Apple, Spotify Streaming War Heats Up
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Upon launching in late June, Apple Music was supposed to take over the streaming-music business and save musicians everywhere. Thanks to a three-month free trial period and Apple's marketing power and prolific advertisements, including a TV commercial co-starring Mary J. Blige, Kerry Washington and Taraji P. Henson, the service racked up a respectable 11 million users. But after the first wave of free subscriptions expired in late September, and with top rival Spotify ramping up its own features to maintain its 20 million paid-subscriber base, it's unclear whether even Apple can sustain this momentum.
"All I can tell you is it's going really well," Jimmy Iovine, who founded Beats Music with Dr. Dre, tells Rolling Stone. "By anyone's measures." Iovine sold his company to the technology giant last year for $3 billion, then joined the company as an Apple Music executive.
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Record executives are optimistic, too. "Let's say by the end of the year, they've got 15 million subscribers, which is probably a realistic number. That means in a matter of months, they've gotten to half of Spotify's [paid] subscription base and that took Spotify eight years to get to," says a source at a major label. "I don't know how you shit on that."
Still, some have been harshly critical of Apple Music's features — it's packed with expert playlists, curated radio stations, an always-live radio channel called Beats 1 and an artist-created service called Connect, but many of these are hard to find compared to, say, Spotify's more intuitive interface.
Larry Kenswil, a former Universal Music digital executive who is now an entertainment attorney, doesn't see any particular streaming service having better features than any other. "You have curated playlists, as opposed to playlists put together by a computer or by friends — it's unclear yet which of these things people gravitate towards," he says. "One service doesn't stand out as being superior."
As for Apple Music's strong subscription numbers — which dwarf Tidal's recently announced 1 million — Kenswil says it's because the service is packaged with iPhone and iPad software updates: "They updated iTunes mandatorily, in a way that forced people to use it. It wasn't much to get them to use it. No other service has had that advantage."
Iovine favorably compares Apple Music, which costs $10 per month after the free trial, to Spotify's freemium model, which allows users to stream any song for free if they listen to ads. Spotify has paid $3 billion to rightsholders, but Iovine argues Apple's $10-a-month model is more fair to artists.
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