Consumer Electronics

Can Apple Music Prevail Over Pandora, Sirius XM and Spotify?

apple-music-
Apple Inc.
Tuesday morning, Apple Inc. (NASDAQ: AAPL) officially launches its Apple Music streaming service with Taylor Swift’s album “1989” among the first day offerings, now that Apple has agreed to pay rights owners for songs played during the service’s free trial period. No word on exactly how much Apple plans to pay, and that doesn’t even matter to Taylor Swift; it was the principle of the thing. Right?

Okay, so what else is in store for Tuesday’s launch? Apple Music will integrate with the Apple Match program that allows subscribers to upload up to 25,000 songs they already own to the iCloud service, then match the songs with streaming licenses, and allow them to be streamed to Apple Music. The limit on the number of songs customers can upload is expected to rise to 100,000 when the new iOS 9 operating system is released later this year.

The other big change coming Tuesday is a release of iOS 8.4 with support for Apple Music built in to the operating system. The updated release will debut an hour earlier than the Music Beats 1 service, Apple’s 24-hour-a-day-seven-days-a-week streaming radio station, which will be free to everyone who has an Apple ID.

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Apple is taking on both Pandora Media Inc. (NYSE: P) with its streaming radio stations, and privately held Spotify with its streaming music service. And do not forget Sirius XM Holdings Inc. (NASDAQ: SIRI), which claimed over 27 million U.S. subscribers in the first quarter of 2015. Spotify counts 20 million paying subscribers worldwide as of mid-June, with 75 million active users, and Pandora’s active user count is around 85 million.

The big difference between the two is that Spotify provides on-demand listening while Pandora streams radio stations based on preset criteria. If you want to listen to nothing but Led Zeppelin all day, stick with Spotify. If you want a premixed radio stream based on the band, but including tunes from, say, the Rolling Stones, Pandora does the work for you. Pandora’s music library is much smaller than Spotify’s though, so if you only want to hear country blues from the 1930s or by the Mississippi Sheiks, Spotify has been the choice.

Apple Music offers both worlds: a vast music library like Spotify’s, with Taylor Swift tossed in for good measure, and Beats 1, so far Apple’s only curated radio station. Apple’s big advantages are its vast audience and huge cash pile: the company has the credit card numbers of some 800 million iTunes users worldwide and a bank balance of nearly $200 billion to use to promote the Beats business that it has already paid $3 billion for.

Apple’s brand power will encourage a lot of users to try the service. But they will only stay if it is worth the $10 a month it will cost after the free trial period expires.

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