Apple Battles Other Streaming Services for Music Listeners in a Post-download World

The buzz is growing over whether Apple may enter the streaming music space, which is ripe for further innovation as adoption grows and downloads slow. (PHOTO CREDIT: Mark Lennihan, AP)
The buzz is growing over whether Apple may enter the streaming music space, which is ripe for further innovation as adoption grows and downloads slow. (PHOTO CREDIT: Mark Lennihan, AP)

Oh, those kids. Some of them don’t even know what a music download is.

You may have missed this if you’re over 20, but the current tussle for consumer ears and their wallets pits Internet services that offer streaming music against the tech giant that a generation ago re-energized the music industry by replacing controversial music-sharing site Napster with the 99-cents-a-song digital download.

Yes, we’re talking Apple, whose iPod-anchored iTunes store proved a death knell to record stores everywhere. Fast forward 14 years, and it’s not vinyl or CDs that risk a demise but the very concept of music ownership.

Instead, listeners—particularly the sought-after mobile-savvy younger demographic —are increasingly likely to listen to music streamed via high-speed Internet services such as Spotify, Pandora and even music video-stuffed YouTube. Some are free, many are fee-based, and none existed when iTunes was in its rocket-like ascendancy.

This change in habits partly explained why Apple, number one in so many hardware and software categories, shelled out $3 billion last year for Beats Electronics, which included not just its popular headphones but its nascent human-curated subscription streaming service, Beats Music.

Investors and digital music industry executives will be listening closely to what Apple says Monday at its Worldwide Developers Conference about its next possible move in streaming music arena.

“After (the recent boxing showdown between) Mayweather and Pacquiao, the next big battle is Apple versus Spotify,” says Daniel Ives, analyst with FBR Capital Markets.

Spotify is the freemium-model giant with some 60 million subscribers that recently announced it was adding features such as podcasts, playlists and even videos. These were a direct nod to YouTube’s massive presence as a source of music, particularly for younger listeners for whom radio and even MTV are ancient artifacts.

If Apple could create a “new channel to monetize the golden ecosystem they already have, that would be the way to go,” says Ives. “In many ways, streaming music could pave the way for whatever’s next, perhaps streaming TV.”

For Paul Resnikoff, publisher of Digital Music News, what’s at stake “is nothing less than the future dominance of how people listen to music.”

Apple could well have a leg up on competitors such as Spotify and Pandora – the streaming leader with nearly 200 million registered users – through its Beats acquisition, which also netted its music industry veteran creators, producer Jimmy Iovine and musician Trent Reznor.

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SOURCE: USA Today, Marco della Cava

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