Apple To Charge For iTunes Radio

I you like listening to iTunes Radio, it's going to cost you soon. Apple just announced that as of January 28th, the service will become part of Apple Music and will no longer be free.

The upside to this is that it will also become commercial-free, even though it didn't run many commercials in its free form at only 1 per 30 minutes or so.

This makes sense for Apple for a couple of reasons. First, it consolidates almost all of its programming under one a single Apple Music banner. Secondly, since the platform is beginning to gain some traction with paid subscribers, why give it away for free if people are willing to pay?

Of course this might have been the plan all along, with a merge of the free and paid services 6 months or so after Apple Music's launch (iTunes Radio has been around for a couple of years).

And artists, bands, songwriters, labels and publishers will rejoice as another free service bits the dust.

All that being said, Beats 1, it's ambitious world-wide radio station, will still remain free of charge.

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Apple Will Kill Off The Beats Music Brand Sooner Or Later

There have been recent conflicting reports that Apple is about to kill off one of it’s most recent acquisitions, the Beats Music service, leaving the tech world to ponder what will eventually happen with the service over the long term. Regardless of which side of the rumors you care to listen to, it’s probably fair to say that at some future date Beats Music as a brand will be no more, although the backbone of the service will still live on.

Apple actually gave us a hint that Beats Music wasn’t exactly a priority when it wasn’t included in the new iOS 8, and was only referred to in passing during the recent iPhone 6 introduction event last week. This was quite curious for a product that seemed to be right in the sweet spot of event.

Actually, retiring the Beats Music brand would strengthen the theory that the acquisition of Beats Electronics/Music was more about getting Jimmy Iovine on board than anything, although the company also got an extremely savvy digital music exec in Ian Rogers, who was CEO of Beats Music and is now in charge of iTunes Radio. There may be more to the acquisition than that simple supposition however.

The Apple sources have been pretty emphatic that regardless of what happens to Beats Music, the company was is not about to abandon the interactive streaming business. That said, Apple has a bit of a conundrum on its hands in that it still wants users to buy songs on iTunes, and it no doubt has promised ongoing support for this to the various record labels as well. Read more on Forbes.

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Apple Removing Music Download Apps From Its App Store

There's something brewing in iTunes land as Apple has removed many of the popular music downloading apps from the iOS App Store, which also includes those from third-party file sharing sites. Users that search for "music download" in the App Store now get a message inviting them to try out iTunes Radio instead. Most apps for streaming music services that don't have a download feature are unaffected, although both Soundcloud and YouTube have also made the blacklist.

The speculation is that there may be an update of both the iTunes Store and App Store coming in preparation for the upcoming iOS 8 operating system, and that Apple wants to pump up its flagging download sales. The new App Store reportedly will employ a new search algorithm, app bundles, and improved discoverability.

But it's not only music apps that have suffered. The App Store has also removed apps that include social sharing and ad watching as well, plus many developers report that Apple has asked them to alter their apps to remove any trace of music downloading.

It looks like the Apple Police are on the march, although that's not always a negative. Both iTunes and the App Store have a low degree of malware as a result, especially compared to other platforms. Let's see how this plays out when iOS 8 launches.

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The iTunes Store Shows A Hint Of Panic

There’s talk coming from various sections of the music business that Apple’s iTunes Store will soon offer high-resolution tracks for sale, and that the introduction might coincide with the future release of three Led Zeppelin masters. The unconfirmed details have the hi-res tracks in their full 24 bit glory encoded using Apple’s lossless audio coding, and priced a dollar more than the current lossy AAC tracks.

Mastered For iTunes To The Rescue, Maybe

The fact is that Apple has been accepting 24 bit tracks at up to a 96kHz sampling rate for more than a year now in their Mastered for iTunes program (called MFIT within the industry), but the final encode for the iTunes store was still done at the lossy AAC resolution, although they sounded better due to starting with a higher quality master.

Supposedly, the hi-res track launch is in response to the fact that Apple is seriously concerned about how quickly download sales are diminishing, with Nielsen Soundscan’s Q1 report finding that downloads have diminished 13.3% over the same time last year. Apple missed the boat when it launched iTunes Radio, thinking that it was a way to increase download sales instead of realizing that people stream because they don’t want to purchase their music anymore. Now it’s faced with sales falling far faster than anyone ever anticipated as streaming gradually takes over the music delivery space.

But offering hi-res tracks might be only a temporary ace in the hole for iTunes, record labels and artists alike. It doesn’t cost the company extra to offer hi-res tracks, since most are already delivered that way, and it increases the per track revenue. The only problem is that the majority of buyers probably aren’t interested in the higher fidelity in the first place, and would rather pay the least amount of money possible if they choose to make a purchase at all. Then the fact of the matter is that many pop-oriented tracks aren’t recorded that well to begin with, or use distorted samples or loops that probably won’t provide much of a difference in the end for the average listener. Buy one hi-res track that doesn’t seem worth it and you’ll probably never buy another again. Read more on Forbes.

iTunes Wants Exclusives

Faced with a downturn in download sales, Apple is now seeking exclusives and additional content from artists in order for iTunes to retain its edge on various competitors. Using the Beyonce exclusive from her fifth album that was released in December as an example, Apple hopes to convince other artists that providing iTunes with a window of exclusivity can be an advantage for all concerned.

Although Beyonce's album became a big hit and was the fastest selling album in iTunes history, she suffered a backlash as a result of the exclusive when retail giants Target and Amazon.com refused to carry it. Few artists are able to sustain a retail boycott of any kind, which makes providing Apple with an exclusive all the more dubious. Plus, is this really serving the artist's fans in the long run? You really don't want your fans to jump through hoops to get your latest release.

Streaming is clearly picking up steam and iTunes, which has around 80% of the download market in the US, wants to maintain sales for as long as possible. That said, using Beyonce as an example is a little like saying you get a good ride in a Rolls Royce, when few of us ever get to experience it.

There seems to be little incentive in giving iTunes an exclusive, and a lot to lose if you do. Maybe it would be better if Apple concentrated more on iTunes Radio instead.

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Which Streaming Service Is The Leader?

Spotify gets so much press and hype that we automatically think of it as the streaming service with the most listeners.

That's far from the truth though, as a new study from Edison Research shows that Pandora, at 31% of American listeners, is clearly the leader by a factor of 3 of the next competitor, as shown by this infographic from Statista.

What's probably more interesting is the fact that iHeartRadio is second with 9% and the relatively new iTunes Radio is right behind with 8%. Spotify follows in 4rth place at 6%.

What's not included is YouTube, which may in fact have a far larger audience than Pandora, if other studies and empirical evidence is true.

We're in the early days of streaming adoption, so expect this chart to be fluid. It very may be totally scrambled next year at this time.

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Follow me on Forbes for some insights on the new music business.

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Beats Music Punches, Spotify Counters: Let The Streaming Wars Begin

Beats Music is being launched today to much fanfare and rightfully so. Using “music curation” as its main calling card, it’s a different take on a theme used by other competitive services. Whether the public views that as a good enough reason to shell out their $9.95 a month, we’ll soon see.

In the meantime, Spotify is attempting to steal Beats Music thunder at every turn, announcing that it will now provide unlimited free mobile streaming (with ads) on the same day that Beats Music announced its launch last week. Now comes the official day of the launch and Spotify is at it again, this time announcing that it’s considering a new feature that programs upcoming music to your heartbeat. It doesn’t matter if it actually introduces this feature or not, it’s a juicy enough story to be front and center in the news, and that’s what the company really wants.

Welcome to the streaming wars, where the potential pie is so large that each seemingly small move by the companies involved can have extreme strategic importance. You think retailers beat each other up? You ain’t seen nothing yet (to borrow a phrase from Messrs. Bachman and Turner). Prepare for the major back and forth bashing to come.

Streaming music is actually divided into two categories; the radio-like non-interactive, and those that are on-demand. Pandora and iTunes Radio fall into the first category, where the user is unable to access specific songs, only playlists that are fine-tuned by a proprietary algorithm to match the tastes of the listener. On-demand services include Spotify and Beats Music, where a song or album can be called up as the feeling hits you.

Most of the on-demand services actually blur the lines between non-interactive and true on-demand, as they also make suggestions or provide playlists, and even provide access to online radio stations as well. Beats Music takes the playlist idea a step further by having them provided by well-known music celebs, niche leaders, or vaunted “people in the know,” although iTunes Radio does something similar with its themed and  featured “stations.” Read more on Forbes.

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15 Under-Appreciated Events That Affected The Music Business In 2013

We’re coming to the end of 2013, so now is a good time to look back at the music business happenings of the year to see the trends and events that affected it. The following 15 events may have been taken lightly at the time, but at least some of them will have a lasting effect on the industry.

The events are broken into three major areas: music distribution, artists and record labels, which all include tech and marketing related events to some degree. Here we go, in no particular order of importance.

Music Distribution

1. Spotify sets its mobile service partially free and expands into 55 countries, then licenses the Led Zeppelin catalog to help with the promotion. Time to get all the market share possible before the deep pocket competitors like Apple and Google hone in on the sector. 

2. Crying poverty despite 72 million monthly active users, Pandora tries to lower its licensing royalties by buying a terrestrial radio station. Royalty collection organizations, artists and songwriters decry the move as suits fly back and forth. Bottom line, Pandora still loses money.

3. iTunes Radio is unveiled amid much fanfare in September, reaches 20 million users in a month, then disappears from the public consciousness. Is the service a sleeping giant or just sleepy?

4. Beats Music and YouTube Music both postponed their launches until 2014. The streaming music services competition is stiff; they have to get it right out of the gate.

5. Twitter’s #Music lies dormant after few adoptions, which proves the point - just because you have a large user base doesn’t necessarily mean that users want to get their music from you.

6. Pirating decreases as users find that streaming is more convenient and efficient. Pirates are also found to be some of the most prolific music consumers, so is the decrease good or bad?

7. The first YouTube Music Awards show proves that it’s what seems like a good idea isn’t always so, as it draws shockingly few viewers. You can be the largest online music portal, but that doesn’t mean that users want to watch your event. Read more on Forbes.

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How Music Management Rollups Could Affect Music Tech’s Future

We’re living in a very interesting time in the music business. Unlike when the industry was caught off-guard by the MP3 revolution, the powers that be are totally on top of the one that’s happening now - streaming music - and they’re being proactive about dealing with it. Interestingly enough, they’re way ahead of the curve this time, even before the majority of the public. Let’s look at how this is playing out.

The first step in trying to take control of the situation came when the major labels pushed Spotify for an equity stake as part of the licensing deal that let it enter the US market. The labels weren’t about to lose control again like they did with iTunes a decade earlier, so this was a condition for the deal. Now with Spotify’s biggest competitor Deezer about to enter the US, you wonder whether the labels are asking for the same agreement. My guess is that they won’t get it this time, since they’re not in the same position of strength that they were even a year ago, as more deep pocketed competitors are already in the marketplace where there was no way the labels could get equity (like with the recently introduced iTunes Radio) and new ones are about to be introduced (like YouTube Music which had it’s deal in place before Spotify’s). 

A bigger problem for the record labels is that they’re no longer the pinnacle of power in the music business - managers are. Modern music management now includes many of the former duties of a record label, like marketing and promotion, as part of its core offering to an artist. And with artists now capable of ably recording their own masters without a huge financial outlay, the banking services of a label are no longer needed either.

That’s why some of the recent deals involving managers are interesting, because it can put them and their artists into a more leveraged position with the various music tech services. There are three very recent examples. Read more on Forbes.

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The Real Reason Behind YouTube’s New Music Streaming Service

By now you’ve heard the reports that YouTube is preparing its own music streaming service, and although the company hasn’t officially confirmed it, accounts of numerous recent private showings of the service to select partners have appeared. On the surface you can look at the prospect of a YouTube music streaming service and ask why it’s necessary, since parent company Google already has one of its own in Google Play Music All Access (this name has to be at least four syllables too long). Then you might wonder what YouTube has to offer that’s not being offered by numerous other services already. I’m glad you asked.

Let me say up front that I have very little insider information on the subject and haven’t seen the service myself, but you can figure a number of things out by just looking at the current landscape of the streaming music business and Google and YouTube’s place in it already.

First of all is that terribly long name for Google’s existing music service (Google Play Music All Access). I don’t care how big a company Google is, that’s not a brand that a user can get behind. Imagine a kid trying to explain this cool new service she just found and then tries to spit out that tongue twister of a brand name. About the only thing you can count on her getting right is “Google.” 

YouTube, on the other hand, is a brand that everyone knows, and most kids already use  it to discover their music. It has a built-in hard-core audience that contains precisely the prime demographic for consuming music (14 to 24 years old), plus another billion (with a “b”) or so active users. Adding a streaming music function becomes only just a new YouTube feature, not a new service. Read more on Forbes.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter and Facebook for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

More People Are Listening To Internet Radio

If there's any doubt about the popularity of streaming music, a new study by Edison Research should put it rest. The survey of more than 3,000 people age 12 and up about their online music consumption definitively proves that streaming has truly arrived. Here's what the study found:

• More than 80% of smartphone owners said they listen to some kind of Internet radio on their mobile gadgets. 

• A majority of Web users -- 53%, to be precise -- listen to Internet radio outlets, including personalized streaming, live online audio and music on-demand.

• Slightly more than two-thirds of those surveyed said they listen to more online radio than they did a year ago as they access content on more Internet connected devices. 

Surprisingly, that doesn't mean that terrestrial radio is losing listeners though.

• 90% of the survey participants still listen to terrestrial stations. 

• Almost 9 of 10 people listen to radio in their cars, but only 17% use Internet radio.

Expect to see these rates rise shortly as more users turn to iTunes Radio and Beats Music and the new YouTube music streaming services are introduced.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Follow me on Forbes for some insights on the new music business.

You should follow me on Twitter and Facebook for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

iTunes Radio Looking For Heat Seekers

As you know, iTunes Radio has launched and it's gotten pretty good reviews so far. It's very easy to use and easily accessible to any iTunes user, of which there are 545 million (although it's only available in the US for now). Users are able to create and personalize their own stations based on their particular tastes, although it comes with pre-set and featured stations as well.

If you've ever watched iPod or iPhone ads, you've noticed that the music is always cutting edge and ahead of the curve. I don't know who chooses it, but it's always great. Now comes reports that Apple wants to continue this trend by contacting all the major labels and asking for their "heat seekers" list, which is the list of artists or bands on the verge of breaking. Of course, this is designed to keep the service out in front of whatever trend that is currently happening in music.

Curation is the buzzword when it comes to music services these days, and Apple is also playing that game, as it's also in the process of hiring a number of music celebs from various musical genres to program genre specific channels. The service already employs a number of curators to keep the splash page new and relevant as well, but once again, this move is designed to keep them ahead of the curve.

One things for sure, if iTunes Radio didn't meet your expectations upon launch, it's going to get better, as Apple seems to be striving to improve the service in multiple ways.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Follow me on Forbes for some insights on the new music business.

You should follow me on Twitter and Facebook for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

The Implications Of iTunes Radio That Everyone's Missed

At long last Apple has launched iTunes Radio and so far the reviews are pretty positive. It’s extremely easy to use and provides enough features that many potential users will not even think about venturing outside the iTunes ecosystem for another service. in fact, a study in June by the GroupM Next determined that 34% of Internet radio users would switch from their current service on Apple’s brand name alone.

Do you think services like Pandora, Spotify, iHeart Radio and Slacker are worried? They should be, as a closer look at the study found that 46.4% of Pandora users, 47% of Spotify users, 46.1% of iHeart Radio users and 53.8% of Slacker users would leave their services for iTunes Radio when it became available.

But lets say that this study is seriously flawed and the attrition numbers aren’t anywhere near what was stated. The other services are still in for a world of hurt for the following reasons that seem to have been overlooked. Read more on Forbes.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter and Facebook for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

The Average iTunes Listener Spending Less

Last week Apple announced that it currently has 575 million iTunes accounts, each with a credit card on file. This is significant in that it's up from 100 million just 4 years ago in 2009. What it didn't say during this announcement is that the average yearly spend is significantly down.

In September 2009 the average iTunes user spent around $74 per year. Today that figure is down to around $40, according to a recent article in Billboard. If you do the math, that still comes out to a big payday of around $23 billion a year. Just to understand, this spend is for the entire iTunes store world-wide, including movies, videos, and books, not just music.

While the declines look ominous, keep in the mind that part of the reason is that iTunes has expanded into countries that are much poorer than the countries serviced previously, like Russia, India and Latin America. Also, there's some attrition from the early adopter countries like the US, South Korea and Germany, who've moved onto streaming while some of the world is only now becoming familiar with digital downloads.

Either way, if you look at the new addition of iTunes Radio to the already impressive lineup, streaming music is now about to take the next step into the everyday consciousness of the music listener, thanks to the huge installed user base of iTunes. And it's a user base that isn't afraid to spend money, even if it's less than before.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Follow me on Forbes for some insights on the new music business.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.