Spotify is almost synonymous with streaming music. It may not quite have managed the Google trick of becoming a verb, but it’s pretty much the default way to stream music.
Spotify has 75M active users and, despite doubts in many quarters about its ability to convert free users to paid subscribers, it has succeeded there too. The company announced this week that it now has more than 20M paid subscribers, half of them added in the past 12 months, at a rate of one every three seconds.
It seems hard to imagine that any new entrant into the market, even one with Apple’s clout, could steal its crown. And yet early market leaders often look unassailable – until they are left behind. Look at Nokia or BlackBerry. I wondered back in February whether Apple could decimate the competition, and now the company has thrown the wraps off Apple Music, I think it’s time to revisit the question …
Spotify does have a couple of advantages over companies like Nokia and BlackBerry, who seemed to sleepwalk into oblivion as new developments passed them by. First, on the surface at least, Apple isn’t offering anything radically different to Spotify.
Spotify offers “over 30 million” tracks; so does Apple. Label licensing terms mean that, Taylor Swift aside, they are likely exactly the same tracks. Spotify supports both desktop and mobile devices; so does Apple. Spotify supports downloading of albums for offline listening on a mobile device; so does Apple. Spotify charges $9.99/month; so does Apple.
Second, Spotify seems to be very well aware of the threat posed by Apple’s entry into the market. The company this month raised more than half a billion dollars in funding, to be spent on expanding both its offering and marketing reach.
So Apple isn’t ‘doing an iPhone’ here: it isn’t launching something everyone can immediately see is significantly superior to existing services. Nor is Spotify sitting idly by while Apple goes after its market. But there are still reasons to think that Apple could have a dramatic impact on Spotify’s future.
The obvious one is Apple’s reach. Apple has sold more than a billion iOS devices. Even allowing for those no longer in use, and multiple devices owned by the same customers, that’s a lot of customers. Most of whom will, thanks to extremely high adoption rates of new iOS versions, be automatically exposed to Apple Music.
So, the new icon will automatically appear in front of Apple customers, and a three-month free trial will mean that there’s no reason for them not to try it. A huge percentage are going to do so.
A separate but related reason is the Apple ecosystem. For anyone who already stores their downloaded music in iTunes, there’s a real appeal in the way Apple blurs the line between your own music and the music available to stream. Again, this isn’t an innovative new feature – Spotify also allows you to combine downloaded and streamed music – but for anyone embedded in the Apple ecosystem, doing it all through Apple’s own apps is simply going to be a slicker experience.
There’s also a simplicity to sticking to Apple products and services. I used to be technologically promiscuous, using a whole range of different devices and services across multiple suppliers. Apple fanboys, look away now: at one point, I had an Android phone, an iPad and a MacBook Pro which had identically-sized partitions for OS X and Windows. Oh, and my Apple calendar app read data from my Google calendar.
These days, I tend to the view that life’s too short. All my hardware is Apple (they even got me with the Watch, damnit!). The Windows partition on my Mac is no more. My calendar is an iCloud one. I do still use Dropbox, because iCloud Drive isn’t there yet, but I’m looking forward to the time when I can replace that too. It just makes life easier to stick to one platform.
Even if Spotify and Apple Music were functionally identical, that alone would be reason enough for me to make the switch.
But despite the superficial similarities, they are not functionally identical. Take curated playlists, for example. Spotify has these too, but I’ve tried the Spotify ones and I’ve tried the Beats Music ones and there’s simply no comparison between the two.
Apple (and Beats before it) has really gone to town on involving music industry heavyweights in ensuring that its human-curated playlists work, and that work shows.
There’s also a lot of clever thought and work gone into the Apple/Beats system. When I first tried Beats Music, I was impressed by the simple, two-step process to feed in my initial tastes. I either tapped or double-tapped a bunch of genres to identify my favorites, then did the same with a number of artists. Just with that little info, Beats was already making solid suggestions – including artists I hadn’t encountered before.
Apple isn’t stopping there, either. Zac Hall recently outlined six ways in which Apple Music goes beyond the Beats offering it replaces – like Siri integration. And the company seems to be going all-in to ensure that Beats 1 radio is everything iTunes Radio wasn’t. So much so that Chance Miller thinks it’s the killer feature.
The combined Apple and Beats depth of expertise in the music field is going to make a huge difference as people start comparing services.
Then there’s Apple’s reported ambition, of 100M subscribers. That, if true, is huge. We don’t know whether it is, of course, but it does strike me as credible. Despite the fact that Apple makes most of its money from hardware – and the company’s only dedicated music player, the iPod, found itself demoted this week – a great deal of Apple’s identity is caught up in music. The very fact that Apple is choosing to extend the service to Android users is a huge statement about just how big the company wants Apple Music to be.
The iPod played a key role in Apple’s success story, and I think the company has never forgotten that. Apple was very late to the streaming music party, and it’s not credible to imagine that’s because it didn’t see which way the wind was blowing. It waited for the reason Apple always waits: because it wanted to do it properly.
Is all this enough to kill Spotify? I have a less clear-cut answer than last time. Then I said that I think there’s room in the market for a range of streaming music services, and that much of my view hasn’t changed.
It’s worth remembering too that two of the reasons I think Apple Music will be so successful apply only to Apple customers. Android and Windows users won’t have the free trial appear magically in front of them on their screens, and there’s no appeal to them in the Apple ecosystem.
But there’s no doubt that Apple has chosen the best streaming music service out there, and that it intends it to prove wildly successful. There’s also no doubt that Apple has the clout to pull off that aim.
I don’t see Spotify disappearing anytime soon. But I do think it’s going to struggle to maintain growth, and I also feel significantly less confident than I did back in February that Spotify’s long-term future is assured. One thing’s for sure: the moment Apple Music launches, Spotify will wave goodbye to my subscription.
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No, since Apple Music costs 2 times more than Spotify in my country.
NO!
uhm, yes :P
I have hundreds of playlists in Spotify with thousands of tracks, categorized to my taste. It took countless hours over the years to build them up. Without a migration path onto Apple Music, it would be something really hard to leave behind.
Export, import. You’ll see a path before long.
There is already a site that will do it for you.
Love the way you didn’t provide a link.
There is a nifty site that will help you find apps and other options for importing / exporting playlists. It is called Google. (or bing, yahoo….)
I’m sure they have a plan for how to get your $9 every month. I wouldn’t worry about any of it.
Oh yes, this is it.
I think 2 factors will hurt Spotify in the long run:
1) Family pricing: Apple is offering a cheaper plan if you get beyond 2 family members, which only encourages people to get others to join their “family”.
2) AppleTV service: Once Apple has their “cable TV” offering out in the marketplace, they can offer the basic TV for $40 and combo TV/music for $45. At that point, Apple can create pricing / feature packages that Spotify can’t match.
Family pricing only works for people with family sharing set up. And I believe that requires those iTunes accounts to be linked by credit card or something? Friends cant call each other “family” to get the discount.
I don’t think you need “family sharing” I watched the WWDC and they said you can add up to 6 people for $15.00 a month. They keep their music and you keep yours. I don’t remember them saying they had to be within the “family share”…..?
In response to htisch76: The keynote clearly stated that the $14.99 plan is a Family Plan, not Friends and Family. As the saying goes, You can pick your friends, but you can’t pick your family. Even if Apple wanted to offer a more open sharing environment; I seriously doubt that the record labels would sign off on it. Keep in mind that Apple was pushing to offer the service on individual plans at $7.99 /month; but the music industry balked. Apple had to charge the predominant fee already charged by other services., before the record labels would agree to signing onto the Apple Music service
Just to clarify an earlier statement.
Under Family Share, you don’t have to all be tied to one credit card. I set up Family Share with my mother being the owner and we both have separate accounts and cards (the same ones we had before the feature was introduced).
It was just a way of adding benefit features in the beginning like sharing iTunes libraries, then more and more features were added to make it more practical for any family.
You could technically add a friend to your family share, but I think it would be more of a hassle than it’s worth.
It seems to me Spotify’s biggest problem is its business model. Let’s not forget that Spotify has been in business since 2009 and has failed to earn a single penny in profit. I read somewhere that the faster it grows the more it loses. I don’t know if that is true, and I doubt it is, but the fact remains, Spotify doesn’t make any money.
Unless it can change that, it will not exist, as an independent company at least, in 5 years.
Yes, it’s true. Apple isn’t stupid. They’re very good at letting other people hack their way through the jungle at tremendous expense.
No matter what, you have Spotify founders that are right now trying to figure out how they walk away with as much money as possible before their subscriber base goes flat and they’re unable to raise any more money. Sure, they could IPO, but who really wants to own a piece of Spotify?
Actually it is true that over recent periods Spotify has seen increases in losses despite increase in subscriptions and gross. Here’s a fairly recent article to read.. http://www.theguardian.com/technology/2015/may/11/spotify-financial-results-streaming-music-profitable
Maybe spotify can score with its up to 320 kBit streams compared to apple music’s poor max 256 kBit …
Can’t really compare 256 kbit AAC to 320 kbit MP3. They are very similar in terms of sound quality.
You just compared them.
A valid point. Yet for some reason there always seem to be the N.E.R.D. type of people who simply must have 320, if only because 320>256.
Couldn’t find any confirmation for AAC yet, so I was comparing both values as MP3 codecs, which would definitely make a difference. But it’s probably gonna be AAC…
It depends on some other factors, like the original source of the uncompressed version. You can get 256kbps to sound REALLY good if you use the proper mastering techniques using the Mastered for iTunes and 24/96+ original uncompressed files before compressing them. That’s what some new files are. Also, you can get decent 320kbps MP3 if they start from good files to begin with. Unfortunately, when they create all of these different versions of a recording, there are so many potential variables, it’s sometimes hard to just say 320kbsp MP3 = 256kbps AAC, or any other comment. Many times these various versions of files were done at different times, different studios, using different equipment or different orignal mastered versions, etc. It’s unfortunate that there is such a discrepancy, so it’s all about what specific files are being compared on what equipment. Some equipment you can hear the differences easier and some you can’t. and then there is the listening abilities of the listener, some just have well trained listening and most don’t.
For MOST people using the low end earbuds, low end home stereos probably can’t tell much of a difference between the two, even a lot of people may have problems telling the difference between Lossy and Lossess if the kbps are 256 or better. But the reason why some want Lossless is because they are using higher quality audio equipment and they can hear the differences. But that’s just a small niche market.
Only people who don’t pay for music care about this. The people actually paying for streaming don’t care if the music is 128kbit.
What?
Yes, since I pay for my audio content, I want it to suck in quality as much as possible ….???
Aside from that completely illogical conclusion, 256 kbps AAC is very difficult to distinguish from 320 kbps mp3. With the quality (or lack thereof) of earbuds / headphones that most users can afford, you wouldn’t be able to detect any higher bitrate anyway. Stream 256,000 kbps through most headsets and you still won’t know the difference. Unless you’re listening through reference series amplified headsets or a high-end audio system, there is a point at which higher bit rates are simply meaningless. For those with the high-end equipment, many will collect reference level recordings in FLAC format.
You need to know your target market. Apple has shown that they know theirs.
It’s 256kbps AAC which is about the same quality as 320kbps MP3 if not better. However, the files will download faster or stream more reliably while consuming less out of people’s data plans. They’re also slightly more battery efficient.
TL;DR: MP4 > MP3
Or, said another way, Mpeg 4 audio (AAC) > Mpeg 1 audio (which MP3 is part of).
honestly? 320 flies are better than 256 butterflies?
Two things. First, you need to read up on audio codecs. Second, much has to do with what the software and hardware can do with the audio. Then you have to take into account Apple’s ability to assign hardware resources to music that Spotify doesn’t have access to.
This isn’t unlike Apple’s ability to under spec components, yet achieve equal or better real-world performance compared to higher spec machines due to hardware and software integration that can’t be achieved with other loaner platforms like Android or Windows.
RE: “Then you have to take into account Apple’s ability to assign hardware resources to music that Spotify doesn’t have access to.”
There is an obvious flaw with this argument. Apple Music will be a multi-platform application / Music Service. While they may have direct access to hardware features and restricted software API’s on Apple branded devices; Apple certainly doesn’t have any privileged access to tweak their App / Service on Android / Windows based platforms. As stated elsewhere in this thread; the audio quality comparison needs to take into consideration AAC vs MP3 combined with the sonic limitations of the headsets / speakers that the vast majority of the target market will be using.
WOW. Wear your ignorance on your sleeve much?? Never mind that there is not a SINGLE human ear on the planet, even trained “golden” ones, that can even distinguish between 192 and 256 AAC! So maybe do yourself a favor and stop making a complete, pretentious dóuche of yourself.
Apple music will make a huge difference and have a lot of subscribers, that is nearly a fact.
Spotify will be still had their customers but unlike before!
‘that is nearly a fact’
Not the best way to make your point, but yes. Apple music looks very impressive and the pricing is very reasonable.
Someone needs to investigate how many paid subscribers each of these streaming sites need to break even. Spotify is still losing money. The last time I checked, they lost more money as they had more people sign up for the premium subscription, so I think they aren’t charging enough. When a company signs more people, they should be either losing less money or reaching their break even point and then being to make a profit. In Spotify’s case, the more subscribers they sign, the more money they lose. That indicates they aren’t charging enough money per subscriber.
You, Rich Davis, have just indicated the reason that Apple will be able to win out in the long run. Spotify is going to lose customers and will not be able to sustain itself. Apple can afford to lose a little (or even a lot) of money on music if it enhances their overall ecosystem and continues to make Apple products a best seller. But, Spotify’s SAAS model won’t be able to sustain itself long-term against Apple Music.
Apple won’t lose money on this. Their operational costs are diffused to near zero, and don’t forget that iTunes is a very profitable portion of Apple’s business already. The acquisition of beats added an entirely new category to their business, so Beats Music was basically a freebie. iTunes music alone makes a good deal of money for Apple. As well, don’t forget that Apple Music has it’s own devices (iPods), aside from every iPhone, iPad and computer. Adding subscriptions will only serve to make more money, simple as that. And they don’t have freemium to deal with. And their free options are literally just a nominal marketing expense.
Spotify has to rely entirely on their subscriptions and ads to fund their entire business, which is why they continue to run a massive bonfire of money burn. The $526 Million that Spotify just raised to stay on life support is quite simply a rounding error for Apple on any given day.
Either Google or Facebook will try to acquire Spotify in the next 12 – 18 months. Mark it.
It appears a lot of Spotify’s “paid” subscribers are people who took advantage of .99 cent three month deals. How many of those will convert to real paid subscribers when it jumps to 9.99 a month is a big question mark. Spotify is also doing all sorts of strange promotions giving premium subscriptions (for free) to Starbucks employees, etc. There’s a lot of games going on with their subscriber numbers.
Nope
Wow, this article reads like the author doesn’t even know Google Play Music exists…
Every single thing touted as an Apple Music plus-point is (and has been for a while) available in GPM – own music library “blurred” integration, curated lists, [Google Voice Search] integration, massive catalogue (including the artists who’ve pulled away from Spotify), the ability to upload music you own which isn’t on the service so you can listen to it when streaming away from your base, cross device functionality, etc. etc. And, GPM is higher quality than Apple Music – 320kbps vs 256kbps.
If you argue with Google services, than you should be able to start a Google search and get information what 320 kbps MP3 vs. 256 kbps AAC really means!
I don’t need to. I know that, at equal bitrates AAC is higher resolution with added noise on the top-end, whereas at 256 vs 320, AAC is the same resolution with higher noise on the top-end.
But, for you: http://www.stereophile.com/content/mp3-vs-aac-vs-flac-vs-cd-page-2
Nice Googling John. Lol
@john
So can you tell the difference between the two and not based on just words but through the ears.
@Isitjustme Yes I can, but then I work in audio / recording. (If you could zoom in on my avatar you’d see the mug I’m enjoying a nice cup of tea in is from Abbey Road studios…) I’m pretty sure most can’t, but that doesn’t actually negate my point.
The author and the global population alike don’t care about Google Play Music. THAT’s the point. It might as well be a non-entity and its existence in this world has had an expiration date from the start.
Google Play Music is buried pretty deeply in the ‘Other’ category where streaming music revenue is concerned
I have a family. My wife and I have Spotify Premium accounts @ $15 a month. Spotify still won’t offer censored versions of their songs so we have to watch what we play.
But now with Apple music, that same $15 will get up to six people and they have censored versions of songs.
I’ll definitely be giving the free three month trial a go.
As a DJ and a parent, I don’t understand why Spotify makes it so difficult to find censored music. It’s very frustrating and I have messed up more than once at a youth event myself.
Heck no, people have spent years building playlists of thousands of songs in Spotify, who wants to start back over from zero. Spotify has a free option for desktop and iPad….Apple? No…Apple Music will be good for those who want it but will not hurt any existing platforms. People said Pandora would die when Radio option came out from Apple…..still waiting for that too?
Umm Apple Music is available on any iOS device that can run iOS 8.4 and above, it’s also going to be an app for Android devices, you can also use it on desktops via iTunes. So Apple music is just as available as Spotify.
Hasn’t Pandora died already? I don’t know anybody who uses it. I know I don’t because it’s horrible at playing songs I want to hear.
You dont know anyone who uses Pandora? Better crawl out from under that rock then because its the most popular radio style streamer out.
And no crap you can use Apple Music on a desktop and 8.4 but it COSTS YOU MONEY TO DO IT…….Spotify is FREEEEEE on desktop. Reading comprehension.
@chrisl84, how can Pandora be “the most popular radio style streamer” when it’s only available in United States, Australia and New Zealand? Speaking of crawling out from under rocks, you know there are more countries than that on this planet, don’t you?
yo yo little monster in the comment section to woo woo!
The Spotify desktop app allowed me to import playlists from iTunes (though what sucks is that it would not import everything, like some bootlegs and such). So, the ability to import playlists is already in existence. if Apple Music includes this ability, it kills the argument or concern of “I already have all my playlists I’ve made saved for years”.
Yes. Spotify’s business is streaming music, Apple’s isn’t. Apple makes more money in 3 months than Spotify will make during its entire lifetime. Apple can afford to throw as much money as needed to correct any problems Apple Music may have. I feel bad for Spotify, but I feel their demise (and other streaming services) is inevitable. Look what happened to point-and-shoot cameras when Apple decided to make the camera feature of their devices better.
It’s worth bearing in mind that the vast majority of smartphones around the world don’t run iOS – they run Android. By default then if what you say is true about point and shoot camera sales being down it isn’t thanks to Apple, but to smartphones in general.
Blah blah blah…
Most of that “vast majority” are in China, India, and Africa. Android is available on cheap devices which are very popular in the 3rd world, and with very old people. Those people don’t have streaming music contracts anyway.
I’m tired of this line of reasoning. It’s complete crap.
In three years time we’ll look back at 2015 and remember when Apple Music was announced. I see it being very big and being the go-to music service for families who own iPhones. It remains to be seen how big it will be on Android, but when it comes to music Apple has a mega reputation so I wouldn’t be at all surprised if they take a nice chunk of the market there to. I wonder how many Android owners there are out there who own Beats headphones? It’ll be interesting to see what Beats headphones and speakers are link in 5 years time. Will Jony take on the task of resigning them to make the standard pair they make a little smaller and slimmer and aluminium and with better audio? It should be interesting.
I don’t think passive entertainment options have a chance to become verbs the way Google did. Nobody actively “TVs” or “Radios” or “Kleenexed” their nose. Spotify’s success shouldn’t be loosely measured in this way. No other passive entertainment method has been.
yeah , spotify just can’t persuade me to subscribe , it can’t effectively suggest the kind of music that i like, I’m still in that situation where i have to find my own music , and thats y I’m using soundcloud now , they both did the same , just more unpopular track that i like :) tho I’m sure i will try on apple music when it launches, as u said , its free , y not?
I do not see Apple Music as the big threat to spotify, far from it. If anything, the contracts with the music industry will sink them before Apple Music could do anything to them. As much as most folks (including) spotify tries to deny it, streaming music stinks. There is no money to be made here. No one is happy or making money in streaming (except the labels). It’s not a surprise by most in the industry, because the labels have all the leverage since they have all the rights. So the artists, the writers and the service providers are at the merci of the labels.
Music streaming is the future, meaning this is a marathon and not a sprint. You have to be in this for the long haul, but the current structure ensure spotify music streaming will never be profitable with the current structure/contracts. All the platforms holders (Apple, Google and Microsoft) will be fine, since they do not need to make money on music. Spotify on the other hand can’t afford that, streaming is their business. Spotify has been around for almost a decade and are the leader in paying music subscriptions and have yet to make a dime.
You can’t run a business in the red forever, VC money will eventually run dry, then what. What works so well in tech is the ability to scale, which does not work in this case, because the more people spotify sign up the more money they are losing, music streaming can’t scale. Unless the labels develop a conscience (will never happen) and decides to cut them a slack and offer to take a big cut then spotify business model is not sustainable. That’s the threat to spotify, not Apple Music, the only threat Apple Music present is the limitation of the paying pool it will caused. There is a small and limited pool of people who will pay the current price for streaming and Apple Music will attract a big portion of them, which in turn will hurt spotify growth story. When that happens, then the pressures will mount (like it did for Dick Costolo @twitter).
This. ^
Apple’s going to join the 3 commas club by putting radio on the internet?
lol
Trés Có-Más!
Don’t forget the real motivation here… to make the world a better place.
There’s really no way to tell just yet how much of an impact Apple Music will have. I love the idea of it because like the article stated, having everything working in harmony is what I like on my devices which is why I have an iPhone, iPad, MacBook Pro Retina, Apple Watch and even CarPlay. All work seemlessly together. I love Spotify but the idea of Apple Music is great for me and my family members. For $15 a month 6 of us can have Apple Music and I won’t be losing any features that Spotify has, and having the integration built in to my devices is great. So as of now I’m holding on to Spotify until I’ve tried Apple Music out for the 3 month trial and then I’ll decide but it looks likely that I’ll make the switch if it works as I need it to.
Apple Music will be on every updated iPhone with iOS 9. Sort of like Apple Maps being the most used maps app on iPhones since sometime in 2013. Most tech pundits still describe Apple Maps as inferior (they aren’t), yet Apple Maps still gets used more than Google Maps on iPhones.
The other thing I’m curious to see in focus is disk space. The base size of a 3rd party music streaming app aside, I wonder how much disk space difference there will be for identical offline playlists. AAC 256 takes up less space than Spotify’s Premium 320 bit rate. Further, for actual streaming, data usage should be far lower for Apple Music vs Spotify Premium.
http://thecynicalmusician.com/2015/03/free-is-the-least-of-spotifys-problems/
I’m not sure about what will happen. What I do see though, Spotify is amazing, and that’s what you hear from most of your friends. They are modern, try to keep coming up with new features. Also, having your friends on Spotify is something nice to have. And I do like the playlists from Spotify, there are a lot of them curated by humans and changing every week to keep you busy listening to them.
The new Spotify running feature is a really good addition that Apple Music is missing so far.
I’ll definitely give Apple Music a try and would love it for be as good as Spotify, because I believe like others said, the integration with all devices and Siri is super efficient.
I wonder whether they will include audiobooks (like in spotify) or not.
https://spreadsheets.google.com/spreadsheet/lv?key=0Aqe2P9sYhZ2ndE9iZHhWc0pMcDlCdmxNdmFRQXRPY3c&hl=en_GB
I’ll be switching too. Even though I get the Spotify student discount to get it for $5/month, the family discount is the same price for my family. Plus, I love the Siri integration and Apple Watch support, since Spotify refuses to release an Apple Watch app.
No way, for those that don’t want to pay for a subscription at all, Spotify is the best option for that since Apple’s only lasts for 3 months…not cool Apple.
i only got a 7 day trail.. 7 days vs three months think about it
Spotify will be dead in about 12 months.
If apple makes it super easy to transfer spotify playlists, radio etc over to its service , yes! but otherwise i speak of my personal experience.
I been using spotify for 5 years. Have playlists, finely tuned radio stations altho are just fantastic all set.
I am not going to drop all that to try apple music and start again.
I don’t think it will. The music industry just like every other industry need at least 3 players competiting.
Apple, spotify and other music services can eat and live well. And spotify is not going anywhere anytime soon.
You don’t drop 20 million paying customers in seconds
I don’t think Spotify has anything to worry about.
no. it’s too revolutionary for me.
Spotify has been having a hard time trying to achieve profitability with a business model where there just may be no profitability.
By launching Apple Music on Android, Apple is clearly indicating that they intend to do what it takes to take over this market. They’ve got unlimited resources to do this indefinitely.
This is going to cut off their growth and they’re going to bleed subscribers.
Companies usually don’t survive going through downsizing at this stage in their life.
The money and profit in streaming is where it is in every other media based business model form….and dare I say it…..ADVERTISING. Radio profits from commericials….TV the same….Websites the same. You can all bet you backsides Apple Music will have ads in two years time in one form or another. Beats One is already their doorway into cramming ads down everyone throat.
The money and profit for Apple is in selling iPhones, iPad, Watches, Macs and occasionally some iPods.
I think Aplle needs to have web app like Spotify or a complete overhaul of iTunes or even kill off the iTunes desktop app.
People keep mentioning Spotify not making a profit, Amazon and Netflix have both did good for relatively low or no profits. In the U.S. apple can kill off Spotify, worldwide it will be a much tougher task. One thing that will help Apple in Europe is when the EU mandates one rate for music and video between spears EU countries.
It’s very rare for companies like Spotify to make profit in their first 8/10 years. They will become profitable once their user base stabilises.
I call BS on Spotify’s claim of doubling it’s paid subscribers over the last 12 months. Not the number itself, but Spotify’s ability to make any money and hold onto them. My evidence against them is weak because it’s only me, but I’m one of those new subscribers. The ONLY reason I become one is because they offered me a 3-month period for only $1.00US.
I have no intention of staying with them when that trial is over. I’m only one person, but out of that claimed 35M subscriber increase, I can’t be the only one who will be leaving within the next few months.
Let’s check back in September or October when Apple Music has been out for awhile and those cheap Spotify trials are over. I could be wrong, but I’ll bet the picture will not be as rosy for Spotify then.
Solution to demise Spotify – ban their app from App Store lol and create streaming music monopoly. Jokes aside, though, I do not think Apple Music – Spotify competition compares to iPhone – Blackberry. iPhone offered whole new value proposition with radically new interface and eventually extremely robust ecosystem. Apple Music and Spotify are mere services. Since they are offered on same platform there does need to be one or the other. They will both live their lives. But I do agree that Apple Music can become bigger because it will attract consumers who just do not download apps. In the long run, competition will be win for consumers as both services will be improving to stay relevant.
I’m sticking with Spotify because I’m guaranteed that Taylor Swift will never, EVER show up in a “you might like” playlist.
She won’t show up on Apple Music either. They withdrew her collection from all streaming services.
Hmm… now you’re making me rethink my position! :)
pardon my ignorance, but why was taylor swift music pulled from online streams?
In answer to chuckisbusy: Taylor Swift personally (or more accurately, via her agent and attorneys) had her music pulled from all streaming services. She apparently believes that permitting her music to be played without actually buying the individual song / Album “devalued” the financial value of her music portfolio. IMHO, a great body with no brains! She is reducing market exposure of her music and potentially encouraging casual listeners of her music to turn to torrents. For me, I might listen to some of her music on a streaming service (for which she would participate in the revenue “stream”; but I don’t care about her music enough to actually go out and purchase the songs. (No, I wouldn’t use bit torrent either. I avoid downloading anything from unknown sources. I prefer to keep my computers virus-free)
Will Apple offer student pricing? I currently pay $4.99 for Spotify.
More unlikely than Microsoft making Windows for Mac
Nothing mentioned about that in the keynote; but with family plans available, this impacts a very small percentage of the overall market. Plus, I assume that you do plan on eventually graduating.
One thing you can do to save additional $ with Apple Music is to keep an eye out for discount iTunes gift cards. I purchase several of them every time I see a sale at 20% – 25% off. I use them to top-off my iTunes account balance as needed so that everything I purchase (including subscription services) are paid for at the discounted price. So, I can purchase an individual subscription and only pay a net price of $8.06 (After sales tax) per month. ($12.98 for a family plan).
NO for a number of reasons:
1. Spotify has one of the best UI of any streaming music app. Quite frankly, Apple music UI is well kinda ugly.
2. Spotify has said they will match apple music family pricing.
3. Spotify has great playlists and people have spent years building their own.
4. Spotify offers student pricing
5. Spotify offers higher quality streaming
apple music is nice but not different enough to make a switch. Most people do not care about an internet radio station. Its called satellite radio or i-heart radio lol.
1. no, the opposite is true
2. but they don’t
3. more people don’t did that
4. screw students
5. wrong
Lmao you can’t just blindly dismiss every single point he made and still remain objective.
He brings up good points… Their playlists are very great, saves me the trouble of looking for new music… student pricing is also great $5 is as cheap as it can get…
Competition is a good thing Jorg, it forces Apple and Spotify to get better.
i agree with
1. i think the UI for apple music is very pretty
i never like spottiness UI since the beginning
Spotify can fix this by merging with Netflix. The combined appeal of the best music streaming service with the best movie/tv streaming service will save both companies because if you seriously don’t think Apple are working on their own version of Netflix for the new Apple TV then you’ve got your eyes shut.
I have too much time invested in Spotify to just walk away but if Apple Music gives me an unlimited version of iTunes Match, which it appears it will, then I’ll happily subscribe to both platforms.
I might actually use Spotify if it was included in my Netflix subscription. Even if the price ended up being $12-13. I would however want to have the option of my current tier at a lower price.
I will stick with Spotify because Apple’s entry into the field introduces the potential for a monopoly. The consumer is not served when there is no competition.
I cancelled my Spotify Premium subscription on Monday; shortly after the keynote ended. I’ve always found it to be a pain in the rear to manage multiple libraries between iTunes and various subscription based services. (I have a collection of over 1000 pre-mp3 era CD’s burnt to my iTunes Library). Since I am in an Apple-Centric environment; there is a major advantage that the Apple Music service will have over any other option – Siri from the lock screen.
I have a set of Sure SE-530 earbuds (with remote cable) that are practically implanted in my ear canals. I put them in when I get dressed in the morning & they don’t come out until I go to bed. (Occasionally, I’ll even go to sleep with them; using binaural audio apps to relax & sleep). While I wish Apple would allow me to designate which apps I can have limited Siri access with the phone locked; the reality is that if I want to listen to anything other than Apple driven content, I have to physically unlock my phone. Since I don’t plan on purchasing a new car, just to get CarPlay; the only LEGAL way for me to select and play audio content while driving is to use Siri via my earbud remote button. (While there are some states / localities that still permit the use of handheld devices while driving, that is a disappearing trend. Plus it is plain stupid to try fumbling with a smartphone while driving.)
Having all of my music integrated into a single app with Siri integration simply makes sense. Now, I’m just waiting to see when Spotify, Pandora, et al file anti-competition lawsuits against Apple for not providing equal access to Siri based control.
Spotify’s new subscribers’ numbers will flatline. Apple Music subscriptions (instantly available on hundreds of millions of devices) will skyrocket. Spotify will limp along for a year or two, then disappear.
And the 256kbps AAC vs. 320kbps MP3 thing is a non-issue. AAC beats MP3. Spotify even says ‘up to 320kbps’ in the app, so it’s just a numbers game, that only people who think numbers count more than the technology behind them does.
A small number of people who fall for the numbers, are just used to Spotify, or just hate Apple will keep Spotify alive for a while, but they just lost their new subscriber base.
Get real
Spotify is a money burning black hole that just took on another $526 Million to keep from going under in the face of this massive threat from Apple. Sorry, but they’ve burned through far too much money, have far too little revenue, and have an impossibly high $8.5 Billion dollar valuation (based on capital raised) that nobody in their right mind would acquire. All of the labels want their freemium model to disappear. The writing is on the wall.
Assuming Apple Music is going to be very similar to Spotify, I have no problem switching over, simply because I know that both device and service integration will be better in the long run. I also know that Apple is extremely stable as a music business. As well, the fewer apps I have to deal with, the better. If Apple can consolidate both owned, and streaming music into one cohesive package that actually works, I don’t see any upside to keeping Spotify when the price between the two is similar.
The same reasons you cite for why a user could/would switch to Apple Music, are also the same reasons they wouldn’t. You’re an informed user making informed choices, so in your mind…if the price is the same, you might as well give Apple a try.
Other uninformed users who are not even aware of Apple Music, nor seeking a better solution, may come across it, see the price tag is the same, and find no particular reason to switch.
New Users: Spotify has no chance. Apple Music will gobble that up.
Existing Users: Spotify could conceivably keep most of these for a long time, as from both a marketing and financial standpoint, there is no obvious reason for any user to swtich.
The best summary of this was Rdio’s parody of Apple’s letter welcoming IBM to the PC industry back in ’81. For Apple it was the cocky arrogance that they could beat IBM at the PC game. Well, they couldn’t, not even with vastly superior offerings like the Mac. Guess what, there is precious little that Spotify is likely to ever do superior to Apple. Meanwhile, Apple’s visibility means it will gobble up market share and Spotify will be lucky to hold on to their existing 20mm subscribers.
Yeah… I tried Spotify and didnt like it so I switched to Beats quite awhile ago. Spotify’s search function is not good IMO. I much prefer Beats searching.
I very much like Spotify. The reason I will absolutely switch is that music is integrated into iOS and OS X. It’s what I miss when I’m driving for eg – being able to say Hey Siri, play [whatever random song I’ve just remembered], or when I want new music I can just search and play pretty much from the OS itself.
The one thing Spotify does which I hope Music follows through with is shared public playlists tat you can subscribe to or favourite.
Investors were willing to put with multi-million dollar losses because it had little serious competition. With Apple entering the realm, Spotify’s days are numbered. Investors aren’t going to continue pouring money into a company that directly competes with the world’s largest music seller. I like Spotify, and I absolutely hate the iTunes app. But the writing is so clearly written in big dark letters on the wall.
Easy pick. I go with Apple Music for its huge library and, of course, support for my country.
I’ve been using Spotify for the last three years, and have been asking support for my country, Indonesia. But Spotify doesn’t have an estimate time when they will be launching their service.. until now.
Lets not forget about Spotify’s deal with Starbucks. I really don’t think Spotify will be going anywhere anytime soon.
Spotify is so well known and well established now it’s as synonymous with streamed music as Netflix is with streamed video and Google is with search.
That will take them a very long way, and besides, Apple’s service offers little that Spotify doesn’t, so why would anyone switch? Even the price is the same.
I like the integration it has with Siri to play music. I’ll definitely give it a try. Moreover, with 4 people in my family using 4 Spotifiy accounts all on my credit card and all with iPhones, Apple’s offer looks way more appealing.
it comes out way cheaper because you’re like paying 25 dollars a month and with apple music you could save 11 dollars a month paying 14.99 for 6 family members thats a deal breaker
Spotify Premium and Spotify Family is very cheap in my country, I hope Apple Music does compete with the pricing.
Absolutely not! There is plenty room for all. Nobody will grab the whole pie for himself (themselves), never, ever! Anti-Trust Law.
If Apple Music is available in Canada, I’ll do the three months for free, definitely.
But honestly, money’s a bit tight so the service would have to be mind-bogglingly stellar for me to consider signing on. I’m glad not everyone is in my shoes, but I’m quite happy with my personal library and iTunes Radio for now.
i enjoy reading the comments :)
The two things that will decide it for me are:
1. Does it have all the songs I want (looks like it will), thats what killed google play for me
2. How fast does it stream – iTunes match streaming speed is pathetic compared to Spotify (at least where i live)
Things like beats radio 1 and Connect are exciting but just added bonuses
I’ve tried all the services out there extensively. Nothing compares to Spotify’s sound quality. Problem is it’s so high maintenance. Rio is it for me, the only thing I’m curious about is having the ability to play virtually anything out there via Siri. Thats the killer feature I’m keeping my eye on.
As soon is available I will switch since I am already a subscriber of Beats and assume the change will be automatic. I left Pandora many months ago and try Spotify without anything new then.
In my experience as an active club DJ I have to say that most of the people who really consume music seem to be lazy and tied to their habits. Using Spotify for free is a habit that is hard to shake off. Spotify offers an effortless way to create playlists and it’s not tied to one platform. Roughly 70% of the consumers seem not able nor willing to buy Apple products because of the premium pricing. Android will be the major OS on mobile phones for years to come, so Apple’s services will not be used in the scale needed to overcome Spotify’s market share. Then there’s good ol’ YouTube. Even with lower sound quality, it seems to be a viable option for the masses. “Hey DJ, Can you play it from YouTube?” – This is one of the questions heard night after night in a nightclub. Artists and music enthusiasts over-estimate peoples interest in the artists backgrounds. In my opinion, the majority of consumers really want free music and they consume it like they consume burgers. It’s tasty fast food, but most of the people are not interested how it’s manufactured or by whom.
How do you deal with youtube playing commercials before songs when you are DJing?
Something which has been touched on very little in these comments is Spotify integration into other devices. I might well look at Apple Music one day, but it would have to be supported on all the other devices I’m currently using (Sonos – the big one, Amazon streaming stick, roku 3, Libratone Zipp – which allows me to hand off play to the speaker rather than direct airplay from my iPhone).
On the contrary, Apple music will kill Apple. Why?
Because Apple has started launching sub-par, non-problem-solving products(watch, music), over reaching, over extending itself, without fixing all of the major issues it’s current products have (iCloud failures, wi-fi issues, we all know them).
This lack of discipline at the company level and the childish belief that everything they do is good will eventually start bleeding money, fail to hold market share and the company will have no choice but to cut everything and get back to its three basic products: iPad + Mac + iPhone.
However, cutting everything and focusing on the basics is, as history showed us already, painful and hard to do unless you are about to go bankrupt and have a Steve Jobs. So as a developer, since #wwdc15, I have started learning new platforms. I believe this is a reasonable decision :)
So you profess “Apple will kill Apple”?! Your mere hatred of Apple won’t make it happen, so stop dreaming but you do get the idiot of the day award. Seeing as you cannot be even a tad objective on the subject your comments are assigned to the “stupid ranting rubbish” pile. I truly hope you enjoy your subpar existence, you clearly deserve it.
I don’t hate Apple. My house is littered with Apple devices. I don’t know about the earlier poster, but I don’t think one has to be a “hater” to question some aspect of their business. I would note that 1) the path to continued success is like a razor’s edge and has little tolerance for mistakes, 2) there is a little bit of hubris with respect to AAPL. They’ve got some awesome products and a great, loyal base of customers. I respect them for having the confidence to stay the course when others said they needed to scrape for market share but they aren’t perfect whether it is mobileme, Apple Maps, etc. Most recently, if one is honest, Apple made a critical error in not introducing larger screen sizes. Ultimately, Apple was able to recover, and, as they say, it seems to have worked out well enough in the end. That is the danger in Apple’s go it alone versus the rest of the world (genius too)- I wish them great success (I am happy with my watch).
There is no assurance that it will work out so well next time…
I enjoy reading your pieces Ben. Good work.
Thanks, Danny, I appreciate it.
I use Beats and by far is a superior product. Spotify curators seem amateurs of machine generated list with lots of repetitions.
Good analysis.
It seems you are all forgetting about free use. I don’t mind advertising while using Spotify. I will not stop using a free ad-based service for the same service at a price.
I will give it a try, spotify premium in my country (Brazil) is 14,90 reais and apple music is offering the same thing for 4,99 dollars plus the first three months for free, currently one dollars buys three reais so 4,99 dollars is essentially 14,97 reais and I’m pretty sure the currency in Brazil will appreciate against the dollar so in the end is going to be cheaper than spotify and if I’m wrong well at least I have three months to cancel.