Apple’s traditional strategy for hardware and digital services alike: bide its time watching other companies do something clunkily, then steam in with a superior product when the time is right.
But here’s a thought: could the rapid innovation around on-demand streaming music be triggering a change in thinking Judging by a widely-shared Billboard report on Friday, Apple may be finally preparing its entry into the on-demand streaming music market, spooked by a faster-than-expected “double-digit decline” in download sales from its US iTunes Store.
The story claims that Apple is in “exploratory talks with senior label executives” about launching a fully on-demand service. “They are feeling out some people at labels on thoughts about transitioning its customers from iTunes proper to a streaming service,” claims one source.
“So when you buy a song for $1.29, and you put it in your library, iTunes might send an e-mail pointing out that for a total of, say, $8 a month you can access that song plus all the music in the iTunes store. It’s all in the ‘what if’ stage.”
$8 a month would certainly be a bold move, if Apple plans to undercut the $10-a-month standard pricing for subscription services.
Apple taking on Spotify, Deezer and other streaming services isn’t a surprise in itself: it’s always been an inevitability given the wider transition from ownership to access that’s happening within the digital music market.
Yet there’s a whiff of Apple not quite being as in control of the timing of its move as would usually be the case, as US download sales look set to enter a decline – Billboard notes that overall US digital album and track sales were down 13% and 11% respectively year-on-year in the first week of March.
Recent reports have suggested that Apple remains intent on persuading more labels and big artists to grant the iTunes Store windowed exclusives on big albums to disrupt the businesses of its streaming rivals – a policy that could segue neatly into the launch of an on-demand streaming iTunes.
It’s not quite Hell freezing over, even if Apple’s late CEO Steve Jobs was publicly critical of subscription music as a model – note his 2010 quote about seven-inch tablets being “too big to compete with a smartphone and too small to compete with the iPad”, three years before the company launched its iPad mini.
More surprising is the claim in the same report that Apple is also considering extending iTunes to Android devices. While sensible from an overall business perspective – iTunes Radio might be a good trial run, with the additional bonus of making Apple’s personal radio service even more competitive with Pandora – such a move would mark another significant strategic shift for Apple, away from using its digital entertainment services to sell its own devices, not those of fierce rivals like Samsung.