3. Financial Info
• 3-month trial subscription for new users
• 11 million members
• Apple did not intend to pay royalties, Taylor Swift got upset
• Monthly subscription
• $9.99 subscription or $14.99 for family subscription (up to 6 users)
• Freemium
• non-subscribers with an Apple ID can enjoy Apple Music Radio with ads and
have a limited number of skips
• Apple pays out ~73% of revenue to record labels and music publishers
• Apple makes ~28.5% on every subscription
4. Financial Info
• Apple quarterly revenue of $49.6 billion
• iPhone, Apple Watch, Mac & App Store drove revenue growth of 33% in the last quarter
• Predicted that Apple Music will add less than $1.8 billion (1%) to Apple’s revenue in 2016,
assuming 15 million paid-subscribers
• highly unlikely, expecting only 25% conversion from trial users (~3.5 million) by
November
5. Company History
iTunes, January 2001
iTunes Store, April 2003
iTunes Radio, September 2013
Apple acquired Beats Music & Beats Electronics, May 2014
Apple Music launched in 100 countries, June 2015
6. What’s HOT?
• Connect
• all-access pass to your favorite bands
• Platform for emerging artists to build up their fan base
• First step towards establishing one platform
• Beats 1: Hosted by Zane Lowe, former BBC Radio 1 DJ,
and other world renowned DJs
• Siri integration
7. Secret Sauce
•Consolidation and familiarity
•“Apple Music is built on a strong foundation. It’s an
evolution of something so many of us already know and
enjoy, iTunes.”
•Algorithmically-curated playlists and playlists curated by
music specialists
9. I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple
Music. I feel this deserves an explanation because Apple has been and will continue to be one of my best
partners in selling music and creating ways for me to connect with my fans. I respect the company and the
truly ingenious minds that have created a legacy based on innovation and pushing the right boundaries.
I’m sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the
service. I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those
three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and
generous company.
This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire
management team by playing live shows. This is about the new artist or band that has just released their
first single and will not be paid for its success. This is about the young songwriter who just got his or her
first cut and thought that the royalties from that would get them out of debt. This is about the producer who
works tirelessly to innovate and create, just like the innovators and creators at Apple are pioneering in their
field…but will not get paid for a quarter of a year’s worth of plays on his or her songs.
These are not the complaints of a spoiled, petulant child. These are the echoed sentiments of every artist,
writer and producer in my social circles who are afraid to speak up publicly because we admire and
respect Apple so much. We simply do not respect this particular call.
I realize that Apple is working towards a goal of paid streaming. I think that is beautiful progress. We know
how astronomically successful Apple has been and we know that this incredible company has the money
to pay artists, writers and producers for the 3 month trial period… even if it is free for the fans trying it out.
Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. I say this with
love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the
progression towards a streaming model that seems fair to those who create this music. I think this could be
the platform that gets it right.
But I say to Apple with all due respect, it’s not too late to change this policy and change the minds of those
in the music industry who will be deeply and gravely affected by this. We don’t ask you for free iPhones.
Please don’t ask us to provide you with our music for no compensation.
11. Spotify vs. Apple Music
• Launched in 2008
• 75 million users, 20 million of
which are subscribers
• social network: user to user
interaction
• No Taylor Swift, no Beatles
• Pays 70% of revenue to record
labels and music publishers
• More access for freemium
users
• Launched in 2015
• 11 million users, ~3.5 million of
which are subscribers
• social network: artist to user
interaction
• Yes Taylor Swift, no Beatles
• Pays ~73% of revenue to record
labels and music publishers
• Limited access for freemium
users
12. The Future?
• “one place, one complete thought around music”
• Apple can afford to be creative
Editor's Notes
Tell us what you like. Discover something you’ll love.
My music: your iTunes library
Playlists: created by you, plus you are able to save music available on Apple Music to different playlists so you can listen to it offline
For you: suggested playlists/albums based on (1) info users provide during set up, (2) your past purchases and listening history, and (3) adjusts when you “like”/“heart” a certain song, artist, or playlist. These individually curated playlists are updated 3x a day!!!
New: new music, 30million possible tracks (home page)
Radio: Beats 1 + old iTunes Radio which is now just called Radio. Beats is 24/7 worldwide live DJs (London, NY, LA)
Connect: Publishing and outreach platform for artists
iTunes Store: everything is integrated in one space!!!!
iPhone, Apple Watch, Mac & App Store drove revenue growth of 33% in the last quarter: this was a few days after WWDC where Apple announced upcoming releases/introduced Apple Music.
The image: we talked about it before in class, apple makes most of it’s $$ from iPhones so Apple Music doesn’t feel pressured to support the Apple Family…. Whereas Spotify takes a higher cut for profit because they need to sustain their company. Also, 15 million users is not likely because it took Spotify 7 years to reach 20m paid subscribers and even though apple is a favorited brand there is a high switching cost for users to move to apple music services.
January 2001- iTunes
April 2003- iTunes Store
September 2013- iTunes Radio: Internet radio service that lets users listen to automatically generated playlists based on direct input as well as collected data on music preferences (now called Radio or Apple Music Radio)
May 2014- Apple acquires Beats Music & Beats Electronics
June 2015- Apple Music launched in 100 countries
siri integration: “play XX top track”
Connect-
First step in establishing a single platform where artists can share all types of media with their fan base.
an all-access pass to your favorite bands with candid backstage photos, pre-released cuts from upcoming music videos, remixes, etc.
Provides a space for emerging artists to build up their social presence while up and coming artists with platform to share their content and make waves
quote is from apple music marketing video
apple music= = subscription-based music streaming + radio-like programming + artist-centric (user-centric) social network
70 % payout vs. 73% payout in royalties is something we should pay attention to. If apple becomes a real contender and gets a lot of users Spotify could be forced to increase their pay out to the music industry.
social network aspect is the biggest difference between the 2. Also if apple opens up to a more freemium services then ads on their site would have a higher benefit/payout than spotify.
they’re going to build up their user base, clean up the site, then add the other half of the social network integration
