Monday, 17 March 2014

Apple, Could Be Good For Everyone

What's next for Apple? This is a regular topic of conversation in my World, as the music industry continues to step through the next format change, from downloads to streaming.

For the last half a decade or so there has been lots of talk about something being an 'iPod/iPhone/iTunes' killer. Be it a device or service, there is a level of fixation on 'what's next?'.

Today the headlines are about streaming, Spotify, and now Beats are the current media darlings. I'm pleased somewhat to see the levelling of the playing field, in terms of what each of these services represent to the labels I distribute, in terms of revenue and marketing opportunities. Pleased, other than the cashflow issue my CEO predicted in 2009 which hinders labels development of their artists as it takes longer to see a return on the investment. Although I do appreciate the smoother revenue line they deliver, rather than the peaks and troughs of our iTunes sales depending on the release cycle for hit records or seasonal changes. This helps my plotting and planning to a certain extent, albeit less exciting to observe. Whilst some nice healthy competition is good to see, these debates got me thinking again about iTunes' next move. Part of the discussion about streaming services is how they convert trial/free offers, to paid. What are the barriers, other than the leap of faith by the music fan to 'rent' music, a concept many still struggle with. Where they all focus on a 'subscription' element, iTunes could really benefit, without them actually needing to follow suit and launch yet another £/$/€10 a month all access service.

The happy marriage of hardware with various media consumption offerings; Movies, TV Shows, Ebooks, Music, Podcasts, Newspapers, Magazines, Aps/Software and direct consumer billing gives Apple quite a good footing to become 'the new money'. By that I mean, using your Apple ID to pay for the goods on offer.

A personal example is the monthly reminder email I get from Apple that my Netflix subscription is renewing. Why did I pay via iTunes? Simply, because I have an Apple TV, and it was easier that way. I just paid for it via my Apple ID rather than going to a 'third party website' (I'm being deliberately ironic) and going through the lengthy sign up process including the need to divulge my credit card details. I trust Apple with that information, I always have. So, convenience and security are two takeaways from that.

Another personal example, for what I consider Apple's potential to be, is my attempt at buying my brother a gift subscription to Wired Magazine for his iPad and iPhone. I couldn't do it via iTunes as I discovered, but oddly it was my default setting, rather than going to the Wired website. Presumably Apple makes a nice bit from my monthly Netflix subscription, so why wouldn't they let me gift a subscription to a magazine, and benefit from that too? I will often gift from iTunes, be it Apps, Music or otherwise, and it is really convenient, can be quite personal, and helps with my inability to plan ahead and buy gifts for people on time!

Going back to my first example, I wonder how much Apple could gain by adding Spotify, Deezer, Rdio, etc to their Apple TV? By making it easy to add music to their living room from these established services, it would further cement the device and the Apple ecosystem in a customers home. The trump card would be surely to also make it viable for those companies to have the subscription billed via a users Apple ID.

The viability question, I know from other companies like is openly debated. There is a monetary reward for subscribers to pay via their website rather than in-app. I know that Apple's 'cut' is too rich, when you have price points of £1 a month, hence why it is noted within the app that it is significantly cheaper to buy direct rather than from within the app. Apple is missing a huge opportunity here. Make it more cost effective for third party services to allow billing via iTunes, and get involved in the subscription game, without doing anything other than being a new currency or payment method.

We know from Spotify's recent label and artist manager presentations that they know new subscribers are originating from mobile devices, so making it nice and easy for them would be a huge win for the various players out there, and for the music industry in general - but most of all Apple, as they would share in the income every month from those millions of subscribers for the various services.

That's not to say that Apple shouldn't continue to develop their own products and services, we're all still waiting to see if they'll ever add 'on demand' streaming to their radio and locker service. They have a well documented history in delivering close to identical consumer products that already exist... just in a more slick manner. 

Tightening up iTunes service offering on the customer billing side seems like an easy win, especially as it will reinforce their central role in their customers leisure time.

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