Apple appears to be planning a new streaming music service that will compete against — and possibly kill — apps like Spotify and Pandora, which currently let listeners hear music for free (as long as they listen to ads).
We don’t know exactly how this is going to work, so I asked a source who is an employee at Apple what was going on. My source told me to look at Taylor Swift. “Loads of big names left Spotify last year, and we all wondered why,” my source says. Although Swift got all the headlines, my source points out that a bunch of other less famous artists did the same thing. You can find a list of them here on Rolling Stone.
The source also notes that although Apple rolled out its own streaming product, iTunes Radio, last year, that rollout was restricted to the US. It hasn’t reached Europe yet, probably due to music licensing issues. That’s why at Apple “we didn’t get too excited” about the upgrade to iPhone’s Music app to include iTunes Radio, my source shrugs.
Music licensing expenses and revenues are the key to the big streaming deal that Apple appears to be planning. Business Insider recently reported that music industry execs are sick of the pitiful licence fees they get from streaming music, and they’re tired of this idea that it is OK for consumers to pay nothing to listen to music.
Taylor Swift has had a lot to say on the topic of licensing, and Apple’s relationship to it.
Last year, Swift pulled her music catalogue from Spotify, complaining that it was giving her music away for free. At the time, she said:
“[People] can still listen to my music if they get it on iTunes,” Swift told Time. “I’m always up for trying something. And I tried it and I didn’t like the way it felt. I think there should be an inherent value placed on art.
“I didn’t see that happening, perception-wise, when I put my music on Spotify. Everybody ‘s complaining about how music sales are shrinking, but nobody’s changing the way they’re doing things. They keep running towards streaming, which is, for the most part, what has been shrinking the numbers of paid album sales.
“With Beats Music and Rhapsody you have to pay for a premium package in order to access my albums. And that places a perception of value on what I’ve created. On Spotify, they don’t have any settings, or any kind of qualifications for who gets what music. I think that people should feel that there is a value to what musicians have created, and that’s that.
Swift called out Apple’s products by name in that quote, and slammed Spotify specifically, too.
Lo and behold! Nearly a year later, Apple is planning some sort of iTunes/Beats streaming product that will hurt Spotify’s provision of free streamed music.
What an amazing coincidence.
We don’t know what Apple is planning specifically, but the fact that it is able to wrangle the biggest names in music to fight its cause — Dr Dre, Jimmy Iovine, T-Swift, Zane Lowe — gives you an idea of just how much the music industry wants this to happen, and how much of a threat it will be to Spotify and Pandora.