Apple waited too long to get into music streaming

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Apple Music is in fourth place behind Pandora, Spotify, and YouTube By now, we’re used to Apple being late to the party. The company has a long standing reputation for taking a wait-and-see approach with new technologies before releasing its own version and touting it as the best.

It took Apple over two years to make the bigger iPhone 6 Plus after Samsung found success with its Galaxy Note line of smartphones, and three years to build the iPad Pro, its competitor to the Microsoft Surface. Most famously, it kept 3G out of the original iPhone, waiting until the technology had stabilized and become more widespread. With the iPhone 6 Plus, Apple’s strategy worked flawlessly, reaching the public at the precipice of big phone hype.Earlyreports indicate the iPad Pro may help boost the declining sales of Apple’s tablet over the holiday season, but the full picture hasn’t formed yet.

Apple Music isn't providing enough incentive for users to leave Spotify and YouTube

It seems like a smart strategy, but when it comes to music streaming, it is looking like Apple waited too long to get into the game. As of October, Apple Music has 6.5 million paid users, which is a great number for paying subscribers for such a young service. But Apple Music’s biggest problem is and will continue to be that millions and millions of people stream music for free from other services, and have little incentive to switch to a paid music service.

Let’s lay out just how large the head start its competitors have. Apple Music is essentially in fourth place, miles behind Pandora, Spotify, and YouTube, and all the companies ahead of Apple are only getting bigger and better. Pandora, which has 78 million active users, just bought Rdio and has plans to launch an on-demand service late next year, giving its users an in-house option and push it into direct competition with Apple Music. Spotify announced it had 75 million users in June, and expects to reach 100 million users by the end of the month. YouTube — which is easily the largest music streaming service — just launched a standalone YouTube Music app to make it easier to stream audio content.

What about next year? Even if Apple somehow manages to grow its user base ten times over, it’s still only at 65 million users, and it’s not at all clear that would slow down growth from Spotify and YouTube. If Spotify does hit that 100 million user mark this month, that means it would’ve doubled its base in the last year. Does it reach 150 million users this time next year? The target is moving for Apple, and unless it can find something that will get users to pay for Apple Music en masse, it’s going to be stuck chasing Spotify and Pandora for some time.

The iOS app is still filled with bugs

This isn’t a few million phones or tablets sold by Samsung or Microsoft that Apple has to overcome to achieve its accustomed dominance. 67 percent of Americans streamed music every week before Apple Music existed. With no free tier, Apple has the cumbersome job of convincing the public, the majority of whom have chosen free services, to switch from something they know and pay for the same music without commercials. Unless you must have the latest Drake mixtapes and albums or hate your current service, there’s little reason to pay for Apple Music. If Apple Music ever wants to match the numbers currently enjoyed by Spotify and YouTube — and there’s plenty of reason to believe it does — it’s going to have to step its game up significantly.

After five months, Apple Music on iOS is still filled with bugs. Using the service on the desktop isn’t any better, as you have to once again deal with iTunes on a daily basis like this is 2008. And the best part of the service, the always-on radio station Beats 1, does not require a paid account to use. If you’re like me and have avoided iTunes save for the occasional Adele purchase every four years, you don’t want to go back to using a bloated program when Spotify’s app is fine, Pandora works on basically every device, and YouTube is where you spend most of your day avoiding work anyway.

Despite being so far behind the competition, Apple isn’t totally out of it yet. It still sells hundreds of millions of handsets a year and has enough foot traffic in its Apple Stores to convince some users to switch. But if Apple really wants to catch up with the competition, it’s going to need a hook better than a three month free trial to convince people to leave services they’ve known and used for years.

When I reviewed Apple Music this past summer, I called its discovery engine one of the best around. It has great playlist curation and picked up on my taste rather quickly as I continued to use the service. Two days after that review was published, Spotify released its Discover Weekly playlist and blew everyone out the water. Discover Weekly is one of the best music features in years and has racked up 1.7 billion streams in five months. It’s the biggest reason why I have no intentions of leaving Spotify. While Apple Music’s playlists are still one of its top features, it has to figure out how to leverage the musical data it has on its users in an ultra-simplified way like Spotify has and get users excited about the service.

Apple's competitors have shown no signs of slowing down

Apple Music also needs to a standalone desktop app far, far removed iTunes, one of the least beloved pieces of software Apple has created. Earlier this year,Apple replaced iPhoto and Aperture with Photos for OS X, which has been a step up for most users. It should do the same for iTunes and build a new Music app for the desktop from the ground up. And Apple can’t wait until WWDC every June to make significant improvements to Apple Music. It should move to a more frequent update schedule to keep people engaged in the service.

When Apple Music launched in June, the thought process in the music industry was that there were still a ton of people who don’t stream music who would sign up for the service given Apple’s name recognition and experience with iTunes. But what’s actually happening is YouTube is making it easier to stream music, Spotify hasn’t been hurt in the least by Apple’s service, and Pandora is strengthening up its base to fend off any potential losses. Even worse, even if Apple Music gets to where it needs to be, with a hook like Discover Weekly or a big boost from CarPlay, it’ll be too late.

If Apple is serious about winning in music streaming, the bar must be raised. The name on the door isn’t enough anymore.



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