Owen WilliamsFormer TNW employee
Owen was a reporter for TNW based in Amsterdam, now a full-time freelance writer and consultant helping technology companies make their word Owen was a reporter for TNW based in Amsterdam, now a full-time freelance writer and consultant helping technology companies make their words friendlier. In his spare time he codes, writes newsletters and cycles around the city.
Apple’s new Music service will debut for everyone on June 30 and while it’s still early days, it means that Spotify, Rdio and other streaming services could be in for a big shock.
The service has a huge advantage that many more labels than existing services will be onboard at launch, but there’s two big things that Apple has up its sleeve: it can get its service in front of people and won’t offer an eternal free plan.
Spotify, which launched in 2006, has 60 million active users, with only 15 percent of them on a paid plan. That’s far too low for the company to turn a profit any time soon.
Despite plenty of users and a huge lead, Spotify’s growth has historically been slow. It’s hard to make people aware of a service, let alone convince them to pay you money.
The never-ending free tier on Spotify further hinders the service’s ability to convert users from free to paid and puts off artists, who don’t want their music to be given away effectively for free.
People don’t mind a few advertisements mixed in with their music, so there’s no real reason to convert, unless they want offline support. It doesn’t give them enough reason to upgrade, or a consequence for not doing it.
Apple’s Music service provides enough of an incentive to get users in the door and addicted — you’ve got three months of unfettered access to try it — and it’ll be automatically installed on every single iPhone and iPad.
It should also make artists and labels happy too, because while there is a free trial, it doesn’t last forever and doesn’t diminish the value of their music.
Those labels could, in theory, start pulling their music from services that do offer free tiers if Apple gets enough traction in the coming months, further hurting competitors.
That’s hundreds of millions of users that’ll see Apple Music when they update their phone later this month, without the need to convince them to go and install a new app. It’ll just be there, in front of them.
That alone could obliterate the sales of competitors in the streaming business in a matter of months. Apple has the ability to get hundreds of millions of users to try its new service when it launches, with very little effort, which is something Spotify could only dream of.
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