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How Apple is going to remake the music market

On Monday at its annual developers conference, Apple showed off its new music service – Apple Music. He works in a popular format for streaming, when a man can listen to music tracks online rather than download them to your computer or phone. For the first time in many years, Apple has launched a significant project, which is not something brand new to the market. In the case of streaming Apple lagging behind world progress. Streaming services have already launched all and Sundry – from the pioneer of this format Swedish Spotify to Google, Deezer, Microsoft (Xbox Music) and Russian Zvooq and “Yandex.Music.” Apple all this time sold music whole albums and individual tracks through the iTunes store, making sure that all stats will not fix the falling popularity of this business model and the rise in streaming services revenues.

Now Apple has actually jumped into the last car, although she shaped the music industry in the Internet. In 2003, the Apple founder Steve jobs to convince the major record companies to start selling music over the Internet. He insisted that the iTunes sold not only albums, but also separate music tracks for 99 cents apiece. It was the revolution of industry, used to sell music albums on CD in stores, BestBuy at $15-20 per disc. Apple gave impetus to the development of the whole industry, digital music, which amounted in 2014 to $6.8 billion (IFPI data).

Whether Apple, and this time to have a decisive impact on the market? The entire music industry is now becoming virtually in one piece for iPhone, observers say. Apple launches services for iPhone and iPad in order to stimulate their sales. They made Apple the richest Corporation in the world. In 2014, its revenue reached $kt 182.8 billion, and it is basically the sale of devices, not content. Bank accounts the Apple store about $180 billion, say “Vedomosti”. It is clear that in this situation music services are perceived Apple as a marketing tool to promote your core business and not as a separate business: they need to be high quality, but can not bring much income. This is radically different from the situation in which there are independent players in this market: Spotify for seven years can’t get out of losses due to high royalties to copyright holders. Apple can certainly offer them more favorable terms.

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In 2014, when Apple was preparing a streaming service, some musicians were suddenly to declare that they are not satisfied with the work model Spotify, offering to listen to music for free for advertising. The participants of the media market say that these gestures are not without secret influence Apple. This is indirectly confirmed by the antitrust investigation against Apple in the U.S. – about anti-competitive behavior on the market of streaming services. So, 12 years ago, Apple has had a positive impact on the market, forming the digital music industry. And now, taking significant market position, it can prevent the development of competing services offering to holders market conditions are better.

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