The Wall Street Journal is reporting that Apple is planning to offer a digital music streaming service to compete with Pandora and other online streaming services. The service is said to include customized listening and on-demand options.
At this point, Apple is still negotiating terms for digital music streaming rights directly with music publishers. Pandora recently broke off negotiations with publishers, falling back on the default licensing rates determined by the Feds. Apple seems to be counting on its long relationships with publishers established with the introduction and growth of iTunes music market to negotiate a wider set of streaming rights that could allow Apple's proposed service more options in terms of how listeners could interact with the service and use the music. Such a move would likely increase royalties payments, but being able to offer a wider range of listening options than other streamers could also give Apple a competitive advantage - something that a late entrant into the market needs.
The WSJ article was unclear on what kind of business model Apple hopes to use, or even if the service was developed primarily as a separate profit center, or as a means to expand Apple-branded apps for their mobile devices. What is clear is that the digital audio streaming market is expanding rapidly - Pandora has 150 million registered users, Spotify reports 33+ million users, and Clear Channel's iHeartRadio pulls in some 45 million listeners a month. If Apple does develop a pre-installed audio streaming app (especially as part of an OS upgrade), it will very quickly have access to millions of potential listeners - and if it offers better, or more, listening options, Apple could quickly become a major player in this growing market.
Source - Apple Plans Digital Radio Service, Online Media Daily
No comments:
Post a Comment