Apple Jumps Into Music Streaming Business

Jun 8, 2015
Originally published on June 9, 2015 2:28 pm
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People have been streaming music and talking about it for more than a decade, but the idea of paying a monthly fee to access millions of songs instead of owning your own still remains a niche market. That didn't stop Apple, which has just announced it'll launch a streaming music service. As NPR's Laura Sydell reports, many industry insiders believe that Apple, with its size and marketing power, could change things.

LAURA SYDELL, BYLINE: A lot of people have been wondering when Apple would finally move over into the streaming music business. Today, Apple's senior vice president, Eddy Cue, laid out the new Apple Music.

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EDDY CUE: It is a revolutionary music service with recommendations just for you, a worldwide live radio station with the world's best DJs, an exciting way for fans to connect with artists. And, of course, this is joined by the iTunes Music Store, the best place to buy music.

SYDELL: Well, it's certainly been the most popular place to buy digital music for over a decade, but revenue from Apple's music downloads are declining, and none of the existing streaming services have really taken off. According to the Recording Industry Association of America, only about 7.7 million fans pay for subscriptions in the U.S. Jeff Price, who founded the digital distribution service TuneCore, as well as a label, thinks one of the reasons that consumers are holding back is that access to all that music is confusing.

JEFF PRICE: I am completely overwhelmed by Spotify when I log in. It's an overwhelming concept to have access to every piece of recorded music ever made available at your fingertips.

SYDELL: In defense of Spotify and other services, they do have playlists. Jay Frank, the founder and CEO of music marketing firm DigMark, thinks curation and playlists are going to be key.

JAY FRANK: Consumers are going to be choosing based on who they feel actually have the best curated playlist. Playlists are the new radio stations for the future, and the ones that sound the best are going to help signal which service actually is the one that succeeds and comes out on top.

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UNIDENTIFIED MAN: We welcome our special guest, Florence from Florence and the Machine.

SYDELL: Apple has created a 24/7 internet radio station called Beats 1, which is programmed in three cities and includes the British tastemaker, DJ Zane Lowe.

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ZANE LOWE: We're looking for the most exciting music and the people that love it.

SYDELL: Apple's founder, Steve Jobs, didn't like streaming. He felt people wanted to own music. With streaming, you just rent access for a monthly fee. Apple is charging $9.99 a month after a free three-month trial. It doesn't have a free, ad-supported service like Spotify, but it's got 800 million credit cards in its iTunes Store, so it could be easy to flip people over. And Apple has a huge marketing machine. That's why TuneCore founder Jeff Price thinks they have a shot at getting fans to pay for streaming.

PRICE: They are just a hair's breadth away from being able to change this industry overnight. All they have to do is get the consumer to click that little button. Just click that little button, and overnight the industry changes because they got every other piece in place.

SYDELL: And Apple did change the industry once before. Before Apple introduced the iPod and the iTunes Store, there were other MP3 players and other music stores, but none of them were popular until Apple. And now the question is, can Apple do it again for streaming? Laura Sydell, NPR News, San Francisco. Transcript provided by NPR, Copyright NPR.