Originally iTunes was disruptive. It came into existence to fill a hole in the music industry: Record companies didn’t want to digitialze albums due to their fear that bootleggers would upload the tunes for free to websites like Napster.com. This is wear iTunes came in. They premiered a site focused entirely on selling songs in the digital era in a convenient way. The fact that it was convenient, since the iPod was then swallowing market share at an extraordinary rate, made it easy for consumers to use. The fact that they sold the songs at a good price for the record companies lent comfort for the industry to change. By these factors they were innovative for the age. Then they stalled.
For a decade iTunes remained comfortable as a service to buy albums or singles for their products, leaving music streaming to services like Pandora radio. This was a comfortable arrangement as smartphone ubiquity and selective song streaming were not mainstream; reality soon changed.
Spotify came teetering into the market. It entered into the music arena and up-heaved the status quo: Suddenly the consumer could save specific songs from his or her favorite artist to a library or listen to a personal favorite off of that new album. Spotify quickly stealing market share from the music distribution juggernauts; Pandora and iTunes slowly lost loyal customers and so too did the record companies lose revenue. There was push back, of course; Taylor Swift’s withdraw from this platform was the most notable resistance to this new form of music delivery. In the end it did little to stop Spotify.
The music industry eventually came to grips with the general public’s willingness to pay for subscription services instead of traditional albums or digital access licenses like iTunes was selling. iTunes was not slow to change; in fact it changed at a remarkably normal rate: It adopted this model, along with maintaining its old model, right around the time that YouTube Red and Google Play Music were coming onto the market. Its worry and need to diversify is evident in its expansion onto the Android platform, a rather nontraditional move for Apple.
Two questions remain for the future: The first, will these copy-cat services steal Spotify market share? The second, will this streaming service stave off the loss of current Apple customers?Read More