Decline of iTunes reach pushes Apple to Compete With Spotify in the Online Music Streaming niche at only $10 per month.
With an 8% slump in download revenue and only a 45% rise in subscription profits Spotify and YouTube have been eating Apple alive. To reverse the continuous drop of iTunes sales, Apple would release a new music streaming service similar to Spotify at the Worldwide Developers Conference (WWDC) on June 8, 2015.
The Wall Street Journal upheld that the move is also driven by pride more than profit. Apple's renaissance age was propelled by the iPod and iTunes, and the brand leader want to maintain dominance in this arena.
"For Apple, retaining leadership in music means a lot more compared to dollars and cents. It is about maintaining a legacy that dates spine to the company's resurgence under former chief executive and co-founder Steve Jobs," WSJ tech journalists Ethan Smith and Daisuke Wakabayash said.
Apple's brand new music streaming service wouldn't have advertisements like Spotify, explaining the relatively higher rate it plans to charge the users: $10 per month. It would make some songs available for free, but most of the albums and singles would have to be paid for. Because of this, users who download $10 albums might choose to subscribe to the streaming service instead, as it gives them unlimited access to an unlimited compilation of songs.
To get ahead of the competition, the tech innovation leader aims to also enhance its open, ad-sponsored radio streaming service by launching new channels that are run by real DJs, such as Drake.
Apple is on equal grounds with Spotify: Apple has over 85% total number of sales in its niche, while Spotify has over 86%. However, it looks like Apple would be cannibalizing its existing structure to keep its supremacy by leveraging its comprehensive network of subscribers whose credit cards tied up with iTunes, and its strong partnerships with music companies.
