the customer. And being more useful to your customer may be where Apple Music slips up.

A lot of the criticism Apple Music will receive in the next few days will emanate from the fact that it is, sadly, a not very ‘Apple’ product. Apple has built itself on elegantly solving problems and doing things better. Listening to what customers wanted and designing products and services that deliver that, and so much more. But Apple Music isn’t so much an elegant new solution, as a composition of ideas cobbled together from what is in the market already. Nothing is better, nothing is really new. It feels the Apple philosophy has been lost in the glamour of Beats.

Ultimately however, there is space in the market for a number of streaming providers. Whilst the scale of Apple takes them mainstream, Spotify can concentrate on working with the industry to unearth gems and champion diversity. It can be nimble, innovative, interesting and quick – whilst Apple plays to its mainstream audience. Spotify should embrace the challenger position, the challenge of out-thinking the opposition, and root everything it does in the understanding of its audience.

So how can smaller challenger brands, such as Tidal, Rhapsody and Google Play music compete with Apple Music?

With all the discussion around the arrival of Apple Music and how it compares to Spotify, it is easy to forget that there are other offerings in the music streaming market such as Rhapsody, Google Play and Tidal. For these services points of differentiation are key.

Tidal, for example, have attempted to differentiate itself by pushing a 'fair pay for artists' message alongside offering higher quality audio. Unfortunately, this has failed to resonate with the potential users as these are artist problems and not necessarily those of the consumer. Perhaps those involved in Tidal’s development should have gauged interest in the service from a broader audience. Doing so, would have given them a better understanding of what its potential customers actually want from a streaming service and identified that higher artist remuneration and better quality audio (and the file sizes that brings with it) aren't necessarily top of their list .

Google has an in-built advantage – ownership of the platform the technology sits on. Moreover, Google has a device portfolio held more widely than Apple in a number of countries (which is why Apple Music will hit Android devices in September). Google’s technical competency will enable Play to offer a competitive music streaming service and potentially adopt a similar approach to the one it has taken with its Android OS against Apple iOS. Simple integration, cross device. A real Apple killer.

The streaming market is at an exciting time. Last year, its revenue surpassed CD sales for the first time in the US. As a result, there is space in the market for a number of streaming services. Just through the sheer scale Apple has, it is likely that its offering will become mainstream, which makes seeing what the other players in the market do even more exciting.

Apple Music isn’t the end for Spotify or the other streaming services. It is a challenge the brand must meet, should embrace, and that will ultimately lead it to bigger and better things, if it can maintain an ‘Apple-esque’ focus on making life better for its users.

James Bartram is development director at Ais London.

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