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Apple Unveils iTunes Radio: What It Means for Streaming Services

It’s already been an exciting and busy week for technology giant Apple. After lots of buzz and speculation, at this week’s annual Worldwide Developers Conference (WWDC), the company unveiled new upcoming versions of their operating systems both for desktops and operating devices, as well as a long-overdue new generation of their Mac Pro line, all coming this fall.

But perhaps the most significant unveiling where the music industry is concerned was the announcement of Apple’s new streaming music service, iTunes Radio, which promises to deliver playlists in the tradition of Pandora and Spotify. This expected announcement has been met with both a sense of excitement (from Apple users and fans) and dread (from existing streaming services who fear losing customers to the Apple juggernaut on name/icon recognition alone). Pundits have already been predicting that the appearance of iTunes Radio could cause even more problems for the already financially struggling Pandora, raising speculation as to whether it and other services could stay afloat.

But just because Apple has dominated the market in so many ways is no guarantee that this trend will continue. Case in point: on the day iTunes Radio was officially announced, in direct opposition to the predictions of most, Pandora’s stock actually went up, not down. Apparently, the details of the upcoming streaming service did not induce nearly as much fear as had been expected.

How do we explain this? It’s all speculation, of course, but perhaps the following details about iTunes Radio had something to do with it:

  1. The new service doesn’t offer much that is new. From most descriptions, its features are very much like existing streaming services with no real unique approach.
  2. ITunes Radio (predictably) caters primarily to existing Apple customers. The service is to be integrated into the new iOS7. This, of course, makes it remarkably convenient for hardcore Apple users to listen in on almost any Apple product, but doesn’t necessarily reach people outside that market. A few years ago, this wouldn’t have been that significant a detail, but with other high quality mobile devices now seriously competing for market share, it’s ever more important to make your service available across multiple platforms. Pandora and Spotify already do this, where Apple seems to be more ingrown. Taking current trends into account, this could make them less of a threat.
  3. ITunes Radio will be available only in the US for the near future. While other streaming services like Pandora are also limited to the States, others like Spotify are international in reach. This limits the amount of market share Apple can grab, at least in the short term.

Whatever the reasons, the sudden increase in Pandora stock prices is indication enough that no one really knows the far reaching impacts of Apple’s venture into the streaming music market. The fact is, no business, no matter how big, can expect to compete on name recognition alone; to compete, you have to deliver a product that people want more than they want something else. It is already uncharacteristic for Apple, with its long history of innovation in the market, to be the last major entity to step onto this playing field; to then present a product with no recognizable advantages over existing mainstays casts doubt on whether the other streaming services actually had anything to worry about. Certainly there is the potential for iTunes Radio to dominate in this arena, but Apple will probably have to offer something more in order to compete.

About the Author


David Tillman is an independent composer/arranger whose primary work involves writing jingles for commercials for radio and television, with several film and television placements to his credit as well. David has a fascination for all things related to the music business and the music industry in general, an obsession which his wife finds to be mildly unhealthy at times. His personal tastes in music are in electronica and industrial rock, and include The Chemical Brothers, Daft Punk and Nine Inch Nails (he loves that Trent Reznor is writing soundtracks!). When not in his office or in his man-cave, David enjoys skiing, hiking, the occasional game of golf, and sometimes just lounging by the pool. David lives with his wife and three children in Los Angeles, CA.

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Posted in: Music Industry