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New thinking, new technology for the creative sectors
A MediaTainment Finance supplement

The long awaited Apple Music, the iPhone and iPad maker’s move into the streaming music business, has finally arrived.

The service is scheduled to go live on 30 June. And the media frenzy surrounding its launch triggers questions about whether the music streaming business is about music or about money first and foremost.

Apple Music is the result of the computer giant’s ambitions to own the world’s largest digital music platform now that fans’ love for Apple’s iTunes, the world’s largest music downloads store, is waning.  Apple Music will be playable on all devices carrying Apple’s iOS operating software. Some 1 billion iOS  devices, including 74 million-plus units of iPhones and more than 21 million units of iPads, had been sold by this year’s first quarter.

Available to customers as long as they keep paying their monthly subscription fees, Apple Music has been created after the US tech conglomerate acquired the highly acclaimed Beats Electronics, jointly owned by music executive Jimmy Iovine and rap legend Dr Dre, last year.

And the Beats go on
Beats Electronics included Beats Music, its founders’ attempt to challenge the then and still music streaming market leader Spotify. But Apple CEO Tim Cook must have been so impressed with its quality, he agreed to pay US$3bn for Beats Music and Beats Electronics’ much coveted headphones manufacturing venture.

Among other services, including an apparent mean music discovery feature and alleged exclusive content, Apple Music subscribers will also have access to more than 30 million songs from major and independent labels.

Additionally, it offers Beats 1, an international live round-the-clock digital radio platform operating from London, New York and Los Angeles, led by former UK BBC Radio 1 DJ Zane Lowe.

But is Apple Music going to be the killer app that slays existing operators thanks to its existing dominance in the music downloads business with iTunes’ estimated 800 million-plus subscribers?

Apple Music’s competition
With ambitions for a stock exchange listing, Spotify responded to the Apple Music news with the announcement of new investors. It has just completed a US$526m fundraising round, including US$115m from Nordic telecoms giant TeliaSonera for a stake of 1.4%, valuing Spotify at about US$8.5bn.

Tyler Goldman, Deezer’s US CEO, tells TechMutiny the company has tried not to overreact and copy rivals’ strategies in the expanding streaming sector by focusing its strategy on its customers, first and foremost.
 Rivals might also say the same. But coming from the TV sector before joining Deezer, Goldman says he feels more objective about its growth approach. “There seems to be a focus on who’s getting a piece of the pie instead of creating the pie,” he declares.

UK-based Psonar’s pay-as-you-go model is targeting a world where you don’t need a credit or debit card in order to enjoy the riches music streaming has to offer. “Ten dollars a month subscriptions are not affordable to millions of customers around the world, while ad-funding can be interruptive and restrict your enjoyment,” explains co-founder/CEO Martin Rigby.

To continue reading this article and other coverage of technology disrupting the creative industries, download TechMutiny Issue No.10.

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