Apple begins its conquest for ears

Digital Life was at Apple's Worldwide Developers Conference 2015 to see the tech giant begin the biggest battle in music-streaming history

Tech giant Apple has finally jumped on the music-streaming bandwagon with its own offering, Apple Music.

It combines a digital music service, a worldwide 24/7 live radio station and music downloads from its iTunes Store into a single app.

Subscription streaming services were at the heart of the music industry last year, generating US$1.6 billion (S$2.2 billion) in revenue, or some 23 per cent of the digital music market, according to the Digital Music Report 2015 by the International Federation of the Phonographic Industry (IFPI).

Global subscription revenues rose 39 per cent, while music download sales fell 8 per cent from the year before. In addition, paying users of subscription services rose to an estimated 41 million last year, the IFPI report said.

The launch of Apple Music is a no-brainer, especially after last May's US$3 billion acquisition of Beats Electronics, which makes a popular line of headphones and speakers, and owns subscription-based Beats Music service. Industry observers had long anticipated that Apple was after Beat's music-streaming service rather than its headphones.

Apple Music is going to give the likes of Spotify and Deezer a run for their money. In Singapore, local telcos Singtel and StarHub have their own music-streaming services - Amped and KKBox respectively.

Apple Music will be launched in more than 100 countries on June 30. Local pricing is expected to be released closer to the launch date. The service will be available on Apple TV and even on Android smartphones later this year.

In terms of pricing, Apple Music is close to the competition (see table below). It will cost US$9.99 (S$13.50) per month and offers a free trial period of three months. A family plan at US$14.99 will cover six users.

Ms Samantha Lee, 34, a marketing executive, said she would consider switching to Apple Music if the price and selection of music are at least as good as those of the KKBox service she now uses.

"I think the family plan is especially attractive, as it saves money and is something other music-streaming services do not offer," said Ms Lee, who uses an Apple iPhone 5s.

The reaction from Apple Music's rivals was as one would expect. Spotify founder and chief executive Daniel Ek mocked Apple Music's launch on Twitter with an "Oh ok" tweet, which was quickly deleted.

Deezer's chief executive officer Hans-Holger Albrecht was much more measured: "Ultimately, consumers will decide which streaming service meets their needs best - the biggest brand might not necessarily offer the best fit for them and the jury is out on Apple Music."

StarHub said that increased competition is good for the industry, as it boosts awareness and adoption of legal music-streaming options. Singtel pointed out that its Amped service offers free streaming to all users and its premium service allows free data usage on the music - the only service to do so here.

Apple will, at the very least, put pressure on its rivals, because of its fiercely loyal fan base and rich ecosystem, said IDC's Bryan Ma, vice-president of client devices research at the market research firm.

Apple can be confident it can quickly claim a large chunk of the music-streaming market, said Mr Matthew Pollins, digital media lawyer at Olswang Asia.

Spotify has only 60 million active users, he said, while iTunes has close to a billion. "Apple will probably expect to be the biggest player in this space within as little as a year," Mr Pollins said.

A version of this article appeared in the print edition of The Straits Times on June 17, 2015, with the headline 'Apple begins its conquest for ears'. Print Edition | Subscribe