A few news stories caught my last week regarding the music business. First, Spotify remains twice as large as Apple Music. Second, CD sales are up, digital downloads are, well, down, and online streaming music is all the same.
As to Apple Music vs. Spotify, it’s easy to see why Apple has yet to catch up to the industry leader. What’s the difference between the two? 30-million songs over here is much the same as 30-million songs over there if they have the same price tag. What’s wrong?
Writing for BBC News, Mark Savage outlined the problem with a quote from Apple executive Jimmy Iovine on the state of the streaming music industry.
The streaming services are all charging $9.99 and everyone has the same music
Why switch from one to another when everything is the same– music catalog, music quality, music price tag?
You get whatever song you want, you get your playlists – but there’s got to be more interaction between the artist and the audience.
Why are all the streaming services much the same?
The labels want you to have the same music. So there’s a real rub there. Sooner or later something’s going to give.
What is there to give? I see this problem being addressed by Apple in two ways.
The first, is differentiation by content. If Apple cannot differentiate Apple Music from Spotify and others in the music catalog, then Apple must add more unique content that cannot be found on other streaming services. Apple has the money to do that but it takes time to create more content and Apple’s multi-billion dollar video budget won’t yield much fruit until 2019.
The second, is another form of differentiation and a road Apple must tread carefully. Think Apple Music or iTunes as an independent recording label which finds and promotes new music talent exclusively for Apple’s products.
Apple has some exclusive deals here and there but much of the same music eventually shows up on every streaming service. Apple can afford exclusive deals. Spotify cannot. Digital downloads have been topped by CD sales. Again. That means the industry is changing even if much of what is available is the same as what is available everywhere else.
Apple needs to differentiate Apple Music and the only way to do that is the Netflix way. Original content not available on Spotify or elsewhere.