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Where does a 800 pound gorilla sit? Anywhere it wants to.
That 800 pound gorilla is Apple and today it introduced what is probably the biggest change in music business since 2001, when it launched the other big change in music business, iTunes.
Though some might undermine the impact Apple Music will have, that would be a mistake. Apple Music is a huge change for music and it will by a serious blow to Spotify and other streaming services.
Last year Horace Dedieu of Asymco tweeted this chart, comparing the number of Amazon and Apple accounts:
Compare this to Spotify’s 60 million.
The biggest asset Apple has is its software-hardware platform. And I’m not talking about iTunes only. I’m talking about iPhones, iPods, iPads, Macs, OS, iOS, Watch OS etc. Anyone willing to compete against Apple, has to compete on Apple’s turf, with its hands tied.
Why is this so important? Say Apple decides to optimize its streaming process for certain apps and also decides not to share this info with outside app developers. Such developers may be left in the dark regarding optimum hardware usage for a better sound or longer battery time. By the way – iOS 9 comes with a better battery time. What a coincidence.
Even more, Apple Music will be available on Android too, coming this fall. So there you have it. It’s spreading.
But this is just the cherry on top of more than 14 years of continuous business development with global labels. The fact that Apple Music will be available in 100 countries is an extraordinary business feat. Anyone knowing just how complicated licensing is, knows how hard it is to stream, collect fees and distribute revenue to and from 100 countries.
Apple unveiled more than just a streaming service. Just like when Steve Jobs launched the iPhone, today Apple launched a product that never existed before.
Apple Music is a music streaming service, a video streaming service, a social network, a global radio and most of all, a curated music experience.
Let me just emphasize the “video streaming service” area. If you didn’t know this already, iOS alone dominates online video streaming. So Apple is already king of the hill on lots of user behaviors and now it just collected them all into one big service. Maybe that’s why Google never could pull a decent Youtube streaming experience on iOS.
And it’s not just Youtube Apple is going after. Facebook should be a bit worried also. Artists get a little more reach on their Facebook pages than, say, commercial brands. But if they want to share their news with all their Facebook fans, they still have to pay.
Apple Music makes a point by letting artists and fans connect in a seamless way. And this should send some chills up Mark’s spine. Once the artists are gone, there is also a big gap left within the social network.
Let’s face it. Technology can be boring and frustrating. The best thing Apple has done so far is teach the world that great products happen when technology meets the arts. And its Music service does just that. From curated lists to making sure artists get an way to connect to improving the battery time so users can have a better experience, it all ads up to a human experienced enhanced by technology, rather than the other way around.
This is where most of the recent tech companies have failed to understand their place in the world. Maybe Google can get away with being the Lovable Borg, but Spotify can’t. Facebook can’t. The lesson Apple Music will teach to the tech world is that technology is just not enough anymore.
Say what you will but one thing is for sure. Apple has deep pockets. With more than $194 billion in cash it can survive the end of the world on champagne and cigars (that’s not really a great combination, is it?).
Even more, it just reported it paid out $30 billion to its app developers. I’m not exactly sure how much it paid to record labels, but I can bet it’s a liiiiitle bit more than Spotify’s $3 billion.