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Apple Music Subscription Service Could Change Industry
Apple Music Subscription Service Could Change Industry
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
SEPTEMBER
07
2012

The Mac rumor mill is working overtime as Apple's Sept. 12 event grows nearer. Beyond the iPhone 5, there is speculation that Apple is readying new iMacs and even a streaming music service that would compete with the likes of Pandora.

The iMacs are a given sooner or later, so the real buzz is over the reported music streaming service. According to The Wall Street Journal, Apple is in talks to license music for a customizable radio service that would work much the same as Pandora. Doing so could cement Apple's dominance in the online music world, which already rocked the industry with the iPod and iTunes.

The Journal reports that Apple's service would work across its hardware family, including iPods, iPads and Mac computers. It may also work on PCs running the Windows operating system, but any device running Google's Android operating system would be left out of the party.

Amazon's Shakeup

Apple could not immediately be reached for comment, but Pandora, Spotify, iHeartRadio and other streaming music services may have cause for concern. If Apple gets into the streaming radio mix, it could quickly take over the market thanks to its strong ecosystem and loyal fan base.

"The battle right now really is for content. Amazon demonstrated that when they released the new Kindle," said Rob Enderle, principal analyst at the Enderle Group. "The Kindle is carried pretty heavily by content and if you don't have a content service that you can charge for then you don't have a mechanism to subsidize your hardware."

Amazon made a big splash on Thursday when it introduced a new e-reader, the Kindle Paperwhite, and three new models of the Kindle Fire HD. The Fires take on the high end of the market with advanced technology and plenty of content, from books to music to movies.

Relevant Products/Services Was Right

"Amazon turned the market on its head and made the hardware secondary. If that turn sticks, Apple is done with regard to tablets. That means to compete, Apple needs to have some set of services," Enderle told us. "We know they are working on TV with the cable companies. It would make sense to do music first because music is easier to do but they desperately need a set of services they can use to subsidize the hardware or a set of services they can bundle the hardware with to make the hardware seem more valuable."

Perhaps ironically, Microsoft beat much of the market when it launched the now defunct-Zune and its subscription music services. At that time, Microsoft prophesied that subscription music was going to be the future. And at that time, Apple still argued that people were going to prefer buying MP3s so they could own the collection. Apple's rumored move into subscription music would vindicate Microsoft's foresight, if not its execution.

"For Microsoft, it wasn't the 'being right' issue, it was an execution issue. If Apple finally embraces subscription music, the market will move more aggressively forward into that mode," Enderle said. "In many ways, Apples' moves reflect Microsoft's mistakes but Microsoft had the idea first. Apple just got it right first and we'll see if that happens again with subscription music."

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