Apple Music Update
Since Apple Music launched on June 30, over 11 million iOS device users have opted into the free 90-day trial. That’s not bad, considering the amount of heavy lifting required to bring music-streaming into the mainstream. I mused last month about the impact Apple Music could have on jukebox, and considered the possibility of a “pro version” of Apple Music licensed for public performance in out-of-home locations.
In a recent USA Today article, Apple executive and legendary record producer Jimmy Iovine commented about the difficulty of building a subscriber base for Apple Music:
“For many people outside of the US (the service launched in 100 countries), you still have to explain what it is and how it works. Beyond that, there’s still the issue of winning over millennials, who never pay for music, by showing them you’re offering something that will improve their lives. And finally, there are people out there who I think understand its value, but we still have to go out and get them.”
In any case, Apple has to “go out and get them.” Apple is playing catch-up in a growing market segment in which the leader, Spotify, already has 75 million active users and 20 million paid subscribers. Achieving Apple’s stated goal of 100 million paid subscribers will require more of the aforementioned heavy lifting than Apple is used to doing. They will have to attract early adopters of streaming who already have an affinity for an existing service, as well as neophytes unclear on the concept. This is a different kind of missionary work than the company did when it pioneered the preeminent online commercial market place for digital music, iTunes, back in the MP3 era.
An Apple Music pro version would be an interesting way to go out and get subscribers. Such a service could act like a background-music service with an “interactive mode.” With the interactive mode enabled, patrons with an Apple Music subscription could hook into the venue’s pro account, where they could have access to approved playlists for that venue via their iOS device. Those users could then request tracks, paying with credits purchased through an iTunes account. These credits could be universal, valid in any Apple Music pro venue.
Each venue could also have a “backstage area” within the Apple Connect social media platform with access to artist exclusives, as well opportunities to interact with other Apple Music subscribers visiting that venue. This concept would offer a unique opportunity to localize a global service, creating exclusive temporary communities where subscribers interact with the music and with each other, within the Apple Music ecosystem.
The attraction for Apple would be taking established revenue streams from background music companies like DMX, PlayNetwork and Retail Radio, as well as taking existing revenue streams from jukebox music providers like TouchTunes and Rowe/ami. Apple could essentially begin to redirect those existing revenue streams onto their own balance sheet. Not a bad day’s work.
However they go about it, Apple is going to have to compete at a more granular level to woo those 100 million subscribers to Apple Music. Out-of-home offers some intriguing opportunities for that courtship. I’m only beginning to consider the possibilities for a smart outfit like Apple.