Can Apple overturn Spotify with new music streaming service?

Playing catch-up

by hodg100
Movies & TV Shows News

12

Can Apple overturn Spotify with new music streaming service?
According to a report in the New York Times, Apple is in overdrive as it readies the launch of a music streaming service to rival Spotify.
The move in conjunction, with Beats Audio engineers, would see Apple able to compete directly, with the launch of their own subscription based streaming service.

Other than the relative ubiquity of their products, and therefore the iTunes music app, Apple’s initial entry in to the market was set to be based on providing a lower priced service than the rest. According to the NYT having spoken with ‘several music executives,’ Cupertino is attempting to strike deals with the record labels that would undercut their existing arrangements. The idea would be to then allow Apple to charge around $8/month, when most of their rivals are charging $10.

However, it would seem that Apple has been unsuccessful in their initial attempts at obtaining discount, reflecting the fact they – and explicitly iTunes - are not quite such an important factor in the music business as they once were in the face of the all-you-can-eat streaming competition.

Toni Sacconaghi, a financial analyst for Sanford C. Bernstein, said that Apple’s apparent inability to reduce the pricing is a reflection of their relatively late entrance in to the market.

They’re used to being a shaper rather than a responder,” Mr. Sacconaghi said. “This is one of the few times where Apple is playing catch-up and not necessarily coming from a position of strength.”

Apple, however, remains by far the largest retailer in the music industry so there may be more behind the scenes wrangling, yet, but the industry appears unclear on how Apple’s impending service will compete with Spotify which, according to the latest figures, has already picked up 15 million paying subscribers since launching in the in 2008, with a further 45 million using the ad-supported free service.

Apple’s new music app, which is a collaborative effort between Trent Reznor (Nine Inch Nails) and other Apple and Beats employees, is to feature the new streaming music service and is reportedly being tested as part of a new version iOS, but will that be launchpad enough, only time will tell.

Over to you folks – can Apple make up for being late to the party and overturn Spotify? If so, how are they going to do it?

Source: NYT
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