The late Steve Jobs is much credited to launch music in a digital future with the invention of the iPod and iTunes store. Now, his successor Tim Cook seeks to grow Apple's influence in music through one of the oldest audio forms: terrestrial radio.
Apple's discussions about a potential deal with the American radio group iHeartMedia, first reported by the Financial Times last year, emphasize how the iPhone maker seems to maintain the close relationship with the music industry like Jobs's foster.
Music leaders say that after a late introduction to music playback in 201
"Apple stumbled out of the port with a poorer product three years ago. Apple Music did not become this spectacular product like iTunes, said a senior executive at one of the" big three "record companies.
But management added that Apple in the past year has become "more aggressive."
"They become more serious. . . They come to us with new ideas all the time, as they would not have done two years ago. "
" A Changing Guard & 19659008] As Spotify, Apple Music offers unlimited access upon request to a library of millions of tracks for $ 10 in the United States (£ 10 in the UK) a month. Apple's service is closely integrated with its other services and devices, from the Siri to the HomePod speaker.
Since the start of its streaming efforts with Beats, the headphone and music programmer purchase, in 2014 for $ 3 billion, Apple has continued to increase its offerings through acquisition in September of this year, Shazam, the music recognition startup, buys $ 400 million. It also spent millions of dollars to hire the founders of Asaii, a music analysis company, in October.
Meanwhile, Beats co-founder Jimmy Iovine retired in August, and Oliver Schusser, who previously worked in Apple London's office, moved to California this year to lead the music service worldwide. In August, Apple Music claimed Brian Bumbery, a veteran musician to stars like Madonna, as its author.
"It's definitely a shift of shift," said a music director, pointing to the shift away from Iovine's strategy to pay high prizes for exclusive releases by artists like Drake.
But Apple has not given up on Beats 1, its 24-hour digital radio station helmed by DJs as former BBC star Zane Lowe. Despite celebrity DJs like Nicki Minaj who brings in the big crowd, the daily radio station for radio stations has not taken care of the way Apple hoped when it was released three years ago.
Apple's call to invest in iHeartMedia, the bankruptcy company dominating US radioactivity, demonstrates how it is looking for new ways to expand the audience for Beats 1.
Any deal can also help Apple to close the gap with Spotify, who is still world leader in streaming music, and industry leaders say it has been better to attract customers. Despite the fact that Apple Music has added 6m customers over the last six months, Spotify grows faster globally, increasing with 12m subscribers of 87m in the same timeframe. Label leaders also say that Spotify audiences tend to be younger and use the service more often than Apple Music's more mature demographic.
News about the potential movement of a Silicon Valley giant in the fighting traditional radioactivity surprised many in the music world. However, any iHeartMedia deal will also be in line with Apple's emphasis on human tastes and cure, rather than algorithmic recommendations, to select new artists to promote or compile playlists.
According to people familiar with the negotiations, Apple has considered buying a stake in the radio group, as well as signing a marketing or promotional partnership.
Another option under consideration is that Apple buys iHeartRadi's streaming platform, which would be a relatively inexpensive way to reach the service's 120m registered users.
"Terrestrial radio is not the power it once was, but there are millions of people listening to the radio," said a great music director. "These radio sockets will inevitably migrate to electronic services, and they can be hardened against Apple."
Mark Mulligan, analyst with Midia Research, said that any deal could give Apple the knowledge required to succeed in radio, often driven by strong personalities and brands.
"Apple understands that when radio becomes correct, it will be an important resource," he said. "They have realized that the building radio is not as easy as putting music in the sequence."
"You have to know how to program, build personalities and brands," he added. "Apple is still on that journey [with Beats 1] and [iHeartMedia] would give them industry IQ. "
Chasing higher revenues
As Apple confronts a mature smartphone market, music and other media services become an important part of overall revenue growth. Mr Cook has said that in 2020 wants revenues from its online services, including Apple Music, App Store and Apple Pay, to hit $ 50 billion – a doubling of 2016 levels. The company's revenue from services peaked $ 10 billion for the first time in the company's last quarter.  Recommended
In addition to the billions of dollars it generates in subscriptions revenues each year, Apple sees music as a key to keeping users loyal to their iPhones and encourages them to buy their a other devices, at a time when growth is much more difficult to find in the smartphone market. A person near Mr. Schusser said that music could be part of a combined offer together with Apple's upcoming video service, which is expected to launch next year.
Apple has been able to increase revenue by charging more for its devices. Providing media, such as a free music service with iPhones, is another way Apple could justify higher prices, suggested Mulligan.
Unlike Spotify, which must lose significant losses as a stand-alone company, Apple can also subsidize streaming service – something strangely difficult to earn due to royalties paid to artists and labels – through its highly profitable devices.
Cook has stated such a tactic, and tells Fast Company this year that Apple is "not in [music] for the money".