Apple Music’s Big Hurdle

Wwdc logoApple is expected to announce Apple Music, the company’s streaming music service, at the Worldwide Developer Conference today. This service will be taking on established players such as Spotify and Pandora, and, with Apple coming late to this party, will they be able to compete?

On the one hand, Apple is going to have to overcome mature services, such as Spotify (60 million users; 15 million paid users) and Pandora (79 million users). On the other hand, Apple has more than 800 million existing users around the world, and this may make it relatively easy for the company to at least get a share of these users to try out the service.

Also, while Spotify is available in 64 countries, Pandora is only available in the US, Australia and New Zealand. It’s likely that Apple Music will be available in a large number of countries from its launch, giving Apple an advantage over the smaller services, but perhaps not over Spotify.

One way Spotify has developed a committed user base is through the service’s integration with Facebook. This means that users can share what they listen to, if they want. (For a while, Spotify required that users have Facebook accounts; this is no longer the case.) Apple tried, and failed, with a “music social network,” the infamous Ping, and it is rumored that they will bring back something similar with Apple Music. But it’s important that Apple Music also link well with Facebook and Twitter.

Apple’s big hurdle is unseating Spotify, but if Apple Music is as transparent as I think it will be, this actually might be easy. Remember that Apple doesn’t need to make a profit from Apple Music; they’re using this as a way to get people to buy iPhones and iPads. Spotify lives and dies from its user subscriptions; Apple can break even, or even lose money, and still be happy.

Rumors say that Apple will offer three-month free trials to Apple Music. Apple is even rumored to be releasing an Android app, extending the reach of Apple Music. With this in mind, it’s clear that lots of users will try the service.

Of course, Apple has to compete with free, ad-supported services. One of the big unknowns is whether Apple can convince iTunes users to pay a monthly fee, rather than listen to ads on Spotify.

Apple has already redefined the music industry once; can they do it again with Apple Music? We’ll know later today exactly how they plan to try.