Tuesday, October 20, 2015

Apple Music Singing Its Success

The three month free trial for Apple Music is ending for many early adopters and it is now time to pay the piper.  And according to Apple, 6.5 million subscribers have converted to the paid streaming model with another 6 million still under the free period.  Of course, once consumers see the bill appear on their credit card bill, they may have second thoughts.  But if they decide to remain committed to Apple Music, at about $10 a month, Apple would see a nice revenue lift of over $700 million dollars a year.  Should Apple capture more of those trial users, that number could continue to rise.

Still, it is hard to call this new streaming business a success.  With Pandora, Rdio, and Spotify still leading in users, and Tidal pushing too, Apple has a long way to go to turn this Music business into a leader.  Apple Music's options include adding an ad supported version as well as packaging it with its release with the new Apple TV box.  Bundling has worked in the past with cable and may just make sense with this model too. 

Can Apple Music become a leader?  That may depend on how aggressive they are with the business, whether they compete with pricing packages, modeling, or even through the acquisition of a rival.  And given the deep pockets and free cash that Apple has, it can take any route.  For this moment, adding $6.5 million dollars a month from Apple Music may be chump change, but it doesn't hurt either. 

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