Music consumption models, however, are far from consistent across the globe; for example, 91% of Sweden’s digital music income is derived from streaming, while German and Canadian consumers prefer to download their music. The differences between individual nations aside, the popularity of streaming is rising and in order to maintain its position Apple had to venture into the streaming market to keep the record labels on side if nothing else.
According to The Wall Street Journal, “one major record company makes more per year, on average, from paying customers of streaming services like Spotify or Rdio than it does from the average customer who buys downloads, CDs or both”. That is not to say that Apple would simply buy up any old streaming service, there has to be a reason that it selected Beats over Rdio or Spotify.
It was Apple – a technology company – that came to the aid of the recording industry as it struggled with 21st century consumer behaviours. In a 2007 interview, Doug Morris, then-CEO of Universal Music responded to queries as to why the recording industry was so behind the eight-ball:
There’s no one in the record industry that’s a technologist … That’s a misconception writers make all the time, that the record industry missed this. They didn’t. They just didn’t know what to do.
Since then, technologists have led the recording industry’s new distribution platforms. Rdio and Spotify were both founded by technologists and entrepreneurs. Perhaps the tables have turned and the new platforms required a (re-)intervention of music industry professionals? The credentials of Beats Electronics founders Jimmy Iovine bring together technology and music expertise.
As part of the deal, both Dre and Iovine are taking senior positions within Apple. Iovine had reportedly been trying to push subscription-based models to Steve Jobs as early as 2003 and while a move towards streaming did not happen in Jobs’ lifetime, Apple has now jumped in with both feet. So what does this mean for the future of music distribution?
Apple, Dre and Iovine have declined to share any details as to the future of their collaboration so any thoughts are purely speculative at this stage. It is, however, worth noting that to date iTunes has offered a number of exclusive releases, and Apple has begun exerting pressure on record labels to sign exclusive distribution deals. For example, Coldplay’s latest album Ghost Stories is exclusive to iTunes (pirated versions are of course available via the usual suspects) and the band declined to add its latest offering to Spotify’s catalogue.
Combined with the Beats streaming service as well as Apple’s own hardware, it is likely Apple will attempt to block out its competitors and (further) lock in consumers. At present, Beats Music is only available in the USA, but Australia will be the second country to have access to the service courtesy of Beats’ acquisition of MOG.
The digital music ecology is evolving at an advanced pace and accurate predictions are difficult to make. One thing, however is sure, as the physics of the media space change, we shouldn’t expect the winners to remain constant.
Steve Collins is a senior lecturer in multimedia at Macquarie University.
This story was originally published at The Conversation. Read the original article.
