The Music Wars Begin Again
If you are old enough to rent a car, then you probably remember when a little thing called iTunes first came onto the scene in 2001. If you are anything like this author, you thought it was a silly idea because you just knew you wanted to have that full Linkin Park album and its case on your bookshelf until the day you died.
Clearly a lot of us were wrong about a lot of things.
Today, you are hard pressed to find anyone that doesn’t have an iTunes account. It has become so universal that South Park has even made satire it. In their latest earnings call, Tim Cook reported that there are over 800 million iTunes accounts.
However, as the monolith that is iTunes and Apple chugged away at our wallets .99 cents at a time, a small startup called Spotify was slowly gaining momentum after its founding in 2008. Spotify, if you are unfamiliar, is a music streaming service based on the freemium model. This means that you can listen to music for free so long as you listen to advertisements occasionally (the “free “option) and if you pay a monthly fee you can listen add free (the premium option). To date, Spotify is valued at over 8 billion dollars and has 70 million users.
On Monday June 8th, Apple announced that they would be entering into the music streaming market with the cleverly titled Apple Music app. Apple’s model only touts the monthly subscription but is banking on their brand, marketing and artist/DJ offerings to help them close the gap between them an Spotify.
In response to their announcement made Monday, Spotify has reportedly raised over half a billion dollars from investors in order to maintain their lead in the market. Apple Music is set to be released at the end of the month in 100 markets.
Do you think Spotify’s lead will help them maintain their dominance, or will Apple’s marketing be able to close the distance?
