Spotify Starts Dipping Toes in the Lossless Water; is Apple Next?

Reports suggest that Spotify is A/B testing a new lossless option on some users. A small group of Spotify users have been presented with an option to add lossless streaming to their subscription for an additional $5 or $10 a month. This would be the biggest lossless streaming service, if Spotify did go in that direction. But does this make any sense?

While a number of niche streaming services, and Tidal, offer lossless streaming, this higher-quality offering doesn’t seem to interest many people, and rightly so. It uses more data, and unless you’re listening on a very good stereo, you’re unlikely to hear the difference between Spotify’s 320 kbps MP3 and lossless, which is the same quality as CDs. (Want to find out? Test yourself.)

But as streaming services become commodified, and have little to differentiate them other than a handful of exclusives, they need some way to stay relevant. Spotify will certainly roll this out in the near future, but I don’t expect lossless streaming to be met with much success. If you listen to music on earbuds, or even Beats headphones, or if you often listen on a tiny Bluetooth speaker, paying for lossless would just be a waste. Some people will welcome this, but not enough to make a difference.

The next question is whether Apple will follow this lead. Apple Music is, after a rocky start, now relatively stable, and easy enough to use, and it’s now humming along, slowly adding new subscribers. But there is a ceiling to the number of people willing to pay $10 a month for music, and Apple Music will start hitting that soon. While lots of people like music, not many care enough to want to pay for it. So if Apple adds lossless streaming to their offer, it would either be to catch up with Spotify (if Spotify does indeed launch their lossless offer), or, if they do it first, to position themselves as a higher-end service.

But, again, not enough people care about lossless music. Just like Spotify’s 320 kbps MP3 files, Apple’s 256 kbps AAC files are good enough for the vast majority of listeners. I think Apple will eventually offer lossless streaming, but it will be hard to sell it.

Remember when Apple touted 128 kbps AAC files as “CD quality?” Then iTunes Plus files (256 kbps) as “high-quality AAC format?” Well, you can’t go on saying that one is CD quality, and the other is better, but, wait, lossless is really CD quality.

This said, if Apple started selling lossless files in the iTunes Store, I think this would make a difference. They would sell more music to the limited number of people who still buy music, because lossless files truly are CD quality, and anyone who still buys a lot of music would prefer having lossless files (even if they can’t hear the difference; they’re better as archival files).

As for high-resolution streaming, I think we’re still not going to see that on any massive scale for a while. There simply is no need.