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Penny Fractions: Apple Music's Slow March to Relevancy

Hi, hi! I hope people are getting back into the swing of the new year. This week I’ll be talking abou
Penny Fractions
Penny Fractions: Apple Music's Slow March to Relevancy
By David Turner • Issue #69 • View online
Hi, hi! I hope people are getting back into the swing of the new year. This week I’ll be talking about the last year of Apple Music within the broader context of Apple causing headlines after Tim Cook revealed its upcoming quarter of revenue might only resemble an ancient empire instead a slightly larger ancient empire. I also wanted to do a survey this week but I gotta handle some personal stuff so that’s on hold. Either way enjoy the newsletter.

The State of Apple Music
2018 appeared to be a pretty good year for Apple Music at least within its home territory. Though no solid numbers were ever officially given it was reported that Apple Music was approaching, then eventually surpassed Spotify in the number of paying music subscribers. Just to clarify Spotify certainly leads Apple if we were to include non-paying users, which is something many of these headlines never make explicit enough to my liking. Now, let’s investigate this a bit harder.
Who cares about the number of subscribers? Apple: Well, Tim Cook last year said “We’re not in it for the money,” so I wouldn’t guess the actual number of subscribers is keeping many Apple up at night, beyond continuing them to send positive press releases. Artists: Well Apple Music does pay better than Spotify but are those one-thousandths of a penny difference really that big for most artists…probably not. It’s rare to see an artist complain about Spotify payment then to only praise Apple, because the difference is really marginal. Labels: These minor kingdoms within multinational companies certainly care about the number of subscribers, since most money made on the platform ends up in its pockets.
In 2018 Apple Music didn’t really introduce a ton of new features that one would point to explain such growth. The California company did highlight DJ mixes with steps towards better monetization of that content, the ability to search by lyrics, started a beta for its new artist dashboard, adjusting the user interface to be easier to promote artists, and more telco deals to funnel users towards Apple Music. None of these changes showed much desire to improve the core music product, which I get to more a bit later. The only hint of that was reports about Apple potentially investing in iHeartRadio, but so far has nothing come of that yet. Instead from my vantage point would show that Apple Music’s growth is more spurred by a “superior product” but simply because it’s on the iPhone.
(An exception here is that Apple Music did lock down Bad Bunny for a Beats 1 show, which eventually lead to this cross-promotion with his debut album X 100pre. Apple here again was attempting to undercut the control that Spotify/YouTube hold over Latin pop by simply throwing its entire weight behind a single artist. Sadly I don’t have access to the Nielsen numbers to see if the album performed better on Apple Music than Bad Bunny’s older material, but would love to know. Also Spotify and Bad Bunny did do some album promo, but Apple Music relationship appeared a bit deeper. )
Doom & Gloom
Tim Cook in a letter to shareholders last week said to expect Apple Q1 2019 revenue to be around $84 billion instead of the potential $89 billion that was expected. Cook placed some blame on the senseless Donald Trump driven trade dispute between the United States and China, while reaffirming hopes that this will turn around soon. Industry commentary, in particular Ben Thompson of Stratechery highlighted that Apple’s long term issue in China can be found in its eroding advantage with the iOS platform as more people simply use WeChat; the issue he highlighted is that simply non-flagship phones by Apple are continually underperforming in a manner that should be fairly clear at this point. These are intriguing insights, but let me shift back to Apple Music.
...maybe notsomuch...
Now that we’ve situated Apple, none of this news would imply a sudden change to Apple Music’s basic product. I doubt they’ll be any price change or core feature adjustment—though I’d be shocked in the 2020s if music streaming holds at $10 a month. My own speculation is that Apple Music will slowly just be rolled into a larger Apple services bundle with potential TV streaming, storage, etc. That way “paying” for Apple Music essentially is just part of the experience of owning an iPhone at certain point. Now this is an idea I’ve held onto for a little while, but a little bit of recent Apple news is making me wonder a little about that proposition.
On Sunday it was revealed that you’ll be able to directly buy Apple content using a Samsung television. Essentially now opening up Apple’s content outside of the Apple TV context and freeing it up to a potentially new market. To quote the Verge:
The iTunes Movies and TV Shows app, which will be available in 100 countries on both Samsung’s 2019 TVs as well as its 2018 models (after a firmware update), marks the first time Apple has allowed third-party devices to access its video library outside of Windows PCs. It could also be a prelude to a video streaming service that Apple is currently rumored to be working on — which is tellingly also reported to be coming to 100 countries.
Now Apple Music was already available on Android, so this isn’t entirely new territory, but it does make me think again that whatever does happen with Apple’s music products can offer a glimpse into future directions. It’s for that reason I’d like to end with chatting about the actual Apple Music app experience, which I wrote about last year.
When I opened the app recently I was reminded how it remains a cluttered mess. Typically I just search for the music I want, so I avoid the overwhelming feeling of swimming in advertisements, not music recommendations, once you hit the home screen. Compared to any other music app, Apple Music feels designed to baffle the consumer before ever arriving at any music. Still what’s more frustrating is that I really like Apple Music’s curatorial taste, however nearly four years after the product’s launch it doesn’t feel like much effort is placed in championing that fact.
Apple Music will continue exist, raking in subscribers all while further locking people into the Apple ecosystem. Yet I’d love to see the product do or aspire to do more. Though at this point expecting such from any western music streaming platform remains in the realm of hope.
6 Links 2 Read
Artists x Subscriptions - Art of the Manger
I think one of my longest through lines of this newsletter beyond that YouTube being a giant mess, it’d be that direct artist subscriptions makes so much sense to me. MixCloud is experimenting with it and Bandcamp already offers it, so I hope to see more movement in this space.  
This piece went rather deep into all the players within the Indian market and reaffirmed to me that I’ll be more interested in what new features services like JioSaavn and Gaana introduce rather than following Spotify and other western players struggle to gain a foothold. (Speaking of Gaana Music Ally just ran a piece on the music streaming service I didn’t want to forget.)
Anna Nicolaou dug into Spotify’s global 2019 plans and retained a healthy skepticism that the company could repeat its Latin America success across the globe. The fact so many people didn’t expect such success and hope to repeat in markets with fairly different music climates gives me a bit of reason for pause.
I’d like to do more genre/niche cover over the year and Clint Choi’s breakdown of Lo-Fi hip-hop scene is certainly worth a read to get sense of a growing scene that’s still finding itself.
Buzzangle released its yearly report on American music streaming habits—Nielsen also did the same. I’ll say that it isn’t super interesting but it is always worthwhile looking at how these consumption habits are shifting in a broader year-over-year terms.
The last article this week is a deep look into who in the music industry is jockeying for political power. Extremely relatable.

The Penny Fractions newsletter arrives every Wednesday morning (EST). The artwork was done by the graphic designer Kurt Woerpel whose work can be found here. Any comments or concerns can be sent to pennyfractions@gmail.com. Does this newsletter need more subscribers? No. Would it like more? Yes, my god yes. So tell people about it to make these dreams come true.
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David Turner

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