National / International News

Apple is behind on streaming, but it has a secret weapon

Marketplace - American Public Media - Fri, 2015-06-05 02:00

How many times can one company reshape the way we consume music? That's the question Apple is facing Monday, when it's expected to announce two new music streaming options in an attempt to make up the ground it's lost to the likes of Spotify and Pandora.

Apple didn't invent digital downloads, but arguably, it perfected them. The iTunes store is still a force, but it's starting to slip, with sales dropping double digits last year. The streaming is market is small, but crowded and growing.

Let's take a look at what we know so far about Apple's potential entrance into streaming:

What's an Apple streaming service look like?

Apple has made one modest attempt at streaming already with iTunes Radio. The Pandora competitor has been quietly expanding, but it's so far failed to make much of a splash. Apple is expected to relaunch the service with more distinct channels and big names attached like the BBC's Zane Lowe, Trent Reznor, Drake and Pharrell Williams. That's important for securing Apple's hold on streaming radio overseas.

"The problem with Pandora — because of rights issues and how [little] money they have — is they operate in very limited markets," says music industry analyst Bob Lefsetz. "So one would anticipate by virtue of launching in all these other markets [with] their brand name, Apple will make huge inroads and probably win in streaming radio."

But likely more lucrative is a subscription-based on-demand streaming service from Apple. Reports in the New York Times and Wall Street Journal say it'll cost around $10 per month for unlimited streaming, similar to what's available from Spotify, Tidal, and Beats Music, which Apple acquired last year.

It's not clear how long Beats Music will be around after Monday. The sale gave Apple a chance to look under the hood of an active, albeit small, streaming service and put a lot of expertise on Apple's payroll, says music technology analyst Mark Mulligan.

"Beats built a service, from the ground up, around curation and programming and editorial, which is a very different thing from what Spotify did," he says.

So what happens to the iTunes store?

Apple will essentially offer three different ways to deliver digital music: radio, on-demand streaming and downloads. The best-case scenario for Apple is that each arm will appeal to a different kind of consumer: if you like Spotify, Pandora, or your old iPod Nano, Apple will have an option for you. 

"I really think there are different customers for these different kinds of experiences, and it makes complete sense to me that Apple would want to be in all three spaces," says Serona Elton, Associate Professor and chair of Music Media & Industry at the University of Miami. 

"If I subscription service does its job well enough, you never have any reason to buy music again," say analyst Mulligan – and he thinks that shift would be acceptable to Apple. "The labels are much more concerned about Apple eating its own lunch than Apple is."

Record labels are nervous because streaming changes the economics of how we consume music, Mulligan says. The revenue is more incremental, at fractions of a cent per play, instead of $10 up front for an entire album. Unlimited streaming also means people listen with more breadth and less depth — one might enjoy a wide variety of artists but spend far less time with each. That could hurt revenue in the long run, as could free, ad-supported streaming.

Why doesn't Apple have an free on-demand option?

Apple is expected to offer some kind of free preview of its streaming service before shuttling customers to either a paid subscription service or radio. It's also reportedly urging record labels to make Spotify to drop its free tier, and attracted the attention of the FTC in the process.

About three-fourths of Spotify's 60 million users don't pay, using on-demand streaming on desktop with occasional ads. That "freemium" model is great for acquiring users and it keeps Spotify competitive, but it isn't a big moneymaker. One analysis found a play on Spotify Premium generated .68 cents in royalties on average, while free plays averaged just .14 cents.

Lefsetz says the big elephant in the room is YouTube, which has become the go-to when you want to to hear to a song without paying. Eventually users may pay $10 per month for convenient, on-demand mobile streaming, he says, but not yet.

"Eventually it's going to work out, but the rights-holders are trying to close the door on free too soon, which will cause piracy," Lefsetz says. "If Apple went with a free tier it would have a chance, but the way it is now it's not looking good."

So how will Apple pull this off?

As we saw with last year's U2 debacle, about half a billion people use iTunes, and Apple can get stuff to them very quickly. The company already has data and credit card information for those users, which would make an Apple streaming service convenient and easy to adopt. 

"People who already consider themselves 'Apple people' based on all of the devices they use [may] try it out and find it appealing enough to be worth the cost, even though they could find the same content elsewhere," Elton says. "It's not just about the content, it's about the experience."

Apple's other crucial advantage is that its not really a music company. It's a tech company with a music arm. They can afford to sell and stream music at a loss, because ultimately they're trying to sell devices. That's not true of any competitors.

"Apple can afford to throw endless amounts of money at this and not worry about whether its going to cover its costs. Spotify can't do that," Mulligan says. "Spotify is doing that, but on a limited time scale."

Service Free option? Compatibility on Android Music Quality Play songs on demand? Share playlists with friends? Offline listening option? What makes it special? Tidal No Yes Higher quality: 320 Kbps or above Yes Yes Yes Higher royalties to music creators, audiophile friendly Spotify Yes Yes Higher quality: 320 Kbps or above Yes (paid) Yes Yes Easily build and share playlists with friends Songza Yes Yes Lower quality: 192 Kbps or below No No No Extensive number of curated playlists by mood, genre, or activity Rhapsody No Yes Lower quality: 192 Kbps or below Yes Yes Yes Large music library Rdio Yes Yes Lower quality: 192 Kbps or below Yes (paid) Yes Yes Exclusive music selection Pandora Yes Yes Lower quality: 192 Kbps or below No No No Music discovery based off finely-tuned robot algorithms Beats Music No Yes Lower quality: 192 Kbps or below Yes Yes Yes Really, really cool headphones Apple Music (rumored details) Yes No Lower quality: 192 Kbps or below Yes (paid) Yes Yes Apple.

Apple's streaming service marks a sea change in music

Marketplace - American Public Media - Fri, 2015-06-05 01:58

Apple is expected to announce its long-rumored streaming music service next week during its developers' conference in San Francisco.

The service has been anticipated ever since the tech giant bought Beats, the headphone and streaming music company, last year. It is expected to cost about $10 a month, and include radio-like music channels with DJ hosts.

Apple will enter into a crowded field with established players such as Spotify and Pandora, which command the most music streaming plays.

The company is taking on that challenge as music consumption shifts from downloaded, and bought, mp3 tracks to streamed music that is either made available free through ad-supported networks or through a monthly subscription.

In May, Warner Music Group, one of the three biggest music license holders, said that streaming music revenue in the last quarter surpassed revenue from downloads for the first time, growing 33 percent.

Younger audiences, such as 20-year-old Sylvie Grace, a musician from Chicago, are increasingly streaming rather than downloading.

"I used to [download]," Grace says, "when my mom was paying ... but I haven't bought something online in a long time."

Twenty-year-old Michelle Chan, who was visiting the Apple store in downtown Chicago on a recent afternoon, says she streams music for free on Spotify, as much for the convenience as for the price.

"They have playlists all set, so you don't have to look for music. And you can type in whatever you want," Chan says, adding that she does occasionally pay to download music, but only when it is not available on Spotify.

"The trend right now is pretty clearly that streaming is growing by leaps and bounds," says David Bakula of the entertainment tracking firm Nielsen.

Single track sales of mp3s on iTunes and elsewhere are down about 10 percent so far this year, Bakula says, while the volume of on-demand streams, in which Apple has little presence, has almost doubled to more than 110 billion in the first five months of this year.

"We found that two-thirds of people are streaming music on a weekly basis," Bakula says, "It's really permeating every demographic of society."

This massive audience is fragmented among a number of disparate music services: Spotify, where they can play specific songs on demand; Pandora, which plays music in channels, curated by an algorithm; YouTube and Vevo, which stream music videos; live streams of terrestrial radio stations with DJs, and other services.

Apple could entice that fragmented audience just by making music streaming easier on the iPhone, for example, by integrating into the phone's native music app.

Colin Gillis, an analyst who tracks Apple at the brokerage firm BGC Partners, has been sounding caution about the tech giant's reliance on the iPhone for profits, and says diversifying into other revenue streams and protecting their revenue from music are both important goals.

"They should have a streaming music service. They should have a streaming video service, a la Netflix," Gillis says, adding that ancillary services are still likely to generate only a small fraction of Apple's profits in the near future.

Apple readies streaming music service

Marketplace - American Public Media - Fri, 2015-06-05 01:58

Apple is expected to announce its long-rumored streaming music service next week during its developers' conference in San Francisco.

The service has been anticipated ever since the tech giant bought Beats, the headphone and streaming music company, last year. It is expected to cost about $10 a month, and include radio-like music channels with DJ hosts.

Apple will enter into a crowded field with established players such as Spotify and Pandora, which command the most music streaming plays.

The company is taking on that challenge as music consumption shifts from downloaded, and bought, mp3 tracks to streamed music that is either made available free through ad-supported networks or through a monthly subscription.

In May, Warner Music Group, one of the three biggest music license holders, said that streaming music revenue in the last quarter surpassed revenue from downloads for the first time, growing 33 percent.

Younger audiences, such as 20-year-old Sylvie Grace, a musician from Chicago, are increasingly streaming rather than downloading.

"I used to [download]," Grace says, "when my mom was paying ... but I haven't bought something online in a long time."

Twenty-year-old Michelle Chan, who was visiting the Apple store in downtown Chicago on a recent afternoon, says she streams music for free on Spotify, as much for the convenience as for the price.

"They have playlists all set, so you don't have to look for music. And you can type in whatever you want," Chan says, adding that she does occasionally pay to download music, but only when it is not available on Spotify.

"The trend right now is pretty clearly that streaming is growing by leaps and bounds," says David Bakula of the entertainment tracking firm Nielsen.

Single track sales of mp3s on iTunes and elsewhere are down about 10 percent so far this year, Bakula says, while the volume of on-demand streams, in which Apple has little presence, has almost doubled to more than 110 billion in the first five months of this year.

"We found that two-thirds of people are streaming music on a weekly basis," Bakula says, "It's really permeating every demographic of society."

This massive audience is fragmented among a number of disparate music services: Spotify, where they can play specific songs on demand; Pandora, which plays music in channels, curated by an algorithm; YouTube and Vevo, which stream music videos; live streams of terrestrial radio stations with DJs, and other services.

Apple could entice that fragmented audience just by making music streaming easier on the iPhone, for example, by integrating into the phone's native music app.

Colin Gillis, an analyst who tracks Apple at the brokerage firm BGC Partners, has been sounding caution about the tech giant's reliance on the iPhone for profits, and says diversifying into other revenue streams and protecting their revenue from music are both important goals.

"They should have a streaming music service. They should have a streaming video service, a la Netflix," Gillis says, adding that ancillary services are still likely to generate only a small fraction of Apple's profits in the near future.

Teenager dies after car hits tree

BBC - Fri, 2015-06-05 01:50
A teenager dies and another is seriously injured after their BMW 3 series car crashed into a tree in Fife.

Silicon Tally: How many researchers does it take...

Marketplace - American Public Media - Fri, 2015-06-05 01:46

It's time for Silicon Tally! How well have you kept up with the week in tech news? 

This week, we're joined by Marketplace reporter Stan Alcorn.

Click the media player above to play along.

Eye injury forces Kieswetter to quit

BBC - Fri, 2015-06-05 01:42
Somerset and England wicketkeeper Craig Kieswetter announces his retirement from cricket aged 27 because of an eye injury.

British Museum 'guarding' Syria loot

BBC - Fri, 2015-06-05 01:42
The British Museum is guarding a precious artefact that was looted from Syria, in the hope of returning it when the country is stable.

Bid to sue duke over Da Vinci theft

BBC - Fri, 2015-06-05 01:31
A man cleared of conspiracy and extortion charges over a stolen Leonardo Da Vinci masterpiece begins a bid to sue the Duke of Buccleuch for £4.25m.

Malala suspects 'secretly acquitted'

BBC - Fri, 2015-06-05 01:27
Eight of the 10 men reportedly jailed for the attempted assassination of Pakistani schoolgirl Malala Yousafzai were actually acquitted, it emerges.

Offer to meet Tawel Fan families

BBC - Fri, 2015-06-05 01:27
The families of patients who suffered "institutional abuse" at a mental health ward in Denbighshire will have a chance to meet the health minister.

51 firefighters at recycling blaze

BBC - Fri, 2015-06-05 01:21
Nearby buildings are being evacuated as firefighters tackle a large blaze at a Bridgend industrial estate.

'Female Viagra' nears US approval

BBC - Fri, 2015-06-05 01:20
A US government panel recommends approval for a drug treating low female libido, providing patients are warned of possible strong side effects.

Court backs France over right to die

BBC - Fri, 2015-06-05 01:18
European Court of Human Rights allows France to take paralysed man off life support in case which divided family.

More than 1,000 complain about BGT

BBC - Fri, 2015-06-05 01:13
Ofcom says it has received 1,043 complaints about the stunt double dog used in the talent show final

Shane Williams joins Collins tributes

BBC - Fri, 2015-06-05 01:11
Wales star Shane Williams joins tributes to ex-All Black and former Ospreys team-mate Jerry Collins, who has died in a car crash.

Disability benefit delay 'unlawful'

BBC - Fri, 2015-06-05 01:10
A delay in paying welfare benefits to two disabled people was "unlawful" and "unacceptable", the High Court rules.

How the two-liter soda is a relic of change

Marketplace - American Public Media - Fri, 2015-06-05 01:07
$10

That's about how much Apple's new streaming music service will reportedly cost for unlimited music. The two-tiered service is likely to be announced next week. We took a closer look at what Apple might have to offer in comparison to other options in an already overly crowded music streaming market.

$488 million

That's how much the Red Cross raised for aid in Haiti following a devastating earthquake in 2010, more than any other aid organization. The Red Cross pledged to build hundreds of homes and says it's helped millions of Hatians with that money, but NPR and ProPublica's continuing investigation found that most of these claims were murky and unsubstantiated. In fact, some communities have reportedly received little or none of the promised aid.

17 percent

Summer is upon us, which means many teenagers will be looking for jobs. The good news is that teen unemployment is down to around 17 percent;  in 2009, it had soared to 27.2 percent. But experts point to other economic challenges getting in the way of young Americans and that summer gig.

3

That's how many countries don't use the metric system: Liberia, Myanmar and the U.S. There have been some changes here, but they haven't moved past the beverage aisle. The hope was that recognizable, accessible measurements like a two-liter soda would ease the transition, but somewhere along the line things stalled.

18-6

That's the vote by the Food and Drug Administration approving flibanserin. Think of it as "Viagra for women." As the New York Times reports, the vote followed an intense lobbying campaign that accused the FDA of gender bias when considering drugs that treat sexual performance.

How the 2-liter soda is a relic of change

Marketplace - American Public Media - Fri, 2015-06-05 01:07

$10

That's about how much Apple's new streaming music service will reportedly cost for unlimited music. The two-tiered service is likely to be announced next week. We took a closer look at what Apple might have to offer in comparison to other options in an already overly crowded music streaming market.

$488 million

That's how much the Red Cross raised for aid in Haiti following a devastating earthquake in 2010, more than any other aid organization. The Red Cross pledged to build hundreds of homes and says it's helped millions of Hatians with that money, but NPR and ProPublica's continuing investigation found that most of these claims were murky and unsubstantiated. In fact, some communities have reportedly received little or none of the promised aid.

17 percent

Summer is upon us, which means many teenagers will be looking for jobs. The good news is that teen unemployment is down to around 17 percent;  in 2009, it had soared to 27.2 percent. But experts point to other economic challenges getting in the way of young Americans and that summer gig.

3

That's how many countries don't use the metric system: Liberia, Myanmar and the U.S. There have been some changes here, but they haven't moved past the beverage aisle. The hope was that recognizable, accessible measurements like a two-liter soda would ease the transition, but somewhere along the line things stalled.

18-6

That's the vote by the Food and Drug Administration approving flibanserin. Think of it as "Viagra for women." As the New York Times reports, the vote followed an intense lobbying campaign that accused the FDA of gender bias when considering drugs that treat sexual performance.

12 lambs drown fleeing dog attack

BBC - Fri, 2015-06-05 01:04
A dog attack in Denbighshire which left three sheep and 21 lambs dead is described as "horrific" by police.

Galway: Paisley Sr 'not a man of God'

BBC - Fri, 2015-06-05 01:04
Celebrated flautist Sir James Galway launches an attack on former DUP leader Ian Paisley Sr, saying he was indirectly "responsible" for killings in Northern Ireland.

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