Case study: How Apple’s iTunes scored over traditional music business

Apple is the largest music retailer in the world – courtesy iTunes. But its hegemony is under threat. Users are moving away from purchasing & downloading music to embracing the subscription & streaming model. Pandora, Spotify pioneered this trend. Spotify has a repository of 30 million songs & over 60 million subscribers.
Apple sensing this shift has decided to introduce Apple Music, an app & music service. It is based on the insight that music industry is highly fragmented & the opportunity lies in integrating all the disparate elements to provide a seamless and pleasurable experience to customers. Apple Music has tasked itself with seamlessly integrating:

1. Download

2. Streaming – which will allow users to search for songs from a repertory of millions of song & stream them over internet.

3. Radio service over internet

4. Social media platform where artists can publish about their albums & upcoming concerts & customers can engage with them.

Is Apple late to the party? Of course it is. But so was the case when it came to music player & mobile phone. But in one brutal punch delivered through iPod and iPhone it knocked out MP3 & Nokia / Blackberry respectively.

Given this track record of Apple does Spotify need to worry? It may seem so because Apple has access to millions of its devices on which it can download Apple Music App & Service enabling its users to sample it. And it Apple Music delivers on its promise of providing a seamless and pleasurable experience then it could pose a formidable challenge to existing players.

If you were the CEO of Spotify would you be worried? What steps would you proactively take to protect your business from this formidable competitor?

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