When introducing iTunes to consumers for the first time in 2003, Steve Jobs proclaimed that “we [Apple] think subscriptions are the wrong path.”
Jobs also claimed that customers didn’t want to “rent their music,” making a point that someone will listen to their favorite song thousands of times in their life, as opposed to a movie where someone might watch their favorite movie ten times. Jobs went as far as to claim that “Jesus couldn’t sell music subscriptions.”
This summer, Apple became the most recent of many companies to find success making a switch to the music streaming services business. What changed?
The problem with many streaming services for a long time was that it was a hassle to bring the files over to a MP3 player, which meant burning songs to a CD if one wanted to take their music with them on a streaming service. Many companies charged their customers extra for burning songs, which Jobs compared, in 2003, to being treated “like a criminal.”
With the rise of smartphones and native apps, it became considerably more convenient for consumers to stream songs, as they were able to do so to their smartphone or tablet.
A native application is simply an app that runs directly on a device, such as a tablet or smartphone. The difference between a native application and a web application in a non-technical sense is that the web app is accessed through a web browser (such as Google Chrome or Safari), whereas a native app is opened directly on the user’s device.
With many mobile browsers being slow, native apps were crucial in the conversion of music streaming services from an inconvenient power-user tool to something that Apple decided it should get involved in.
The first company to see widespread mainstream success in the music streaming business was Spotify, which first launched in the United States in 2011. It quickly came to prominence, and it featured a “freemium” model, meaning that it had multiple tiers to its service. One was a free tier, which gave users a Pandora-like service with advertisements, and the second tier was a paid version that gave users the ability to listen to all the music they want, ad-free, for just $10 a month.
Not to mention, users could download songs to their device free of charge.
Spotify challenged the iTunes model of paying for the rights to each individual song, and caused the music streaming industry to regain momentum. A couple of minor competitors existed, but there were not yet any major players to compete with Spotify.
Google entered the market as the most legitimate competitor, offering its Google Play Music service that combined the ability for users to download their own files into their “locker.” But it did not match the library and functionality of Spotify. When it launched in 2011, Google had not reached a deal with Warner Music Group, one of the largest labels in the United States.
Many artists chafed over time at Spotify and their freemium model, as they felt that their music was not being billed at the price it was truly worth. The climax of this series of disagreements was Taylor Swift pulling her entire library from Spotify, attacking the service for its royalty rates.
Swift penned an op-ed in the Wall Street Journal, saying the following about the worth of an artist’s music: “In my opinion, the value of an album is, and will continue to be, based on the amount of heart and soul an artist has bled into a body of work, and the financial value that artists (and their labels) place on their music when it goes out into the marketplace. Piracy, file sharing and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently.”
Her lumping of streaming in with piracy and file sharing is seemingly incongruent, but services such as LimeWire and Napster had been among the largest interactions early on between the technology and music industries, and both services were guilty of outright piracy. Many artists continue to distrust the technology industry today.
This distrust led to another major entry into the streaming industry: Tidal. Tidal is a project led by Jay-Z and a conglomerate of major artists to “take back” their music. Tidal has looked to gain customers by producing exclusive content, such as music videos and even occasionally singles releases.
Many critics have pointed out that there is nothing to set Tidal apart other than the slight edge given by this exclusive content, and have expressed concerns about the fragmentation of the music industry.
A few months after the launch of Tidal, Apple decided it was time to enter the fray.
Despite the strong words of their founder, they felt it was time that they got involved in music streaming, and thus launched Apple Music in July 2015.
Apple Music is a combination of the remnants of an old service owned by Beats and new features added by the Apple team. It combines a social function, a radio function titled “Beat One,” which is a 24-hour radio station, a section for the user’s personal music and suggestions and a section to look at popular songs on the service.
Taylor Swift, who had been distrustful of streaming services, chose to put her entire catalog on Apple Music, saying that for the first time it “felt right.”
What becomes of the music industry is unclear. If one service is unable to gain dominance, a path towards fragmentation may be unavoidable— comparable to when users had to use MP3 files, CDs and the radio in tandem to listen to all of their music.
Technology was supposed to centralize and organize the user’s music. It instead seems to be complicating it.