The Measure of Success — Apple Style

October 21st, 2015

It has long been known that Apple has to aspire to a much higher standard. So what is considered successful for other companies becomes a miserable failure when Apple gets involved. Even when high sales are reported, they are often not high enough.

Consider the news that 13 million iPhones were sold the first weekend they went on sale last month. No other company has come close in such a short period. It’s better than last year’s 10 million figure, but at least some of that increase can be attributed to the fact that the new iPhones were available in China from Day One. That wasn’t true last year, and it should account for at least some of the sales improvement.

Of course, Apple might have been constrained early on by available quantities. Apple’s online store is still quoting a two or three week wait on some models, although you should be able to find the one you want if you look around, or you’re willing to compromise on color or storage.

That takes us to Apple Music.

With Apple Music, it began with lots of promise. The very week before it debuted, there was that famous dustup between Apple and singer Taylor Swift about paying royalties to artists and songwriters during the free period. Apple hadn’t planned to do that, but the outcry from Swift’s comments made them change their tune. Or was it really a put up job to generate buzz?

Regardless, it did seem Apple Music was meant to be a hit out of the starting gate, but the signup numbers appear to present a mixed verdict. Ahead of the expiration of the first 90-day trial, on September 30, Apple VP Eddy Cue said they had 11 million subscribers who signed up to sample the service. There were contradictory surveys of just how many planned to actually pay, and the numbers didn’t seem so hot.

Now when you look at the Apple Music figures, you’ll first want to see just how well other services have fared. The number one subscription music service is Spotify, which started in 2008. As of May 2014, they had 10 million paying subscribers; that number soared to 20 million by June of this year. But now they have competition from the largest tech company on the planet.

So after three-and-a-half months, Tim Cook reports that Apple Music has 6.5 million paying subscribers, out of a total of 15 million that are using the service. The rest are still just sampling.

Is this a good number? I can’t say, although an investment firm, FBR & Co., said they expected five million, and thus Apple exceeded expectations. But it’s also true that Spotify started from zero. Apple has hundreds of millions of iTunes users with credit cards on file. So it’s a trivial matter for people to sign up.

But there are loads of questions. How many people are even paying attention to Apple Music? Are Spotify users aching to switch to a service that promises extra human curation and exclusive tracks, such as Taylor Swift? After all, when you switch, you have to give up the music library you acquired from another service and start from scratch. If you’re a creature of habit, or have invested a lot of time in building custom playlists, you might not want to start anew just to get a few exclusives. Nothing stops you from buying a few albums the regular way to get music that your chosen service doesn’t offer.

So maybe gaining switchers won’t be a large factor, but Apple Music hasn’t been around long enough to know.

To be sure, the service has been heavily criticized for a too-busy interface, which makes it more difficult to get the lay of the land and find the music you want. During my 90-day encounter, it took a long time for Apple Music to begin to grok my musical tastes, which aren’t particularly weird. For You continued to display albums from the likes of Eddy Arnold, Tom Jones and Barry Manilow long after I rejected such choices. On the day before the first renewal date, I realized I hadn’t checked out Apple Music in weeks. I listened to music regularly on my old fashioned radio, and I listened to the tracks I already owned in iTunes, but I hadn’t paid attention to the albums Apple Music added.

So I decided not to renew.

Now it’s also true that Apple hasn’t exactly engaged in a major promotion of Apple Music, so it may be a matter of a gradual increase in subscriptions over time. I would also hope the interface confusion will be resolved, but that should be part of a long-needed overhaul of iTunes.

The ultimate question is the same. How many people are willing to rely on subscriptions to build music libraries? The numbers reported by Apple are small. Spotify’s may be three times higher, but it took years to get there, although the growth rate is high. Will the presence of Apple Music hinder Spotify’s growth curve? I expect it will, but I’m not sold on rented music. I’m not sold on renting applications either, although that business appears to be doing well for Adobe and Microsoft.

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