Yet another Apple service declared D.O.A., epic fail, you name it, by AI techie wannabes and experts that somehow succeeded in spite of their dour declarations. Apple Music joins an exclusive club of D.O.A. or failed products and services as predicted by our resident “Apple has lost its way” crowd.
Apple Watch Apple TV Apple Music iTunes Macbook (w/single USB-C port) ...
Don't forget about Apple iPad Pro. It seems to become the biggest failure among iPads ~
Note that the iPhone itself was going to be Apple's BIGGEST FAILURE - as announced by Steve Ballmer, Microsoft's then CEO.
I love it and I plan to let it roll over to paid when the trial expires. There's so much music that I wanted but didn't want to pay for and now I can listen to it for basically free, as $9.99 isn't that much.
I have the family plan at $15.00. I love it since I can play different music simultaneously in different rooms of the house, on my iPhones and iPads. I don't have to turn off music on one device before turning it on on another device.
At 10 million users, Apple Music is generating $1.5 BILLION a year in revenue. With iTunes Music at $4.5 BILLLION a year that means Apple generates $4.2 BILLION of the worldwide music industry's yearly revenue. This means Apple already generates 30% of the music industry's revenue. And it is growing fast!
Your assumption is entirely based on that everyone will keep the subscription all the time. However, the real situation is that somebody will quit, and someone join. It is NOT a static. This means the number can go up and also can go down. Be smart about what you are speculating.
I am a paid subscriber and I love it. Apple have ironed out a lot of the early bugs with the service and I don't really have any complaints about it anymore.
One suggestion for any Apple staff who are reading this is to put a bit more emphasis on social sharing of playlists. I don't personally need it (as I don't care what other people are listening to, LOL!) but friends who are still using Spotify constantly cite this as a reason for them staying with Spot.
I do. Absolutely horrible. My guess would be the UI has something to do with Johnny Iovine's thinking, he constant whine about the music discovery problem and the question of the next song.
To be honest I am not sure if 80%+ of the music listener actually care about it.
Apple music on iTunes Desktop is also pretty bad, mostly due to the WebObject and web layout in iTunes, downloading a song requires a refresh of screen.
There is still lot of songs missing, especially in the SE Asia region.
Isn't lightning port only capable of outputting 48kHz @ 24 bit? If that is true then how will it leverage 96 kHz sampling rate that apple is working on?
The Lightning port on the new IPad Pro and the coming iPhone 7 are compatible with USB 3.0 so it will be easy to output the higher sampling rate.
Additionally it can output 3D music i.e. Dolby 7.1 or THX sound from compatible headphones such as from Sennheiser.
So the move to lightning port headphones means Apple is gunning for even higher sound standards that cannot be done using the standard headphone jack. Consumers are going to be even more pleased with the experience. And it will be a great reason to upgrade. Audiophiles will flock to the iPhone.
These changes will likely not make a lick of difference to audiophiles. We're talking about people with their own equipment and portable DACs/Amplifiers to attach to any phone they want. (My FiiO Q1 works with my Nexus 6P and has hi-res 24bit/96khz built into the device). Not that 24bit hi-res actually makes any discernible difference to the human ear. It's simply a marketing gimmick unless Apple does more with their new standard and the music being mastered for it.
Your comment about consumers being pleased should be correct. Apple has basically outsourced the dac/amping to music vendors and third parties, and that's not bad. Most headphone makers can generally do a better job putting their own in their headphones. Unfortunately they will label their headphones his-res Apple certified and inflate the prices of their products because of their DAC/AMP and marketing mumbo jumbo.
It's still a win for music in general though. As long as Apple bundles in earbuds that support these changes and have better sound than their current Earpods.
Yet another Apple service declared D.O.A., epic fail, you name it, by AI techie wannabes and experts that somehow succeeded in spite of their dour declarations. Apple Music joins an exclusive club of D.O.A. or failed products and services as predicted by our resident “Apple has lost its way” crowd.
Apple Watch Apple TV Apple Music iTunes Macbook (w/single USB-C port) ...
Don't forget about Apple iPad Pro. It seems to become the biggest failure among iPads ~
The original Ipod was also declared dead in 2002.... Oh man... What did Apple do... ;-)
I am a paid subscriber and I love it. Apple have ironed out a lot of the early bugs with the service and I don't really have any complaints about it anymore.
One suggestion for any Apple staff who are reading this is to put a bit more emphasis on social sharing of playlists. I don't personally need it (as I don't care what other people are listening to, LOL!) but friends who are still using Spotify constantly cite this as a reason for them staying with Spot.
No, I think it is fashionable to bash iTunes around certain Apple centric sites and that has now carried over to being fashionable to bash the UI on Apple Music. YMMV, but I don't have a problem using it. Seems pretty simple to me.
Music is actually a very complex service. Apple is combining streaming, listening to your own collection, radio, music discovery, links to buying music from the iTunes Store, and social media. It is difficult to do all of this in a simplified 6" user interface.
But Apple is continuously improving the service. Since it is cloud based, improvements at the server level are experienced instantaneously by everyone.
so far once you get use to the current UI, it is not bad at all. Yes it can improve but that will be done gradually over time.
Hi James, great post. I think you have described my experience in a nutshell, much more eloquently in fac than my own earlier post. Cheers.
My only issue with Apple Music UI is how it resets every time I jump from my Bluetooth headset to my car and then to my headphones; too smart for its own good. The "for you" screen doesn't do much for me and I don't care for that default. Small gripe, otherwise it's amazing. The shared playlists are a nice social tool, not a main selling point though for me. I've used Spotify and Pandora on multiple devices and for whatever reason always came back to my iTunes Match (at the time). The UI was confusing and inconsistent between devices and the stations were mediocre. Apple Music took it to the next level with the all-you-eat model. Like an earlier post mentions, all those songs Apple catalogues you would have never bought are right there. I've found so much music, forgotten artists from my past as well as new ones. I would cancel cable before I dropped AM.
What's more, is that their streaming business model is actually sustainable.
Curious about this. Outwardly it differs very little from Spotify. In fact Spotify can arguably be more expensive. What makes it sustainable?
There are 70-75 million people using Spotify... but only 20-25 million pay for it. The rest is supposed to be funded by advertising.
But ads simply don't cover all the free customers.
Spotify has to PAY fractions of a cent for EVERY song played... whether it's a free user or a paid customer. And the more free customers they get.... the more Spotify has to pay. It doesn't scale well. In short... the free customers are basically killing them.
Spotify could be getting up to $250 million a month in revenue from 25 million paid subscribers at $10 a month. But not all subscribers pay $10... students can pay $5 a month and there are probably lots of $0.99 three-month trials. So their revenue is less than $250 million a month.
That would probably be sustainable on its own... if it wasn't for the 50 million free customers.
Spotify still has to pay license fees for all those free customers. They're paying music license fees for 75 million users' streams even though they're only getting paid for 25 million. (plus whatever the ad revenue is)
There have always been more free Spotify users than paid customers... and Spotify hasn't make a profit in 8 years. I'm not sure what the proper free/paid customer mix would be... as I don't know their expenses. But as of right now... it's clear that the free customers aren't helping.
On the other hand... Apple Music is all paid customers. Apple pays music license fees for 10 million users' streams... but they're also getting revenue from 10 million users. And when Apple Music gains new customers... they also get new revenue.
Granted... some of those are part of a family plan... so the revenue per Apple Music user might be as low as $1.67 per month. But Apple is still being paid something.
Worst case... if all of Apple Music's users were family plan members at $1.67 a month... that's $16,700,000 a month in revenue. Best case... $100,000,000 a month in revenue. It's somewhere between the two... likely leaning more towards the latter.
So how much does Apple pay per month in music licensing fees for 10 million users? I would hope it's less than their revenue. Knowing Apple... they probably wouldn't even enter this market if they couldn't make money at it. Or at least break even. But we don't know for sure.
However... Spotify has always paid more in music license fees than they get from revenue.
Spotify is essentially paying people to use their service.
That is not sustainable.
And while Apple offers a free 3-month free trial... in which Apple pays license fees with no return in revenue... I don't think it affects Apple Music's operational sustainability. Apple will let you listen for free... but only for a short time. The hope is that you'll become a paying customer. If you don't... Apple doesn't have to pay for you anymore.
But as long as Spotify has a free tier... it will hurt their sustainability.
From ny reading that Spotify pays out ~70% of their revenue. Regardless of free or paid streaming.
apple music might be a better deal for artists then, but the economics must be just largely be the same if Apple are holding on to the "traditional" 30% take we often hear bandied about.
That is, largely the same for Apple as it would be for Spotify. The artists is a different question.
I was very excited with Apple Music and I signed up. I am still signed up but am slowly loosing my patience. My biggest flaws are:
- Very confused UI... - Very hard to find new music I would like. "For you" just doesn't get me any good suggestions, to find good mixed playlists is all but possible... - I can create a smart playlist where it keeps all my liked songs. And these are somehow not synced/shared between my devices. WTF?!? - Radio seems to play same tunes a lot. - iCloud music library messed up everything.
Apple music of course has full of other small usability flaws that sometimes just makes you crazy. I wish Apple did not rush to release this. They have released an "alpha" version of something that is just not polished... If they don't fix major flaws, especially UI soon, I will leave Apple Music for something else. Only now I realise how happy I was with my "offline" iTunes Library.
But there are some good features as well and the catalogue is massive...
I think the app mirrors the presentation at WWDC. The presentation was a hot mess and that's what we got with the app. Honestly I wish Apple would have made a simple streaming music app that seamlessly integrated with iTunes and iTunes Match. Why doesn't the music app have a buy button that allows you to purchase a song or album either right from Apple Muisc or by redirecting you to the iTunes app? I think Apple should get rid of connect. Artists and users don't need another place to have to go to get content. Pretty much everyone is using Facebook or Twitter or Instagram or Snapchat. Nobody wants to have to use another social media platform. I would get rid of the Beats radio crap too but my guess is that's not going anywhere.
Wrong. I have Apple music and it is by far the best service of its type. Its not difficult to use at all. After a couple of days its as easy as pie. People like you dont realize how hard it is to make a UI that does everything Apple music does.
but go ahead and keep crying like a little baby instead of taking a few days learning the UI.
and with 10 million paid users in 6 months it pretty much proves you are wrong at all accounts. If the UI is as crappy as you said, no way would Apple Music every crush every single streaming record on the books.
I use Apple Music nearly every day. I still think there are many aspects of it that are a mess and even though I didn't specifically mention the UI in my post plenty of people have complained about it. Btw, that 10M figure didn't come from Apple. Apple PR refused to comment on the story. It's possible the biggest reason for Apple Music's success is the power of defaults. Also the reason I didn't go back to Spotify is Apple Music syncs with my Watch. If Spotify had the ability to sync playlists with Watch I might never have left.
It isn't the Lightning port itself that has the limitation, as it uses USB 2, which can easily go to 24/192. It's the converters inside that only do 24/48. But these converters only use the analog port. It's likely that this is a software situation that Apple needs to rectify.
The Lightning Port on the iPad Pro is compatible with USB 3.0. And it can output digital music to compatible headphones. Currently the existing Lightning compatible headphones cost $800+. The lightning port doesn't need to convert to analog. It outputs pure digital data. It is the headphone or external DAC that converts the data to analog. This is the huge advantage Apple will have by abandoning the analog port and going Lightning for headphones.
I know all about it. But you're still not completely correct. The regular lightning port can handle anything that USB 2 can, which is easily 24/192. You're mistaking g the ability of the port with the software and other internal electronics.
Phillips has lightning headphones for $350. There will be cheaper ones soon. I never said that the lightning port converts to analog. In fact, I said the opposite.
Oops! I got the price wrong. Those headphones are $299 on amazon.
Curious about this. Outwardly it differs very little from Spotify. In fact Spotify can arguably be more expensive. What makes it sustainable?
There are 70-75 million people using Spotify... but only 20-25 million pay for it. The rest is supposed to be funded by advertising.
But ads simply don't cover all the free customers.
Spotify has to PAY fractions of a cent for EVERY song played... whether it's a free user or a paid customer. And the more free customers they get.... the more Spotify has to pay. It doesn't scale well. In short... the free customers are basically killing them.
Spotify could be getting up to $250 million a month in revenue from 25 million paid subscribers at $10 a month. But not all subscribers pay $10... students can pay $5 a month and there are probably lots of $0.99 three-month trials. So their revenue is less than $250 million a month.
That would probably be sustainable on its own... if it wasn't for the 50 million free customers.
Spotify still has to pay license fees for all those free customers. They're paying music license fees for 75 million users' streams even though they're only getting paid for 25 million. (plus whatever the ad revenue is)
There have always been more free Spotify users than paid customers... and Spotify hasn't make a profit in 8 years. I'm not sure what the proper free/paid customer mix would be... as I don't know their expenses. But as of right now... it's clear that the free customers aren't helping.
On the other hand... Apple Music is all paid customers. Apple pays music license fees for 10 million users' streams... but they're also getting revenue from 10 million users. And when Apple Music gains new customers... they also get new revenue.
Granted... some of those are part of a family plan... so the revenue per Apple Music user might be as low as $1.67 per month. But Apple is still being paid something.
Worst case... if all of Apple Music's users were family plan members at $1.67 a month... that's $16,700,000 a month in revenue. Best case... $100,000,000 a month in revenue. It's somewhere between the two... likely leaning more towards the latter.
So how much does Apple pay per month in music licensing fees for 10 million users? I would hope it's less than their revenue. Knowing Apple... they probably wouldn't even enter this market if they couldn't make money at it. Or at least break even. But we don't know for sure.
However... Spotify has always paid more in music license fees than they get from revenue.
Spotify is essentially paying people to use their service.
That is not sustainable.
And while Apple offers a free 3-month free trial... in which Apple pays license fees with no return in revenue... I don't think it affects Apple Music's operational sustainability. Apple will let you listen for free... but only for a short time. The hope is that you'll become a paying customer. If you don't... Apple doesn't have to pay for you anymore.
But as long as Spotify has a free tier... it will hurt their sustainability.
Both spotify and Pandora had sales of about $1.3 billion each in 2014, the year for which the last full numbers are available. Both lost about $200 million. While sales were up, losses quadrupled. Spotify, at the end of 2014 had 15 million subscribers, and about 45 million free listeners. Subscriptions made up about 92% of their sales, and advertising the other 8%. I know the numbers don't seem to add up, but they are from spotify's own financial statements.
the problem is that $9.95 a month doesn't cover the expenses. Between royalty payments, marketing costs, and the cost to run the business, they lose money. And with the ill advised attempt to cut these royalty costs in a lawsuit, the result was that their payments just went up instead. Apple already agreed to pay somewhat more with the original agreement to not pay for the three month free trial period, which did became a payment period for artists as well, though Apple agreed to continue the higher payments.
Apple can afford this because it's a means to an end, which is to sell highly profitable hardware, in very large numbers. But Spotify and Pandora have no such corporate parent that can shrug off losses in this business.
no music streaming service has ever made a profit, and most have shut down, or been bough by a much bigger company, which in most cases eventually shut it down. Even Samsung and Sony failed at this. We may see Amazon, Apple and Alphabet succeed, because they don't care about the costs. Possibly Microsoft as well. Who else? It's hard to tell. I'm not sanguine about the chances for an independent Spotify and Pandora over the long term.
Comments
Note that the iPhone itself was going to be Apple's BIGGEST FAILURE - as announced by Steve Ballmer, Microsoft's then CEO.
I have the family plan at $15.00. I love it since I can play different music simultaneously in different rooms of the house, on my iPhones and iPads. I don't have to turn off music on one device before turning it on on another device.
Your assumption is entirely based on that everyone will keep the subscription all the time. However, the real situation is that somebody will quit, and someone join. It is NOT a static. This means the number can go up and also can go down. Be smart about what you are speculating.
To be honest I am not sure if 80%+ of the music listener actually care about it.
Apple music on iTunes Desktop is also pretty bad, mostly due to the WebObject and web layout in iTunes, downloading a song requires a refresh of screen.
There is still lot of songs missing, especially in the SE Asia region.
Your comment about consumers being pleased should be correct. Apple has basically outsourced the dac/amping to music vendors and third parties, and that's not bad. Most headphone makers can generally do a better job putting their own in their headphones. Unfortunately they will label their headphones his-res Apple certified and inflate the prices of their products because of their DAC/AMP and marketing mumbo jumbo.
It's still a win for music in general though. As long as Apple bundles in earbuds that support these changes and have better sound than their current Earpods.
No, I think it is fashionable to bash iTunes around certain Apple centric sites and that has now carried over to being fashionable to bash the UI on Apple Music.
YMMV, but I don't have a problem using it. Seems pretty simple to me.
Perhaps I am just used to it now? I don't know.
I think you have described my experience in a nutshell, much more eloquently in fac than my own earlier post. Cheers.
But ads simply don't cover all the free customers.
Spotify has to PAY fractions of a cent for EVERY song played... whether it's a free user or a paid customer. And the more free customers they get.... the more Spotify has to pay. It doesn't scale well. In short... the free customers are basically killing them.
Spotify could be getting up to $250 million a month in revenue from 25 million paid subscribers at $10 a month. But not all subscribers pay $10... students can pay $5 a month and there are probably lots of $0.99 three-month trials. So their revenue is less than $250 million a month.
That would probably be sustainable on its own... if it wasn't for the 50 million free customers.
Spotify still has to pay license fees for all those free customers. They're paying music license fees for 75 million users' streams even though they're only getting paid for 25 million. (plus whatever the ad revenue is)
There have always been more free Spotify users than paid customers... and Spotify hasn't make a profit in 8 years. I'm not sure what the proper free/paid customer mix would be... as I don't know their expenses. But as of right now... it's clear that the free customers aren't helping.
On the other hand... Apple Music is all paid customers. Apple pays music license fees for 10 million users' streams... but they're also getting revenue from 10 million users. And when Apple Music gains new customers... they also get new revenue.
Granted... some of those are part of a family plan... so the revenue per Apple Music user might be as low as $1.67 per month. But Apple is still being paid something.
Worst case... if all of Apple Music's users were family plan members at $1.67 a month... that's $16,700,000 a month in revenue. Best case... $100,000,000 a month in revenue. It's somewhere between the two... likely leaning more towards the latter.
So how much does Apple pay per month in music licensing fees for 10 million users? I would hope it's less than their revenue. Knowing Apple... they probably wouldn't even enter this market if they couldn't make money at it. Or at least break even. But we don't know for sure.
However... Spotify has always paid more in music license fees than they get from revenue.
Spotify is essentially paying people to use their service.
That is not sustainable.
And while Apple offers a free 3-month free trial... in which Apple pays license fees with no return in revenue... I don't think it affects Apple Music's operational sustainability. Apple will let you listen for free... but only for a short time. The hope is that you'll become a paying customer. If you don't... Apple doesn't have to pay for you anymore.
But as long as Spotify has a free tier... it will hurt their sustainability.
From ny reading that Spotify pays out ~70% of their revenue. Regardless of free or paid streaming.
apple music might be a better deal for artists then, but the economics must be just largely
be the same if Apple are holding on to the "traditional" 30% take we often hear bandied about.
That is, largely the same for Apple as it would be for Spotify. The artists is a different question.
- Very confused UI...
- Very hard to find new music I would like. "For you" just doesn't get me any good suggestions, to find good mixed playlists is all but possible...
- I can create a smart playlist where it keeps all my liked songs. And these are somehow not synced/shared between my devices. WTF?!?
- Radio seems to play same tunes a lot.
- iCloud music library messed up everything.
Apple music of course has full of other small usability flaws that sometimes just makes you crazy. I wish Apple did not rush to release this. They have released an "alpha" version of something that is just not polished... If they don't fix major flaws, especially UI soon, I will leave Apple Music for something else. Only now I realise how happy I was with my "offline" iTunes Library.
But there are some good features as well and the catalogue is massive...
Phillips has lightning headphones for $350. There will be cheaper ones soon. I never said that the lightning port converts to analog. In fact, I said the opposite.
Oops! I got the price wrong. Those headphones are $299 on amazon.
Both spotify and Pandora had sales of about $1.3 billion each in 2014, the year for which the last full numbers are available. Both lost about $200 million. While sales were up, losses quadrupled. Spotify, at the end of 2014 had 15 million subscribers, and about 45 million free listeners. Subscriptions made up about 92% of their sales, and advertising the other 8%. I know the numbers don't seem to add up, but they are from spotify's own financial statements.
the problem is that $9.95 a month doesn't cover the expenses. Between royalty payments, marketing costs, and the cost to run the business, they lose money. And with the ill advised attempt to cut these royalty costs in a lawsuit, the result was that their payments just went up instead. Apple already agreed to pay somewhat more with the original agreement to not pay for the three month free trial period, which did became a payment period for artists as well, though Apple agreed to continue the higher payments.
Apple can afford this because it's a means to an end, which is to sell highly profitable hardware, in very large numbers. But Spotify and Pandora have no such corporate parent that can shrug off losses in this business.
no music streaming service has ever made a profit, and most have shut down, or been bough by a much bigger company, which in most cases eventually shut it down. Even Samsung and Sony failed at this. We may see Amazon, Apple and Alphabet succeed, because they don't care about the costs. Possibly Microsoft as well. Who else? It's hard to tell. I'm not sanguine about the chances for an independent Spotify and Pandora over the long term.