Since the launch of the iPod and the iTunes player in 2001, Apple Inc. has tried to change how people access music.
In the following years, it delivered to the consumers iTunes Store, iPhone and, finally, the streaming service Apple Music. In most cases, Apple handily formulates competing products and services – think BlackBerry phones or even the Sony MiniDisc player. The exception is Apple Music, the 10-month all-you-can-stream service launched in 2015, almost seven years after its top competitor Spotify Technology SA, and still very locked in a market share battle. [1
Apple's "services" business is the company's second largest cashier, delivering nearly $ 10 billion in revenue last year – surpassed only by iPhone sales. CEO Tim Cook said at a recent conference call that the company is on track to beat nearly $ 50 billion in annual service revenue by 2020 – twice as much as in 2016.
Of all segments in that industry – including app storage and cloud storage – Apple Music extends the company's brand beyond Apple products. And it has a very high cheerleader.
"We are really the fusion of art and technology," said Zane Lowe, a BBC Radio 1 DJ veteran who came to Apple in 2015. Mr. Lowe, who talked to The Globe and Mail by phone earlier this month, is now hosted the Beats 1 flagship radio station in the center of Apple Music, which he said is "amazing" instrumental to the company's strategy. "Every time there has been a significant shift in the digital age, it comes via Apple's ecosystem," he says.
Analysts have flagged Apple's service center as the light of the light; iPhone accounted for three-fifths of Apple's $ 63 billion in revenue last year, but unit sales are plateauing. "As the smartphone market matures, the services take growth baton from units, ultimately resulting in more stable growth and higher margins," wrote Morgan Stanley's Katy Huberty in a November report.
Long-term analyst Mark Mulligan watched Apple elbow into streaming, and have noted the emphasis on service companies that see the Apple Music term grow even further, such as packing new phones with Apple Music subscriptions, or using its rumored potential acquisition of the iHeartMedia radio network to expand both brand awareness and income.
"The long-term role of Apple Music is about how it can begin Really tangible effect on the rest of the business, Mr. Mulligan says. Apple does not share landslide, but according to an analysis by Mr. Mulligan's permanent Midia Research, Apple Music went ahead of Spotify in the US, number one in the music market in 2018 – with Apple of 26.3 million users and Spotify of 25.5 million.
Herr. Mulligan believes several artists will use services such as Apple and Spotify to bypass traditional labels to reach listeners in 2019; Last year, according to his analysis, such "artist direct" revenue increased 35 percent to $ 643 million. Apple Music has played a key role in some artists' careers by making it possible – for example, independent Toronto R&B singer-songwriter Daniel Caesar, whose song Get You debuted at Mr. Lowe's show in 2016 and benefited of millions of Apple streams.
Mr. Caesar has since gone platinum in Canada and the United States, and earned three Grammy nominations. "An artist like Daniel comes around, you hear the music, you realize it deserves to be heard," Lowe says. "That's the same as it was for me when I was a schoolchild, and I wanted to hear a band or song I loved. I would have to tell my friends at school about it."
Apple touches a lot on the entertainment industry, and use this for the benefits of artists it chooses to raise. It also integrates digital radio programs such as Mr. Lowe with its huge streaming library on demand – a deliberate strategy. "The overall goal of music streaming services is to keep people in that service," said Catherine Moore, an adjunct professor of music technology at the University of Toronto.
As in his time as a BBC DJ, Mr. Lowe sees the platform's role as a chance to mark artists – this time with several ways to do it. "Apple has given us an incredible amount of investment and time and believe in walking and building tools that say, hello, we will put you on a late night television show, or we will go and have some content created for you to reach Many people. "
Mr Lowe was tipped to Mr. Caesar by Carl Chery, then Apple's artistic cure. Mr. Chery, as it happens, skipped Spotify as creative director earlier this year – A sign that there is no clear winner yet for streaming music market share. Spotify is not sealed to a hardware brand and after all, and the free warehouse can pull into a wider range of consumers – there are over 100 million of them – who can then be lured to pay for full subscription.
Mr Lowe refuses to discuss competition simply, but seems unfazed by it. "Apple Music is just getting started," he says. "We are only four years in what I think will be a very long time of streaming."