Merchant Innovation

Apple to Launch Spotify Rival Streaming Music Service

First, Apple Insider reported rumors in April, and now The Wall Street Journal seems to be in the know as well: Apple is expected to launch a music streaming service to rival Swedish giant Spotify at its developers conference on June 8.

The first clues that Apple was looking into streaming music came in September 2014, when it bought Beats Music for $3.2 billion to later disassemble and re-integrate into its iTunes network. Apple, by then, had also purchased Semetric, the analytics engine behind Musicmetric, also used by Spotify to geo-target songs for listeners and send feed data back to musicians.

Currently, Apple sells around 80 to 85 percent of the music downloads but is nowhere near that within the streaming business. It has also been losing download sales, with a 13 percent fall last year, adding insult to injury.

So Apple is again reinventing itself. iTunes would be adding a subscription service of $10 a month to stream songs, with only a few songs available for free. The streaming would allow users to download songs on up to five devices that could be played offline.

The tech giant is now busy licensing deals with music companies interested in the Semetric analytics included in the software. Musicians will be able to see who is streaming their music, how many of those people are subsequently buying albums on iTunes, and where they are getting heard so they can plan concerts.

Meanwhile, Spotify, which generates its revenue through ads, is doing great. The Swedish streaming platform released its full-year financial results last week, posting revenues of roughly $1.23 billion and a valuation of more than $8 billion.

At this point, the main question is whether Apple will be able to launch its new service on time for its big conference next week. A lot of pressure and eyes are on the tech giant known for having been a game-changer numerous times in the past. Will Apple convince millions of music fans used to free downloads to now pay up?

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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