Could Apple Upend Streaming Media by Competing with Spotify and Netflix?

For awhile now, there has been talk of Apple creating a Pandora or Spotify competitor.  Pandora is the online radio service that allows users to create automated music stations based on particular artists, songs, or styles of music.  Spotify is another similar service that not only allows you to make automatically generated stations, but also create custom playlists of particular songs you like.  Google recently announced at their developers’ conference, Google I/O, that they were bringing such a service called “Google Play Music All Access“.  For $9.99 a month users will be able to stream music from the entire Google Music library, as well as their own songs, in genre specific station formats, as well as adding specific songs they like to their own stations.

Speculation has been rampant that Apple will do something similar with iTunes.  Not long ago they introduced iTunes Match as a competitor to Google Music and Amazon Cloud Player.  Both Amazon’s and Google’s solutions allow you to upload your audio library to their servers with your account and listen to it anywhere you want through the web for free, before hitting the song limit that is.  Apple solution, however, costs $25 a year, and will instead scan your iTunes library and add high quality versions of the songs in your library from their servers, and only upload those files which it does not recognize or which iTunes does not have in its store.  However, these are not the same as they use music you have already purchased, rather than the entire library of the iTunes, Amazon, or Google Play Music stores.

If Apple is planning on offering a streaming subscription service, they are most likely negotiating royalty fees and licensing rights with the record companies.  And if they do announce this at their upcoming WWDC (World Wide Developer Conference), then iTunesFlixsome might call this a “me-too” move, even if speculation has gone on longer with Apple than Google on this move.

Admittedly this move makes sense, as Apple has probably the largest digital media library of all the online stores.  And we know that people are more than happy to stream music and pay for it, as indicated by Spotify’s 6 million paying subscribers out of the 24 million active users (in other words, 1 out of every 4 Spotify users pay for the service).  But what if Apple decided to do something more?  What if they not only offered a streaming music service, but also a Netflix competitor.

As mentioned before, Apple’s media library is by far the largest and most valued of the digital media stores, generating $4.1 billion in revenue for the company.  If Apple were to offer customers a streaming music and video service for $9.99 or so, then Apple could potentially 1-up Google and now compete more directly with Amazon, Netflix, and Hulu.  Not only would they have the brand recognition of iTunes, but they would already have a potentially large user base and network already in place.  Anyone who has a copy of iTunes, which already runs on every Mac and iOS device, as well as on Windows, could already have access to the iTunes Streaming network, which one could call iTunes Now or iTunes Streaming.

Big media, meaning the TV, movie, and music industries, could also benefit from this.  Apple proved that if you give people access to buy digital media at a fair price, piracy could be reduced.  Netflix has also shown this to be true as places with Netflix have decreased rates of online piracy.  Furthermore, they would be more likely to already have licensing deals ready with the movie and TV industry, as well as the music industry, and potentially be more friendly than competing services like Netflix.  Finally, there is the potential for continued consumption of the same series.  Apple could immediately offer the viewer not only the option to stream another episode or view content of similar type, as other online streaming services do, but could also to offer the user the ability to directly buy the content or a season of content straight from iTunes.  This means the content companies would not only get a royalty fee from viewing, but from direct purchasing of the content as well.

Realistically, Apple would not likely be able to stream all of it the content because some companies would want to maintain control of certain programs.  Case in point, HBO’s “Game of Thrones,”  which is only streamable through HBO’s own HBO Go, but on no other competing services.  People can only purchase and download episodes from iTunes.  Certainly HBO would not be the only service limiting this kind of access.  This brings up the point that Apple already has its renting service, but has been limited to movies since 2011, usually about $4.99 for an HD movie and $3.99 for a standard definition movie.  Apple stated previously that people preffered purchasing shows through iTunes rather than rent individual episodes for 99 cents.  This only helps the point though that it will be successful by offering a flat monthly or yearly rate for streaming movies, shows, and music from the iTunes Store directly.

So far, there has not been much indication to this idea, besides the streaming music option.  But it does not mean that it cannot happen.  Apple has pulled surprises before; this could just be another one.

(Posted on my other site

App of the Week: Spotify

I’ll be honest, I don’t download music that often; I’m not buying songs left and right like some people do.  If I buy a song, it’s either because I really really like it, or I’m about to leave on a trip.  9 times out 10, I open iTunes to listen to a new podcast episode, not music.  It’s not that I hate music, far from it, but it’s because I prefer the radio style of listening to songs, like Pandora (laziness also factors in here).  There certainly are some great songs (both that I own and don’t own) that I listen to over and over, but it does get boring after a while.  So since its American debut, I’ve been trying out Spotify for my music needs.

Spotify is music streaming service that has taken most of Europe by storm.  It recently has come to America, to many people’s excitement, with deal from the major record labels.  Imagine it as iTunes meets Pandora.  After creating your account, you download the desktop client and login to your account.  From there, you can listen to the music on your hard drive just like you would on iTunes, or make playlists out of Spotify’s collection of 15 million tracks.  
The music streams over the Internet sound great (and that’s not even the higher quality streaming).  I found almost every song that I looked for, including some I had forgotten.  However, there were occasions when I couldn’t find some random songs or albums, but the rest of the band’s stuff was there.  Also, people who have more of a taste for indie music or homegrown hits may have trouble finding some songs.

You can then connect your Facebook account, that way you share music with your other friends that use Spotify, making it a lot easier to be social.  Then by connecting with them through Faceboook, you can update what song you’re listening to on Facebook, or share music and playlists with your friends.  You also have the Spotify profile, where you can tell the world what songs you like, playlists, etc.  Likewise, it also syncs to, allowing you to scrobble tracks your hear in Spotify.

There are 3 prices for Spotify: free, unlimited, and premium.  The free version does all of the above mentioned stuff, has some visual adds that you occasionally see floating around, as well as audio ads that you’ll here about hot playlists and new music.  There aren’t too intrusive, much less of a shake-up than other ads (like Pandora), as they’re all music oriented and for Spotify, though I’m glad I finally don’t have to see the visual ad anymore for Katy Perry’s “Friday Night”.  That ad just never left my screen.  I think Spotify could benefit from culling ads to be similar to the playlists they are in, such as ads for rock bands in playlists composed or rock music, etc.  The Unlimited version ($4.99 a month) pretty much just gets rid of ads and is supposed to allow unlimited streaming, but more on that in a minute.  The Premium version ($9.99 a month) does the same as unlimited, but adds high quality streaming (really really sounds great), offline caching on devices (kind of like downloading the song temporarily for when you don’t have a great Internet connection or don’t want to use bandwidth), get early listening rights to new releases, and allows streaming to your smartphone with the Spotify app.  The app is free, you just pay for the service, so free and unlimited users can sync their own tracks (in iTunes library) with it and browse the catalog, but can’t stream music.

Now about that unlimited streaming.  At the moment, Spotify allows all users to stream music without limit in America, even free accounts.  But if it follows the path that our European friends are on, then free users won’t have this for much longer, before being cut down to 6 hours a month.  When or if that will be, nobody seems to know yet, but my bet is that it won’t last more than a year since the release date.

One thing that gets me down about Spotify’s free version is lack of a radio mode.  I like that you can build playlists of your favorite songs, but sometimes I just want to listen, not build.  I was hoping there was a radio mode, much like Pandora or Slacker Radio do, but it seems this is only available to Unlimited and Premium users.  Fortunately, you can get around this by listening to other people’s or Spotify’s own playlists, as well as getting Spotify extensions.

Spotify is available on Windows XP, Vista, and 7, Mac OS X 10.4-10.7 (Tiger through Lion), and has mobile apps for Android, iOS (iPad and iPhone), Symbian, Palm, and Windows Phone as a free download.  Spotify, as of this post, is on an invite only basis, but you can request an invite at