The Financial Times is on a roll when it comes to Apple music scoops, from breaking the news on its Beats acquisition to yesterday’s report that Apple “plans to push Beats to every iPhone”.
That’s essentially the story: “Apple will bundle the subscription music service it acquired from Beats into its iOS operating system early next year, instantly making it available on hundreds of millions of iPhones and iPads – and ramping up pressure on Spotify, the market leader in music streaming,” as the article put it.
A great scoop, but not a surprise: it would be more shocking if Apple didn’t preload Beats Music – or whatever it becomes, given the widespread rumours that it will be rebranded under the iTunes banner – on the company’s mobile devices.
That’s the single biggest advantage Apple has over pureplay streaming rivals like Spotify (if not Google) so it would be bizarre not to use it. But the wider implications of the FT’s story are interesting, including the clear signalling that Beats Music will be going global early next year too, after having remained a US-only service since its launch.
The success of a Beats preloading strategy will be about far more than simply getting the app onto people’s iPhones and iPads, though. The key factor will be how Apple persuades those people to stump up for its subscription service.
For example, will it give them a lengthy free trial, based on evidence from Spotify and others that it can take at least six months for a streaming service to wind itself tightly enough into someone’s musical life to persuade them it’s worth paying for a subscription? It’s no coincidence that six months is the length of the free beta period for YouTube Music Key, so it would be no surprise to see Apple follow suit, licensors willing.
But the crucial factor in Apple’s streaming strategy will be the price that it’s trying to persuade people to pay.
Remember those reports in October of Apple pushing for a $5-a-month price for Beats Music? “Apple’s best iTunes buyers spend about $60 a year on downloaded music — $5 a month. So if subscription services dropped that low, any download buyers that switched over to the streaming model would generate just as much revenue for the music labels,” as Recode put it when suggesting Apple’s arguments for that price.
Preloading Beats on iOS devices is a necessity, but the price of a subscription is what will define exactly how much pressure it puts on Spotify.