Category Archives: Apple Music

Apple Music survey results

Related: Apple topic page, all Apple Music posts.

The three-month anniversary of the launch of Apple Music passed at the end of September, which means many of the early trial users have been faced with the decision of whether to become paying customers or to cancel the service. As such, I though it was a good time to run some surveys to ascertain who’s using Apple Music, why, and how. The full results of the two surveys I ran in early October, along with detailed methodologies, can be found in a new Jackdaw Research report, which you can download for free here.

In this post, I’m going to focus on just one of the two surveys (which was run through the MicroHero survey app), and specifically address several theories I had put forward in an April Techpinions column. Those theories were:

  1. Apple’s service, like all other paid music, would be most popular among older demographic segments
  2. Discovery would be an important element of the service, and as such those who thought discovery was important would likely gravitate toward the service in higher numbers than those who didn’t
  3. The integration of users’ owned music libraries was likely to be a key feature too, and as such Apple Music would do well among people who valued this feature.

The MicroHero survey had 500 respondents, which is good for a margin of error of about 4 percentage points, but I’m not claiming that the specific percentages I’ll share below are necessarily representative of the general population. As such, you should focus on the trends and patterns shown below rather than the specific percentages.

 Age patterns

With regard to the age breakdown, there were two interesting findings: younger users were more likely to have tried Apple Music than older users, but older users were more likely to have become paying customers when their trials ended. The charts below illustrate these two findings:MicroHero trial signup by ageFirst off, as you can see, the older users were, the less likely they were to have tried Apple Music – rates were about twice as high for the youngest age group as for the oldest, with some ups and downs in-between. This shouldn’t be surprising, as younger users are typically more tech-savvy, more aware of new trends, are bigger users of music streaming services in general, and so on.

However, when looking at those who did trial Apple Music, older users were far more likely than younger users to have converted their trials to paid subscriptions:MicroHero sub status by ageAs you can see, the percentages here are virtually reversed, with the under 35 age group canceling at roughly the same rate as the 35+ age group became paying subscribers. Again, this shouldn’t be too surprising, even though it’s a reversal of the age pattern for trials. Older listeners have always spent more on music than younger listeners, who tend to have less disposable income and more time on their hands, often giving them a higher tolerance for the disadvantages associated with free music (whether bootleg concert tapes, recording songs off the radio, or listening to music with frequent ad interruptions, depending on the era).

The importance of discovery

One of the early questions in both surveys asked respondents to rank various features of music streaming services in order of importance. Discovering new music wasn’t the top-rated feature, but for those respondents that did rank discovery as highly important, the rate of conversion to paid Apple Music subscriptions was higher than the average. The chart below shows how this group compared to the overall base of respondents on their conversion to paid subscriptions:MicroHero Discovery conversionAs you can see, the rate of conversion for those who prioritized discovery was similar to the rate of conversion for the 35+ age group we saw above, and significantly higher than the average. This is a great validation of Apple’s strategy to promote discovery as an important feature of Apple Music, which seems to have paid off well.

Owned music integration less important than expected

Conversely, users who said the integration of their own music into a music service was very important didn’t appear to favor paid subscriptions at a different rate from the rest of the respondents, contrary to my theory from April. However, when I asked respondents who had decided to become paid subscribers why they did so, integration of their own music was something over 50% of them said was a significant factor. Below are the results for this question from the second survey, which was run through Qualtrics:Qualtrics features likedAs you can see, two other features actually ranked higher than the integration of owned music – the integration of Apple Music within iOS (through features such as Siri), and discovering new music. As such, my hunch that owned music integration would be important was borne out somewhat, but not as strongly as my theories about age and discovery.

These and quite a few other findings are outlined in more detail in the report, which features 23 charts in total, relating not just to Apple Music in particular but music consumption habits in general. Again, you can download the report for free here.

How I’m using Apple Music

Related: Apple topic page, all Apple Music posts.

On the day Apple Music launched, I wrote a first-day “review” of sorts, based on my first few hours with the service. Now that several months have passed (and I’m about to cross over from the three-month free trial to being a paying customer), I thought I’d revisit my thoughts on the service, and talk through how I’m actually using it today.

I’m not listening to Beats 1

As I mentioned in the first day review, I didn’t feel like Beats 1 was for me, and nothing has really changed in that respect. The reality is that I haven’t regularly listened to normal linear radio since I was a teenager, when I used to listen to it as I got ready for my day in the morning. Over the last 15 years or so, I’ve essentially listened just to the music I want to, rather than allowing my listening to be driven by others. I’ve dabbled with Pandora from time to time, but with that and other services I’ve generally found that they take too much training to be useful, or simply don’t have a high enough percentage of music I like to be worth the time. Beats 1 falls into the latter category – my tastes in music continue to be too narrow/specific for what Beats 1 offers. Apparently, many others love it, but not me.

“For You” has become much more useful

The “For You” tab is the place where you’re supposed to find things that are relevant to you and your tastes. When I first started using Apple Music, I found this tab to be somewhat lacking – the playlists and albums recommended either felt random or too literally connected to albums I already owned or tastes I’d explicitly specified. The recommendations were either things I already knew I liked, or they were too out there. But since that time, the recommendations seem to have got better, as I’ve tried quite a few of the playlists out, and I’m liking more of what’s recommended.

“Add to my music” is the key

To my mind, the most important feature of Apple Music is the “Add to my music” button (often just a little plus sign, and where that isn’t present, as a menu item behind the three little dots). As someone who still listens to a lot of the music I own, I like the idea of adding to that library far better than having to recreate my library from scratch, or simply search every time I want to listen to something. As such, the Add to my music option in Apple Music is a perfect fit.

However, I’m not just using it as a “permanently add this to my collection of music” button, but rather as a way to quickly bookmark something for later listening. For example, when I browse through that For You tab, and a playlist or album looks interesting and worth checking out, I add it to my music, even though I haven’t listened to it yet and might not get to it for a while. But everything I add in this way shows up in the Recently Added section on all my various devices, and as such the next time I’m listening to music it’ll be right there. If I like it, then it stays in my library, but if I don’t, it’s simple to remove it again. My music library has grown quite a bit this way over the past few months, and especially as the For You recommendations have been getting better.

Playlists are useful in several ways

I find playlists very useful, and they’re a key part of how I’m using Apple Music. But I’m using them in a few different ways. First off, Apple Music suggests various playlists in For You, some of which look interesting enough to add. In some cases, the playlist itself is good enough that I just keep that in my library as something to listen to again. But in other cases, I only like one or a handful of songs in the playlist, and in that case I typically click through on the song or artist and start playing more of their songs and albums, often adding those to my library while deleting the original playlist. I might also check what other playlists those songs or those artists are part of, and add those to my library. This is often a good way to find similar music and/or artists, as is the Related Artists section.

The other thing I’m really enjoying is the “Intro to…” playlists Apple Music has for many artists. These are almost like a new take on the Greatest Hits albums many artists throw out after they’ve produced enough albums, but they’re not quite that straightforward – they often combine well-known songs with other more obscure ones. And then there’s often the option of a second, “Deep Cuts” playlist for the artist if you want to go deeper. Using these playlists, I’ve rediscovered (rather than discovered for the first time) artists from my past and especially my childhood, and in the process introduced a number of them to my kids too.

Things I wish were better

Although I’m using Apple Music a lot, there are still things I wish were better. For one, I wish the Music app on my iPhone would give me more information about artists and albums than it does, more in line with the desktop version of iTunes. I typically use the desktop version to discover new music and add it to my collection, but I do a lot of my listening on my phone. Sometimes I want to learn more about an album or an artist, and it’s either unintuitive how to get that information to display in the app, or impossible to get it to display at all. I quite like the artist descriptions and album reviews Apple has always provided in iTunes and now in Apple Music, but these can be hard to get to or missing entirely in the mobile app. (Artist descriptions are available if you click on artist names enough times, even though there’s no visual indicator that this will happen, while album descriptions are totally missing as far as I can tell.)

My other main complaint is that Apple Music doesn’t seem to deal with caching and streaming all that well, especially on weaker cellular connections. Sometimes, when I’m in the car, if I skip too quickly through songs in a playlist or album that I haven’t downloaded to my phone, things just seem to get stuck – the song is ostensibly playing, with the progress indicator and time still moving, but no audio is heard. I imagine this is just a bug, but for a service which now majors on streaming, it needs to be fixed.

Apple Music probably isn’t for everyone

As I mentioned in that first-day review, Apple Music is a great fit for me – the combination of my own library and new music I discover through the service is just what I’ve always wanted from a subscription music service. But the more I talk to people in real life and online through Twitter and Facebook and so on, the more I realize it’s not a great fit for everyone. Obviously, there’s a substantial number of people who simply don’t listen to that much music, who aren’t a good fit for any music service. But I’m talking about people who do care about music. Unless you care a great deal about mixing your library and new music, there’s not a huge amount in Apple Music to convince you to switch from another service. In fact, if you’ve made a heavy investment of time in another service, switching can seem daunting – Apple Music doesn’t offer a way to import playlists from Spotify, for example, which could dramatically smooth the way for switchers. But there also aren’t that many unique features that would draw you over from another service. And unless you’re buying one or more albums a month at the moment, there may not be that strong a reason to start paying for a subscription music service either. Beats 1 – one of the most unique aspects of Apple Music – is free to anyone, and many of the other features are relatively undifferentiated from other services.

Apple at this point has two fundamental problems with Apple Music – relatively few people have even tried the service (something I wrote about here for Techpinions Insiders), and of those who have, there’s anecdotal and survey evidence that many are turning off the auto-renewal and allowing their subscriptions to lapse before they become paying customers. So far, I’m not seeing a great deal of action from Apple that would meaningfully change either of these things, for all the value I’m getting out of the service personally.

Friction is the Problem with Apple Music, not Complexity

Note from Jan Dawson: I’m honored and grateful to announce that Aaron Miller, my co-host on the Beyond Devices Podcast, will be authoring some posts on the Beyond Devices blog going forward as well. This is the first of what I hope will become a series of posts over time. These posts will have a slightly different tone from the rest of the blog, and will be educational in nature, and frequently tied to research concepts – a concession to Aaron’s day job as a business school professor. To reflect that, these posts will be tagged “Studying Apple“. For more about Aaron, check out the About the Authors page.

Walt Mossberg and others seem to love Apple’s new Music service, but Mossberg’s (and others like David Pogue’s) complaint has been that the applications delivering it are too complex. The criticism applies to both Music on iOS and iTunes on the computer. There is a lot going on in Apple Music; there’s no denying it.

Complexity isn’t the problem, though. Friction is. You might call it a semantic difference, but if you do you’re missing out on an essential aspect of everything human beings make. It’s worth understanding the difference between something that’s complex and something that’s frictional.

User Interface Friction

These three points explain something called User Interface Friction (UIF):

  1. Attention is a scarce resource. Mental effort falls under a concept known as executive function. Simplified, executive function describes the many ways we focus our attention on things. We have a limited store of attention. We can only pay attention to a few things at a time. We can also use up our attention, our ability to focus. Time and rest restore it.
  2. Friction is wasted energy (and wasted attention). Although physical friction has its uses, in most situations friction is wasted energy. It’s a great analogy for users’ attention and software. All of your attention spent on an app should help toward your goal. Wasted attention is User Interface Friction. As excellently described in this article from Coding Horror, low UIF is a goal but some UIF is inevitable.
  3. UIF is affected by both users and the interface. Just like physical friction is a measure of how two surfaces interact, UIF is a measure of how users and interfaces interact. And as app interfaces can be metaphorically “smooth” or “bumpy”, users can also be smooth (expert) or bumpy (novice). Expert users can handle bumpier interfaces, because they’ve learned how to use them.

Obviously, software designers should try to minimize UIF as much as possible. Low friction makes an app more useful and more enjoyable, even if it’s something boring like a banking app. Software designers can even measure cognitive load while users interact with the app, and pinpoint where attention is overspent. (Here’s a 2006 article [PDF] describing ways to measure cognitive load for testing website usability. The Sternberg Memory Test is especially easy to use.) The idea is that if users have to overspend attention to accomplish something, then the interface needs improvement.

I’m not a user interface expert, so I can’t go very deep into the principles of good UI design that have developed over the years. (This Quora discussion is a good place to start.) But I know when I’m experiencing friction. A lot of the time it’s from bad design, but not always.

Some apps are necessarily “bumpy” because of how much they do. Final Cut Pro, for example, is a massively complex video editing application. It does things editors could only dream about a few decades ago. Because of this complexity, Final Cut Pro relies on expert users to reduce UIF. (This is part of the reason Final Cut X, a huge interface revamp, was so controversial.) To be sure, Apple shouldn’t waste editors attention, but it has the benefit of editors knowing how Final Cut Pro works.

Any app, no matter how bad, can be learned with time. That means we can become experts in poorly designed interfaces if we just stick with them. Lazy or poor app designers demand more expertise from users than necessary. Users generally abandon an app if the expertise cost is too high for them.

Apple Music and Friction

Generally, Apple users are not computing experts. That’s not an insult. It’s just the reality of having hundreds of millions of users. Apple’s success fundamentally comes from its ability to make low friction interfaces for very useful products.

Like any company, Apple runs into problems when its novice users are presented with complex products. This encounter puts Apple’s design chops to the test. But some things are just too complex to simplify for novices, and Apple requires users to develop some expertise.

There’s a lot of depth and complexity to Apple Music. Consider all that it does:

  1. Integrates a streaming music library with your owned music library.
  2. Helps you purchase music to make it part of your owned library.
  3. Provides extensive music recommendations—through curated playlists and suggested artists—based on your (complex) tastes.
  4. Brings new music to your attention, organized by multiple criteria.
  5. Plays multiple radio stations.
  6. Gives you a way to organize streaming and owned music in playlists.
  7. Allows you to search for music by multiple criteria.
  8. Gives you control over the play order of the music you’re listening to.
  9. Connects artists and fans, giving artists a way to share their work and lives through multiple media.

This list gets dramatically longer in the case of iTunes on the computer, because it includes movies, TV shows, podcasts, iTunes U, audiobooks, iOS apps, even more radio, and ringtones, along with all the different aspects of organizing, using, and purchasing those things. And let’s not forget all the device syncing, with multiple generations of iPods, iPhones, iPads, and even legacy MP3 players.

How do you keep all of that simple? I’m not convinced you can. Siri commands help some, but don’t get you all the way there. In the end, even the venerable Apple can only get the interface to a certain level of smoothness.

That doesn’t mean we should excuse Apple for bad UI design. iTunes 12 was a big change that introduced a lot of friction. (The money quote for our purposes: “But for now, iTunes 12’s most basic operation—finding and playing media—requires a lot more thought than it should” [emphasis added].)

So what has Apple decided to do with its Music apps? It apparently expects us to develop some expertise. Walt Mossberg and everyone else complaining about the friction in Apple Music also seem to love the value it provides. Apple designers, intentionally or not, are banking on our willingness to stick with it and get better at it.

That doesn’t mean we can’t complain about the friction, though. For me, the worst offender is the mysterious ellipsis button. (Who knows what combination of commands it reveals every time I tap on it? It’s like the UI equivalent of a slot machine.) Over time, we can all hope that Apple reduces the friction for its fundamentally complex Music service. In the end, making complex things frictionless is how Apple pays the bills.

Apple’s evolving PR strategy

This week on the Beyond Devices podcast (embedded below), we talked among other things about Apple’s evolving PR strategy, using the lens of the Apple Music launch as a way to illustrate how things have changed. I thought I’d do a quick write-up of that segment here too.

The old model

Under Steve Jobs and PR chief Katie Cotton (who retired from Apple last year), Apple’s PR strategy focused on two key components: tightly stage-managed events and announcements, and occasional “leaks” to favored publications, almost always off the record and quoted as being from unnamed sources. Executives did very few on the record interviews, and the media generally were given relatively little access to Apple behind the scenes for on the record stories.

The new model

With Steve Jobs’ passing and Katie Cotton’s retirement, we’re now in the Tim Cook / Steve Dowling era (Dowling was finally announced as the permanent head of PR after an interim period with no formal head of the department), and things are starting to change. The company seems looser and more open, with more access to executives, more communication on the record through other publications, and also more openness to new channels like Twitter.

Apple Music launch as the lens

I think Apple Music is a great lens for looking at all this, because it’s a good example of how some of these new approaches are coming into play. The launch is perhaps best thought of in phases (most of them likely planned, one certainly not):

  • WWDC keynote – the formal announcement
  • WWDC interviews – a range of interviews with publications at or right after WWDC
  • Taylor Swift – the blog post from Swift and the rapid response from Apple, which included more interviews
  • Blog posts and tweets from Apple personnel
  • The New York Times profile on Zane Lowe the week before launch
  • Reviews and interviews released the day of the launch
  • Post-launch activities.


The WWDC keynote has been done to death elsewhere, so I won’t focus on that – it felt rushed and a bit unpolished, especially at the end, when the topic was Apple Music. But Apple provided access to Eddy Cue and Jimmy Iovine right after the keynote to a half-dozen publications, and these interviews focused on Apple Music, allowing Apple to provide more messaging and positioning around Apple Music and Beats 1 in particular. There were few new details here, except perhaps for some information about sponsorships on Beats 1, but there was a clear set of messages from the execs: Apple Music was about providing a service, not a utility, Beats 1 was about a human-driven experience in contrast to the algorithmic approaches of others, and wouldn’t be driven by market research but by gut feel, and Apple Music wasn’t about stealing subscribers from competitors but about growing paid streaming. Those messages didn’t necessarily come through as strongly in the keynote, but they came through very clearly in these interviews, about half of which were with music rather than tech publications (more on this later).

Taylor Swift

We covered the Taylor Swift incident in last week’s podcast, but the key things here were:

  • Apple responded incredibly quickly – on a Sunday, no less
  • The first official response came via Eddy Cue’s Twitter account, not an Apple press release – the first time Apple has broken news via the medium
  • Eddy Cue also made himself available for several interviews with publications on Sunday and Monday, to explain his / Apple’s reasoning and again provide messaging and positioning around the actions.

This highlights several of the changes we’re seeing in Apple’s PR strategy – rapid response, the use of Twitter as a medium, and the availability of executives for on the record interviews, used to provide more nuanced messaging and positioning around news. All of these are new – recall “antennagate” and the Apple Maps launch and how it took Apple to respond to those issues, for example.

Twitter and blog posts

Those tweets from Eddy Cue, though, haven’t been the only uses of the medium for breaking news about Apple Music. Zane Lowe has used Twitter throughout the buildup to the launch to tease things and break smaller bits of news, including the announcement of his Eminem interview. Pharrell Williams announced the exclusive debut of his song Freedom on Apple Music through Twitter as well.

Perhaps the most surprising thing (though I suspect it wasn’t an intentional thing on behalf of Apple PR) was the blog post written by Apple employee Ian Rogers, which was posted on June 27th, and announced specific times for the release of iOS 8.4 and the launch of Beats 1. Those times were subsequently scrubbed from the post, but  the very fact Rogers felt free to blog about the launch in this way is yet another sign of the increasing openness at Apple.

More broadly, I’ve very much enjoyed the broader use of Twitter by key executives at Apple – not so much for making announcements, but simply for sharing what they’re up to, making themselves visible on this social medium, and in the case of Eddy Cue even responding to some technical questions from other Twitter users this week.

New York Times profile

The New York Times ran a lengthy profile of Beats 1 lead DJ Zane Lowe on January 28th, and it was a good example of the new on the record pieces we’ve seen in recent months, in the same vein as the Stephen Fry and New Yorker profiles on Jony Ive. It was pretty unsanitized, and began with an apparently frustrating experience for Zane Lowe working with the equipment in his new studio (something which was weirdly echoed in the hour of Beats 1 programming before the official launch). But it also broke a lot of details for the first time about the other Beats 1 hosts and DJs, including Pharrell, Drake, Elton John, St Vincent, Josh Homme, Disclosure, and Dr Dre. This use by Apple of a publication like the Times to break this kind of news is again something of a departure – oftentimes these details in the past would have been leaked to such a publication from “sources with knowledge of the situation”, but this is the new, on the record, Apple.

Reviews and interviews around the launch

The last major phase of the Apple Music launch was the launch itself, for which Apple provided devices running previews of Apple Music the day before, and also provided yet more access to executives like Eddy Cue and Jimmy Iovine, and Trent Reznor. The reviews were nothing new (though the last-minute nature suggests a dash to the finish line rather than a new precedent for reviews), but the interviews were, though very much in keeping with the pattern we’ve already seen above. These interviews again hit many of the same points around positioning and messaging, and allowed Apple to put its spin and story around the launch rather than letting others do it for them. Many of the interviews were published in verbatim question-and-answer formats, allowing the executives to speak for themselves.

What next?

Even after the launch, we’ve seen a continuation of some of the same themes – Zane Lowe is still teasing new stuff on Twitter, Billboard did a profile on hip-hop artists and DJ Q-Tip about the show he’ll be doing for Beats 1 (among other things), and there’s a sense that many of the other themes will continue too.

But even beyond the launch of Apple Music, it feels like we’ve seen several elements of Apple’s new PR strategy here which will stick around for the future. The increased use of Twitter, the on-the-record interviews with executives, the communication with non-tech publications (music ones for the Apple Music launch but also fashion and jewelry publications for the Apple Watch), and so on feel like they will likely all be part of Apple’s PR strategy going forward. Tim Cook famously spoke about doubling down on secrecy a while back, so it’s not like Apple is going to suddenly spill the beans about everything as it happens. We’ll still see tightly stage-managed events to announce the big news, but it also feels like Apple is more willing to be open and to truly communicate about what it’s doing, which has to be credited in large part to Tim Cook, who’s made a number of subtle changes at the company since taking over.

Apple Music first day review

Since Apple broke its usual rule of giving reviewers plenty of time to review its new products with the Apple Music launch, giving reviewers just a single day to review the service, I thought I’d break my own rule and do a review of my own based on my first day with the service.

Exactly the app I wanted

First off, the new Music app is just the app I’d wanted and hoped that Apple would eventually launch. I’ve always wanted to just be able to combine the music I already have in iTunes with new music I add from subscription services, but that’s always meant two apps in the past. Now it’s a single app, and Apple made this work just the way it should – “My Music” now means the combination of my library and the stuff I’ve added from the subscription service, seamlessly together in one place. I love this aspect of the service, and it immediately puts it head and shoulders above any other service by itself. The app itself is quick, responsive, not too glitchy (with some exceptions in the iPad version, in my experience today), and I found the layout perfectly logical and easy to follow. I’m increasingly convinced that reviewers calling Apple’s recent products and services “complicated” really mean that they’re very feature rich for v1 products, which I don’t see as a bad thing. By the same token, the iPhone is complicated, but I don’t think anyone calls it that.

As a result of all this, we’ll be discontinuing our other music services more or less immediately, once we’ve recreated a small number of playlists of favorite songs in Apple Music, something I largely completed today, which was very straightforward. I opted for the family plan on Apple Music, which means I’m finally headed for my first experience with Family Sharing. I haven’t heard great things about it from others who’ve worked with it, so I’m approaching this with a bit of trepidation, but hoping it works out OK.

Beats 1 is not for me – at least for now

One of the things I’ve been most interested in ahead of time was Beats 1, and exactly how it would work. We finally have a decent sense of the lineup, and today we got our first taste of Zane Lowe and his unique DJing style. I listened to Beats 1 for the first half hour or so, but found the genre-hopping jarring. Within those first 30 minutes, Zane Lowe played a bewildering mix of old and new material, genres as diverse as metal, rap, and pop, and it just reminded me why I’ve largely stopped listening to the radio in a world with digital music. My tastes in music are at the same time eclectic (I like many genres) and narrow (I tend to like just a few artists within each genre), which makes me a tough customer for this kind of thing (more on this later). I just didn’t like 90% of what I heard on Beats 1, and it gave me a headache. It also felt like Apple was working a bit too hard to promote its exclusives (Pharrell, Taylor Swift, AC/DC etc) and the service itself and Zane Lowe wasn’t free enough to be himself, so I hope that changes as the service goes on.

For You and personalized curation is better

I found the For You section and the personalized curation much more effective in my case, though I found my initial experience with the interest selection as frustrating as I had on Beats (which largely supplied the experience). The jiggling circles from which you choose first genres and then specific artists are fun visually but somewhat annoying to use in practice – as you choose items, they tend to crowd out other options that appear, and you end up choosing a variety of things that you kind of like because they’re the best options available, but they then make it harder to choose others. I think the best description for the genre I listen to most frequently is probably “singer-songwriter” but it’s not even in that initial list of genres, and many of my favorite artists never came up. As such, what I’ve told Apple Music I like is a weird mix of my second and third favorites rather than a true list of artists I really like.

Having said that, once I put a bit more work into this effort, selecting more of those artists with several taps of the “more artists” button, the recommendations For You provided started to get better. I’ve found several tracks I quite like that way already. As such, I think I’ll like this more personalized form of curation more enjoyable than the  generic stuff in Beats 1.


Absence of desktop iTunes was bizarre

The weirdest thing about the launch was the things that went wrong – the total absence of updated versions of iTunes for hours after iOS 8.4 became available being the most obvious thing. This meant that the social sharing elements didn’t work at all on devices other than iPhones, with lots of broken links and error messages. It was a bizarre omission and I can only think Apple did it to avoid overloading its servers or something. But it took the shine of the service for anyone who doesn’t own an iPhone or wasn’t able to update their software today for whatever reason. The other odd thing was the hour of music and other stuff Beats 1 played before its official debut at 9am ET, which included Zane Lowe testing his mic and chatting with people in his studio, which was an awkward reminder of the stuff in the New York Times piece about how his equipment wasn’t working in the studio when the reporters were there. Everything seemed to be working fine when the show finally started, but it was another element that seemed to lack polish.

Connect looks really promising

One element I know there’s been a lot of skepticism about is Connect, which is reminiscent of Ping for many people. However, I think this is one of the areas of greatest promise, and one of several things that has the potential to set the service apart from competitors. The content there today is fairly limited, though it’s an interesting mix of polished video, candid snapshots and half-finished material, and even tweet-like text content. The content has lots of shares and quite a few comments, many of them welcoming both the service and their favorite artists’ engagement with it, which bodes well. But we need to see a lot more content from a lot more artists on a regular basis for this to work, so that’s something we’ll have to keep an eye on. As a social platform, though, it already looks vastly better than Ping.

A good start with some polish needed

Although I felt that the lack of polish and the glaring absence of the new version of iTunes detracted from the launch, the app itself is fantastic, and I’m totally sold on it. It’ll easily replace my existing options and do it much better than they ever could, and that’s really what this needs to be. Apple should easily win converts from Spotify with the service, but the bigger question remains whether it can make new customers for paid music streaming. After three months of using this service for free, I suspect many users will find it tough to give up, and that’s another major element in what I think will ultimately be a successful launch. Of course, that also means we won’t see any real positive sign of Apple Music in Apple’s financials until it reports earnings in January 2016 (since the first trial users won’t convert until the very end of September or early October). Ironically, what we may well see before then is a sharper drop off in the already falling music sales on iTunes, so the first impact may be negative rather than positive, especially as Apple is now paying out royalties during the free trials.

Apple Music’s other financial advantage

This is something I’ve though about quite a bit, and even wrote about briefly as part of a much longer piece ahead of the launch of Apple Music, but I feel like no-one is really talking about. But it’s potentially quite significant for the economics of Apple Music, and especially the per-stream payout rate Apple will end up passing on to labels and artists. Note: it’s already clear that Apple will have a higher per-stream payout simply based on the fact that it’s a paid-only service, whereas Spotify and other large services mix paid and free users. But I’m talking about an additional impact on top of that.

Integration of owned music is the key

The big factor here is Apple’s integration of the music you already own and store in iTunes into the Apple Music experience and into a single app. I think that’s huge for usability, and that was the key point in that earlier piece, but I think it could also be quite significant for the economics of the service. Why is that? Well, with almost any other subscription streaming service, you as the user tend to start from scratch in terms of your existing library. Perhaps you hop back and forth between apps when you play the music you own versus the music you’re streaming, but I’d guess many people just stick to a single app and play all their music from there, even the stuff they may have purchased somewhere along the way, because it’s all available in the streaming service and it’s easier to play it there than switch apps. Services like Spotify will pay out to artists regardless of whether the user already owns the track somewhere else (unless the user has imported their owned music). But when the user’s owned music is also available in the app, Apple won’t have to pay out when the user plays that music.

What’s really hard to know here is the balance between owned versus streamed music the average user plays during the course of a typical month. I know my own usage is heavily skewed towards the music I own and am familiar with, along with a few tracks or albums I don’t own and stream instead. Perhaps others are different, but I’d guess almost all users would spend a significant amount of time playing music they already own. With other services, the provider still has to pay out on this music because it all looks the same, but with Apple Music there will be a clear line between the music the subscriber owns and the music he or she is streaming through the service (even if it’s presented together in the context of the app). If the amount that’s played from the library rather than streamed is significant, this could substantially reduce the number of plays for which payments need to be made.

A higher per-stream rate on Apple Music

At this point, it’s worth thinking about how the economics of streaming music work. Although we often see per-stream rates used in discussions of how much artists get paid through these services, the reality is that there are no set per-stream rates. Rather, these services share some proportion of their overall revenue from subscribers and/or advertisers with those labels and artists whose music their subscribers listen to. The total pot is divided up with labels and artists according to a standard formula, and I’ve pasted the graphic Spotify uses to illustrate this formula below:


Once you understand that it’s a matter of dividing up the total pot, it becomes very relevant how many songs are streamed and therefore get to share in that pot. If Apple Music has fewer songs streamed through the service (because a significant proportion are played instead from users’ libraries), that in turn could dramatically increase the per-stream payout for those artists whose music is streamed. That will likely disproportionately benefit new artists and music over older artists and albums, which could be particularly good for those discovered through the service.

Of course, over time, this advantage will be mitigated as the balance between owned and streamed music shifts towards streamed music, as people will likely buy far less music (if any) going forward. But as the first Apple Music subscribers get past their trial periods and Apple starts paying out on its long-term formula, this could result in significantly higher payments per stream than other services. Add this to the existing advantage Apple has over competing services because of the paid-only nature of the service. Over time, that could have a really interesting impact on artists’ willingness to continue to work with other services. If, as an artist, you’re getting paid several times more on Apple Music per stream than on Spotify, Rdio, or Deezer, would you eventually consider pulling at least some of your music from those other services?

Note: I’m making a fundamental assumption here, which is that Apple will only pay out on plays of music the user doesn’t play from his or her own library. That seems a reasonable assumption, but I haven’t confirmed it. I can’t see why Apple would pay out on that music (unless it’s played through iTunes Match, which shares 70% with artists too), but it’s a remote possibility that it will, in which case the argument falls apart. 

Apple & Beats

In what must be an enormously frustrating development for Apple PR, rumors of Apple acquiring Beats for around $3.2 billion broke last night on the Financial Times website. I say frustrating, because if there’s one company that likes to control the message on a new announcement, it’s Apple. And it’s so hard to evaluate this deal without all the details – to my mind, we’re missing three crucial bits of information (besides official confirmation that a deal has been done): the actual price, and the currency (i.e. cash, stock etc), Beats’ financials (helping to know whether the valuation is reasonable) and the strategic rationale. The rumor is that the price is $3.2 billion, but there are no details on the currency. There have been rumors about Beats’ financials, but nothing official from the company itself. And it’s the last point – the strategic rationale – that has everyone scratching their heads.

I don’t have any inside information on any of these three questions, but I thought I’d share a few data points by way of illustrating possible reasons for the deal.

Digital content sales are declining

Firstly, what’s been happening to Apple’s digital content business over the last couple of years. I’ve excerpted the relevant sentence(s) from the company’s SEC filings, and there’s a clear trend emerging:

Apple digital content remarks from SEC filings Continue reading