Apple will launch its streaming service Apple Music June 30th.
Although there was not anything mind-boggling with the launch, it will dramatically shake up the music streaming service landscape. Below I am answering all the questions that you are thinking about the launch, because I can:
Will Apple Music be bigger than Spotify?
Yes.
In terms of paying customers, Apple Music does not offer free version, which is probably a wise move. Currently paying customers create 26 more times the revenue compared to free customers in Spotify.
Spotify has 70 million users (of 20 million are paying). Apple has over 800 million iTunes accounts. Do the math. Just converting 2,5% of the current user base (of which not all are naturally downloading music) gets them even.
However it might not be as easy or as profitable it would seem at first glance.
Paying for streaming music is a niche activity. Only 5% of the people over 13 years old pay for streaming services. During the digital download heyday, 25% of the people were regularly paying to download music and astonishing 80% of people were regularly buying cd´s when that was popular. Those days will never come back.
Optimist would say that there is an opportunity to increase the amount of subscribers. Pessimist would say that we will never reach a level again where even 25% are paying for music. My thinking is somewhere in between: there is opportunity to increase the paying streaming category but it requires cheaper options than the current default 9.99$/month. In terms of people paying for music streaming services are the best bet for record labels, because ownership of music seems quite expired concept in 2015.
Because of its ecosystem and deeper pockets, Apple has better opportunity to grow the category if it is to grow. Free streaming services will remain in the mix, because too aggressive clampdown for free streaming would probably retort people back to pirating the music. Also those who pay for music are not necessarily the tastemakers of what is hip and cool. In 2015 the investment to music is not necessarily an indication of its popularity.
Is Apple music then a better service than Spotify?
No.
At least based on the current information.
In terms of library they are in parity (30 million songs both, no Beatles in either of them). The main features Apple was talking about were nice-to-haves, but nothing that would immediately make people to switch. Beats 1 is essentially just a tradtional radio. Curation from tastemakers is something that sounds nice in powerpoint, but masses don´t really care. Same thing with Connect, music fandom is way more niche activity than non-committal music consumption on background.
Will people flood from Spotify to use Apple music?
Well, it depends.
If you are invested in Apple ecosystem and have been buying from iTunes music before, that is likely to happen. Over half of the Spotify users are also using iTunes. If you do not have that legacy, you are not likely to switch from Spotify unless Apple manages to bully its way with labels to worsen the current Spotify.
Why?
We are lazy.
Brands often mistake the laziness of users for loyalty. It is natural for people to try to avoid stressful situations and change (even how big or small) is always stressful.
It is hard to unlearn your habits, whether they are good or bad (especially the bad ones). It is also hard to learn new habits even how beneficial they would be to you. Therefore just making things easy-to-use is not enough for people to make a switch. They need incentives and motivation: the right balance of stick & carrot. People keep using hard-to-use methods (like pirating) because that is the way they have accustomed themselves and cost of learning something new feels too hard.
In many ways both Spotify and Apple will benefit from the laziness of their users.
Current Spotify paying users will not flood to Apple. Those who are using the free ad-fueled version are different target audience altogether, so Spotify will also be growing in terms of overall users. If you are Spotify free user and have not turned to paid version with Spotify, it is quite unlikely that you will start paying with Apple. On the other hand, testing the Apple Music will be just a click away and it works seamlessly with your iTunes library. So those people who have been postponing moving to streaming services and have still been paying for digital music downloads, don´t have that many excuses anymore.
And to answer the question posed on the title of this: no, I will not switch to Apple Music. On the other hand, majority of my investment in music still goes to vinyl records. Like said before, old habits die hard.
Stand-Up Strategy 