Let's put it this way:
At $120 a year Apple Music will be utilized by no more than 3% of the iTunes userbase. If they can figure out a way to lower the price they might be able to double or triple that. Either way, it's a single-digit opportunity, not really something Apple likes to cater to. Jobs stopped development on the fractional iPad because the Phone was the bigger market. Cook is chasing pennies with this one.
BJ
First off, given the rise in streaming, I doubt your numbers are going to hold for very long. Second, you're missing a rather obvious point: Apple Music is not a standalone product. It's designed to get people into Apple's ecosys
There is nothing fundamentally new about Apple Music. There is no 'wow' feature that is gamechanging. It's iterative. It's just a new delivery model. This isn't like the first time someone saw Color TV, the first time someone experienced Cable TV, the first time someone flew on a jet aircraft, the first time someone picked up an iPhone. This is a yawn.
I have a great idea for this thread though. Let's shift gears and discuss what's really bothering most people when you take the finances out of it. We say "its too expensive", you say "its a great value". Let's move past that:
What happens when you want to hear Prince and take his work offline and you find out you can't?
What happens when you are fed a customized Southern Folk Singer-Songwriter Essentials playlist and it has no Neil Young on it?
What happens when Jay-Z launches his new LP on Tidal and forces Apple Music listeners to wait six months to get it?
What happens when Sony Music launches its own streaming service in 2025 and all your Billy Joel songs are pulled from Apple Music and all your personal playlists after being there for a decade?
What happens when the Beatles decide to create their own network in their own app called Beatles Music and charge just for that?
What happens when Apple Music increases their rates to $20 a month?
What happens when you have to curtail your Apple Music experience because its racking up $20+ in data overages?
What happens when all this fragmentation plaguing the streaming market finds its way into the iTunes Music Store and destroys the brilliant one-stop-shop that it is now?
The cost isn't the real issue. It's the renting. It's being held hostage. It's the lack of control.
BJ
I noticed you ignored the rest of my post. Typical. Let's face it, streaming IS trending upwards, and physical sales/downloads are declining. That's the long and the short of it. So many of your assumptions are based on streaming being a blip in the marketplace. I'm telling you--it's not going to be a blip.
As for your other concerns, they are valid. But here's the thing. It's important to remember why streaming even came about. It was to combat piracy. If the services get too fragmented, too expensive, too meager in their offerings, people will go back to pirating. Right now, the reason streaming is a good deal for consumers and the record companies (artists not as much) is that it's so cheap (relative to the amount of money the same amount of music would cost you if you bought album by album or track by track) and so convenient that even pirates who have TB of music on their hard drives are hard pressed not to use it. In terms of recouping lost profits, streaming is the best bet for record companies right now.
Now, you will have some holdouts. Some big name players like Taylor Swift can play hardball. Some legends like Prince and Neil Young can hold their music hostage (and I should point out, Mr. "Free Music Is All Around Us", Prince has fought very hard for years to keep copies of his music off the internet, and even covers of his music, including that bastion of music discovery, YouTube). But ultimately, those are outliers. Taylor Swift is SO huge that people will buy her music--right now. If her sales begin to dip, prepare to see her music on every streaming service from here to Timbuktu. Neil Young and Prince are set, they don't need the meager revenue generated by streaming services. Neil Young is also trying to push hi-res downloads and his Pono player, so he has a vested interest in making streaming less desirable. That is a battle he is going to lose. Prince just hates his music being available outside of record stores for some reason, but he's Prince and he gets what he wants.
The Beatles are the big holdout at this point, again a band so beloved that people will continue to buy their music until the sun explodes. Also an outlier.
Most of the big names are available on streaming services, and it's in their interest to keep it that way. It's in the interest of record companies to keep streaming services broadly available and with the most music possible. The harder they become to use, the less content they have, the more pirating, not purchasing, will rise. The record companies know this. They're afraid of it. Afraid to death of it.
That being said, I agree with you about control. Of course the record companies want more control. All the media conglomerates want more control now that their man source of revenue--content--has been turned into digital bits that can be copied perfectly by anyone with a standard laptop. That's why we've seen the proliferation of DRM, and Netflix, and music streaming. But that doesn't mean that Netflix isn't a good value, or that streaming music isn't a good value. It's not a good value for long term storage of all the music you want to own, and I would never recommend someone use streaming exclusively without ever purchasing any music. But like with Netflix, you can use music streaming to listen to anything that catches your fancy, and then buy the few albums you really love or aren't available on the service. Netflix has tons of movies I'd like to watch, but I only need to own a subset of them because I love them so much that I know the ability to watch them whenever I want, wherever I want, and have a physical copy of it in case the license expires on Netflix or my internet goes out or whatever.
Same with music. I don't need to own every ABBA album, their greatest hits is fine (The Visitors is also worth owning, actually). But maybe I want to listen to more than what I can find on the greatest hits. Good luck getting that on the radio. But you know what I can do? Subscribe to AM or Spotify or Deezer or Rdio for $9.99 a month, listen to every ABBA album ever made, get my fill, maybe also listen to some Kanye, some Paul McCartney, some War on Drugs, Tame Impala, David Bowie, and Deerhoof. And maybe I'll hear something I didn't know before, and think it might be worth buying. Or maybe, after three listens in a month, I'm done and don't need to buy it. But you can't say I didn't get my money's worth if a single one of those albums cost $9.99 or more on iTunes.
