On September 30, Apple sent out a Press Release that is likely to have profound implications for the Music Industry. “Apple today announced that Apple Music, iTunes Movies and iBooks are now available to customers in China.”
Just like that, the world’s largest company opened up to the revolutionary new music service and cemented Apple’s place as a key player in the emerging landscape of the music industry.
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“Launching with millions of songs in its catalog, Apple Music in China features music from artists including Eason Chan, Li Ronghao, JJ Lin and G.E.M., as well as a wide range of international artists including Taylor Swift, Ed Sheeran and many more.”
Billboard magazine reported that users will pay only 10 RMB, or the equivalent of US$1.50 for monthly membership and access to the platform, once their three-month trial period has elapsed. The pricing is significantly cheaper than the US, where users pay US$10 per month, but is in line with Tencent’s QQ platform, which is firmly entrenched in the country.
China’s Streaming Services slide
The timing seems well planned. Apple Music launched at the end of June, which means that the 3 month trial period for the early territories elapses at the same time as the service begins in China. It’s a perfect length of time for Apple to fine-tune their product and to make sure everything is ready to crack the daunting Chinese market.
Chinese users have been big fans of the iPhone for some time now, but the iTunes Store has never been available, so the introduction of Apple content marks a turning point for the company in the mainland. However, there are still restrictions, most notably the fact that Beats 1, the live radio station which has proven to be the biggest success so far, is still not available.
Furthermore, Chinese consumers already have a wide range of local services to choose from, and an entrenched culture of piracy.
Industry watchers have been particularly frustrated in not given access to Apple Music’s numbers, and are speculating that Apple are not too happy with the number of listeners they have been able to retain. There is an expected drop off of consumers who were only in it for the three month trial, but no numbers of paid consumers is leading to speculation that the dropoff could be as high as 50%. This reticence comes at the same time as Spotify very proudly and publicly announced that they have just hit 100 million subscribers, 20 million of whom pay a monthly fee to the Swedish company.
While there is no direct comparison yet, MusicBusinessWorldwide.com has been comparing Google Search data for Apple Music and Spotify, and has found that Spotify is utterly dwarfing Apple when it comes to consumer searches.
MusicBusinessWorldwide elaborates on the graph, which “shows the search popularity of ‘Apple Music’ (red) and ‘Spotify’ (blue) across the globe this year. We don’t get a specific total or per-capita search number to analyse, but the gulf between the two services as we head into October is clear. The two spikes you see for Apple were driven by major news events: the announcement of Apple Music at WWDC in early June, and the launch of the platform on June 30.”
Only in Japan is the search of Apple Music much higher than for Spotify, but unfortunately for Apple, streaming is still tiny in Japan where physical sales of music seem to have withstood the digital onslaught.
All of which points to the fact that Apple Music really needs their Chinese invasion to pay dividends and give them the market and the success that they have grown used to. Industry pundits have leaked the news that Apple Music is planning a major pre-Christmas advertising blitz in a bid to take on the might of Spotify and cement themselves as the industry leaders in the emerging business of streaming music.
