Tag Archives: streaming music

Will International Appeal Give Apple Music the Edge Over Spotify?

Apple Music launched last week with less fanfare than expected, perhaps a victim of early holiday travel ahead of U.S. Independence Day.

Regardless, it is the long haul that matters most to Apple, as the world’s most valuable brand attempts to claw back the early-mover advantage that Swedish rival Spotify has enjoyed – and exploited  – to date.

Part of that strategy is likely to be played out on the global stage, as Apple’s new streaming service is available in significantly more markets than its peers. 

 

For a quick comparison, Apple Music has launched in more than 100 countries, which is almost twice as many as Spotify currently operates in. Furthermore, there are a number of territories in which Apple has launched its service where neither Spotify nor any other notable competitors currently operate.

Perhaps most importantly of all, these are not all smaller territories with limited market potential.

Among the territories in which Apple Music will beat Spotify to the punch are India, Russia, Japan, and  Nigeria. Between these four alone, the number of potential consumers could stretch into the billions, although activating them inevitably poses a major challenge given prevailing levels of piracy and, with the exception of Japan, less mature streaming markets. This provides a stark contrast to the reverse situation for Spotify, wherein the only markets it will now operate without competition from Apple Music are Turkey, Taiwan and smaller European nations like Liechtenstein and Andorra.

The importance of this advantage cannot be overstated. For many consumers in these countries, which potentially hold the key to the global expansion of streaming music, Apple’s platform will be their first experience of the phenomenon. Given the game-changing nature of digital streaming, not to mention the fact that many hold it up as the long-term solution to piracy, the potential for Apple Music to take giant strides into these territories is just as crucial as its need to build a customer base in the United States, Europe, and Australia.

In June, Spotify announced that it has passed the 20 million mark in terms of paid subscribers, while its overall active user base now numbers more than 75 million globally. Although that growth rate is increasing quickly, Apple Music is not competing from a standing start. The hundreds of millions of active iTunes accounts the Cupertino company has on file provide a solid base to convert to its new service, in addition to the Beats Music users that it hopes to bring across from the service it purchased last year.

All of this sets the stage for an intriguing evolution of the streaming music space. The market, although relatively young, has been waiting for some time for Apple to enter the fray and challenge Spotify’s dominance. It is clearly a battle that Apple intends to win, if the brand’s commitment to pay artists for all streams during its three-month free trial period is anything to go by. That will cost Apple a pretty penny, but the company clearly believes the long-term pay off in terms of brand awareness and the associated loyalty will be worth it.

For artists, the hope has to be that Apple can use its extensive resources to raise awareness of streaming music services and increase . It this really is the piracy killer that many believe it to be, making streaming subscriptions a truly global trend will have everyone involved in the music business singing Apple’s praises.

A Glimmer of Hope in a Bleak Russian Music Market

Russia isn’t normally the first international location from which we expect positive news on copyright protection, so when it comes we’ll take it in almost any form.

Logo vkontakte.ru

Logo vkontakte.ru (Photo credit: Wikipedia)

The positive in this instance is that the news involves VKontakte, the country’s largest social network and one that has come under substantial scrutiny from rights holders in other countries for its lax approach to preventing copyright infringement.

The negative is that the site is taking only the slightest steps towards rehabilitating its reputation, removing just one option that iPad and iPhone owners can use to access unlicensed content for free. The streaming function on the site allows any audio uploaded by users, including music that should be protected by copyright law, to be accessed across any device on which VKontakte is available.

Those Apple devices are now eliminated from that list, but it still leaves Android, Windows Phone, and any other computing device from which Russian citizens can log in to their main social network. That’s a lot of places they can still support pirated content, and not the most convincing move if VKontakte is trying to get in the good books of foreign rights holders.

The case itself is a microcosm of the wider piracy picture in Russia, where nods have been made to stricter copyright protection by the government but piracy remains a prominent activity.

As we reported late last year, the country made it onto the MPAA’s list of the world’s most notorious markets in terms of copyright infringement, and the International Intellectual Property Alliance has Russia blacklisted for similar reasons.

 

Vkontakte plays a large part in the country’s ongoing status as a rogue nation when it comes to piracy, providing a mainstream platform that presents content for free, without repercussions . If Facebook did the same thing in the U.S. it would be unthinkable, and we could only imagine the swift legal action that would bring a site of even that size to take swift action. To find a silver lining, though, we can at least say that VKontakte – and Russia as a whole – is slowly starting to move in the right direction.

Interestingly enough, the real motivation to become a legal player in a market that currently relies on piracy for its music and entertainment consumption, could lie just a fewborders to the west. In Scandinavia, the popularity of Spotify and other streaming services has coincided with a dramatic drop in piracy rates. Although it is early days for streaming, that success does seem to be slowly resonating in other markets around the world, pushing piracy to the sidelines in the wake of legal services that provide free and near-free access to unlimited music.

Flag of Russia

Flag of Russia (Photo credit: Wikipedia)

Now, with Spotify eyeing the Russian market to the point of an eleventh hour decision to cancel its planned launch early this year, other services may see the potential to profit, even where piracy rules.

Spotify’s hesitance seems to be based on concerns for Russia’s economic stability and other regional concerns, but VKontakte already has stakes in that game and will play whether or not it looks to streaming music as a source of revenue.

Rumors abound that the company, owned by Mail Ru Group, has been in negotiations with major music labels in the U.S., which points to a plan rooted in more legitimate content distribution.

So even though the news is only lukewarm for the moment, the potential for legitimate streaming services to rush in and wash away piracy in one of the world’s most notorious markets for unlicensed content is much more encouraging.

Has Norway Provided a Blueprint to Beat Piracy?

English: Map showing two of the common definit...

English: Map showing two of the common definitions of “Scandinavia”;  (Photo credit: Wikipedia)

Scandinavia has been the leading light of streaming music services for many years, and now some believe it will provide the blueprint to beat music piracy for good. (Or at least make it a marginal issue.)

In the space of just five years, the number of Norwegians under 30 – the demographic most likely to engage in piracy – who admit to illegal file-sharing has dropped from 80% of respondents in 2009 to just 4 percent last year. These are levels that industry analysts say amounts to piracy being “virtually eliminated” in Norway.

The significant shift is inextricably linked to the rapid uptake of streaming services, which are now used by some 1.7 million Norwegians. The ease and convenience of platforms like Deezer and Spotify is credited with making illegal downloads a much less attractive activity, with similar stories seen across the border in Sweden (where Spotify first started).

Piracy in Scandinavia, it seems, is rapidly going out of style.

Of course there are various caveats to highlight, even against the backdrop of this overtly positive report.

Firstly, not everyone is inclined to tell the truth when faced with a survey. True, a large number of people were unafraid to admit to the practice back in 2009, but it’s also a long time to allow for a change in user attitudes, as well as behavior. A certain amount of the reduction might simply be that it’s less acceptable to admit to piracy in public now than it was five years ago. In the intervening period there have been major criminal cases against file-sharing sites like Megaupload, which was shut down by U.S. authorities in 2012, and more recently The Pirate Bay.

Such high-profile shutdowns could easily influence illegal downloaders to steer away from their bad habit or, at the very least, not admit that they do so when questioned by a stranger.

 

Another factor lies in the small sample size.

Norway has a population of only a little more than 5 million people, of which those under-30 translate to another small sub set. Although the target group is the most important to consider when it comes to online music consumption, the assumption that this relatively small group’s behavior would naturally extend to their counterparts in developed markets around the world is open to question.

Finally, the early results in other major markets don’t appear to stick to Norway’s blueprint. Even with a number of streaming music services now operating in the U.S. market, torrent activity remains a prime concern for anti-piracy groups, while file-sharing sites continue to see plenty of illegal content activity. The fact that most legitimate services have only been operating since 2011, and that North America is a much larger market, means that we must allow some additional room for the adoption rate to grow, but again the question mark remains over whether a majority of consumers will choose streaming as their music solution.

Even so, advocates of both streaming services and intellectual property protection will be hoping that the underlying expectation of the Norwegian model holds true for the rest of the world. If convenience really can kill piracy, the wheels are already in motion for Spotify and its peers to move major markets further down that road.