Three Signs Apple is Serious about Disrupting Music Retailing
By now it’s old news that Apple plans to disrupt retail payment with its Apple Pay platform. However, lost in the hoopla surrounding Apple Pay was an interesting announcement that Apple is also working on a new interactive, piracy-proof digital music service that it hopes will bring consumers back to purchasing whole albums, as well as individual songs.
If Apple actually delivers on the promises made about this service, currently scheduled for release in early 2016, then it will disrupt music retailing in a very positive way. Here are three signs Apple is serious about disrupting music retailing.
Apple Beats the Competition
Apple bought Beats, purveyor of the high-grade Beats Music streaming service as well as Beats Electronics premium audio hardware, for $3 billion in May 2014. Although Apple is denying rumors it plans to shut down Beats Music, the fact remains Apple now owns and can eliminate the biggest potential competitor to its new service. Beats Music also has some operating features said to have intrigued Apple, such as the ability to convert free trial customers to paid subscribers.
Whatever happens to Beats Music, a $3 billion investment speaks volumes about Apple’s intention to own the future of the music retailing market. It’s hard to imagine Apple spending that much money to ensure it can continue the status quo.
You, Too Probably Like U2
Apple spent $100 million for exclusive distribution rights to the new digital album from legendary Irish rockers U2, who are also heavily involved in the development of the new Apple music service. While U2 are the most important rock band of the past 30 years, they are no longer at their commercial peak. The $100 million investment seems a bit steep just to take advantage of U2’s marketing clout, but makes more sense if it also includes access to U2’s professional knowledge of audio technology and music industry connections and influence. And even that investment doesn’t make a lot of sense unless Apple wants to do something groundbreaking.
Apple Does Cool Stuff
Let’s face it – Apple has a long history of doing cool stuff that disrupts the consumer marketplace. A lot of people forget that Apple is responsible for the computer mouse. More recently, Apple invented the consumer tablet market with the iPad and created the modern smartphone template with the iPhone. Also remember that Apple already disrupted music retailing in the early 2000s with the iPod and iTunes digital download service, which gave consumers a reason to at least consider buying, as opposed to illegally downloading, digital music in the post-CD era.
Thus Apple has established itself as a company willing and capable of using technology to disrupt how people use technology in their everyday lives, including as a mechanism for buying and consuming products. Music remains an extremely popular product, but it has become harder than ever to make money via retail music sales. Will Apple provide the technology to disrupt this new paradigm? The smart money will bet on yes.