Apple’s Music Streaming Service Has a Few Good Ideas, But Are They Enough?

Apple Streaming Services Analysis
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Give Jimmy Iovine credit: He’s trying to solve the music business’s problems. Although you wonder what team he’s on.

People don’t know where to go; Iovine’s squad built a place. But it’s mostly a walled garden. That certainly didn’t work at Beats Music — until Apple bailed it out and bought it for $3 billion.

Apple and Iovine finally revealed their redesigned music streaming service last week at the Apple Worldwide Developers Conference in San Francisco.  There are three basic parts: Beats 1, Apple’s new global 24-hour live music station; Connect, where artists can share content and talk to listeners in real-time; and Apple Music, built around playlists curated by select artists and experts — for $9.99 a month.

Curated playlists are better than algorithms like Pandora’s, but just barely. We’d rather get advice from our friends than have our machines tell us what to listen to.

Having said that, putting all music features in one place is a good idea. But if the Connect elements are behind the paywall, they’re a nonstarter. And they only work if Apple gains more than 60% market share; otherwise, artists likely will post Connect-type content elsewhere, because they don’t want to take the chance that people won’t see it. That means Facebook, Twitter, Instagram and Wikipedia are still important. So is Connect the new Ping or the new SoundCloud? Is it free or behind the paywall — one of the many unanswered questions in last week’s presentation.

More important is the announcement of Beats 1 radio — provided we want radio at all. But the new service is Pandora’s worst nightmare, because we all prefer live to canned. It appears to be free, with no subscription fee and no ads. Competing with free, how is Sirius supposed to survive, never mind Pandora?

Still, the BBC Radio 1’s Zane Lowe is the voice of the station, and few in the U.S. care a whit about BBC 1. Yet for Apple, Beats 1 is a good idea — and may even be a form of unfair competition. Who else but Apple can afford this kind of service?

A warning to those looking to Iovine to save them: If Beats 1 radio is successful, Apple is going to have more power than ever. It will determine the next stars, and the labels will be fighting to be featured. And believe me, it’s not gonna be free-form; otherwise, radio consultants would not exist. Data will tell Apple what works. And that same data will keep most records off its service, which means those that aren’t included will have an even harder time getting noticed.

As for Apple Music, there’s no breakthrough feature that will motivate people to pay. It’s just a better-looking Spotify. It evidences no reason to give up YouTube, where music lives.

But the idea of family pricing — at $14.99 a month — isn’t bad, and all of Apple’s competitors will instantly move to match it. Which means the major labels that wanted people to pay more, will now see them paying less.

And it’s hard to forget the image of the original Beats Music service, which failed because of the paywall and its short trial period. Apple Music has got a longer trial period, but it’s still behind a paywall. Unless it goes into the freemium business, it will have limited impact, perhaps become a slightly larger Rhapsody. Right now people see no reason to pay $10 a month to rent music. We might eventually get there, but the key will be convenience and usability, and today’s product, although it makes steps in that direction, evidences no breakthroughs.

Breakthroughs come from the techies, and Iovine, et al., are music people. They built the service they want to use. Is it the one consumers want to use?