Apple Makes Music Fans An Offer They Might Refuse

As expected, Apple’s new music strategy is to try to be all things musical to all people. Or almost all people.

The newly christened Apple Music, unveiled Monday at the World Wide Developers Conference, includes a $10 a month streaming service that offers on-demand access to Apple’s 30 million song library, along with cloud storage and playback of your own music collection and the option to let Apple’s experts curate personalized playlists for you. It also includes a free, ad-supported internet radio service featuring featuring celebrity DJs and what Apple is billing as the world’s first 24-hour global radio station, Beats One. It also includes a reboot of Ping, Apple’s failed social media platform, now called Music Connect and featuring artist pages.

Apple_Music_iPhoneYou can also, of course, continue to purchase downloadable tracks and albums from the iTunes Music Store.

About the only thing Apple Music does not have is the sort of free, ad-supported on-demand tier that has helped make Spotify the world’s largest on-demand streaming service.

The lack of a free on-demand tier is partly Apple’s preference: It didn’t spend $3 billion to acquire Beats’ subscription-only music service last year to get into the free streaming business. But no free tier was also part of Apple’s pitch to the record labels, publishers and artists, all of whom have been agitating to get more people paying for music online, notwithstanding consumers’ demonstrably limited appetite thus far for paid streaming: Give us what we need to crush our rivals, Apple suggested, and we’ll do for paid streaming what they couldn’t. Read More »

Seeing Red over copyright

Having failed to put forth a competitive consumer proposition to counter Redbox’s dollar-a-night DVD rentals, the studios are on the verge of accomplishing what, from the point of view of their own economic interests, is the next best thing: they have brought the rental kiosk operator to heel and effectively forced it to accept a 28-day window after street date before it begins loading their DVD releases into its ever-expanding red maw.

On Tuesday, Redbox and Warner Bros. announced an agreement to settle the litigation the kiosk company had brought against the studio last year. As part of the deal, Redbox agreed to a 28-day “vending” window and to limit sales of used Warner discs. In return, Warner will allow Redbox to acquire its releases at a lower cost and promised to “cooperate” with Redbox on possible future digital delivery ventures.

While Tuesday’s settlement applies only to Warner, it’s widely expected that similar deals are in the works with Twentieth Century-Fox and NBC Universal, which are involved in similar litigation with the Redbox. Assuming that happens, new releases will essentially disappear from Redbox kiosks.

Make no mistake. Redbox rentals were hurting DVD sales and undercutting the studios’ other revenue streams. Its dollar-a-night rentals accounted for roughly one of every five dollars consumers spent on DVDs last year, and it returned a far smaller share of that dollar to the studios than Wal-Mart sends them when it sells a DVD. And from the studios’ perspective, the trend lines were getting worse. Something had to be done. Read More »