Few of us were shocked when Apple announced its foray into streaming music. Before announcing iTunes Radio, Apple had literally spent months laying the groundwork with record labels as it sought a way to thwart interlopers like Spotify and Pandora from siphoning off its iTunes revenues.
Much like Pandora, iTunes Radio will allow us to customize radio stations based on genres, songs or artists. We’ll be able to favorite songs that we like on a particular station, sending additional signals about our unique musical interests.
With iTunes, Apple is the largest music seller in the world – so the company already has tremendous brand recognition in digital music. Nevertheless, Apple will have to be careful not to cannibalize its digital music sales by giving us free listening in the cloud; with iTunes Radio, we’ll see prices to purchase individual tracks as an enticement to buy.
Another challenge for Apple will be the existing and forthcoming competition. Google announced its own streaming music service – Google Play Music All Access – last month at its I/O Developer Conference. So streaming music will represent the latest chapter of Google and Apple trading elbows. And that’s just for starters.
Google vs. Apple … vs. Amazon
Amazon reportedly wants into the scrum as well in what has been described as the next round in the “Google-Amazon Deathmatch.” Amazon sells a ton of music through its Amazon MP3 service and like Google has the infrastructure and relationships to make a serious go in streaming music.
The music biz continues to change as more and more of us head to the cloud for our daily listening. Large companies like Google or Amazon might make better headway in negotiating licensing deals than the smaller existing companies in streaming music. (Artist royalties have certainly been a major obstacle to profitability for Pandora.) And Apple still knows how to create and market products as well as anyone. Game on.
Playing nice: who are partners and who are enemies?
So if Amazon follows Apple’s entry into the fray, it will be interesting to see how things shake out. There are plenty of other online music companies already out there like Rdio and Last.fm, but what could really complicate matters are the loyalties of partner companies. For example, in April Twitter launched its #music service as a way of letting people share and listen to music in real time without leaving Twitter. The social network partnered with Spotify and Rdio and, in fact, if you’re not a member of Spotify or Rdio then all you get is a 60-second preview of each track.
So how will the entry of companies like Twitter alter the cloud music ecosystem in the longer term? And how will the Google-Amazon-Apple musical battle royale play out in the cloud?
In the end, much of the success or failure of these cloud music ventures will come down to consumer choice: Will we pay $10 bucks a month for Google Play Music All Access or suffer the indignity of annoying commercials to listen to Pandora’s free version? Or will Apple lure droves of us to iTunes Radio with features like previews of upcoming songs?
Then there’s the performers themselves: after all, they’re the ones talented enough to create all those songs we want to buy. Which cloud music platforms will be the best at circumnavigating that fragile love triangle between themselves, the fans and the bands? Even Lars Ulrich is now on board with the new internet playbook – so who will get the most marketing mileage out of developing strong relationships with artists and record labels? Save me a front row seat to watch.