Ap­ple bets on ra­dio splash in bid to con­trol stream­ing

The China Post - - BUSINESS - BY SHAUN TAN­DON

In its bid to be­come a power in mu­sic stream­ing, Ap­ple is de­vot­ing its vast re­sources to cre­ate what it hopes will be a first truly global ra­dio sta­tion.

The US$750 bil­lion com­pany, whose iTunes rev­o­lu­tion­ized how dis­parate parts of the world buy mu­sic, on Tues­day launches Ap­ple Mu­sic as it sees con­sumer trends shift to stream­ing, which al­lows on-de­mand un­lim­ited con­tent online.

At the heart of the strat­egy is Beats 1, which bills it­self as a first global ra­dio sta­tion and will be avail­able in more than 100 coun­tries.

Beats 1 will be free even with­out a sub­scrip­tion to Ap­ple Mu­sic, whose stream­ing plat­form costs US$9.99 a month af­ter a trial pe­riod — a key dis­tinc­tion from stream­ing leader Spo­tify, which of­fers a free tier for on-de­mand mu­sic de­spite crit­i­cism from some artists.

Ap­ple Mu­sic has sought to make a splash through big names on Beats 1, poach­ing the in­flu­en­tial New Zealand-born DJ Zane Lowe from BBC Ra­dio 1.

The com­pany has not named a full list of pre­sen­ters, but Lowe in a pro­file by The New York Times said that pop icon El­ton John, “Happy” singer and pro­ducer Phar­rell Wil­liams, rap mogul Dr. Dre and prom­i­nent in­die rocker St. Vin­cent had all been en­listed to host shows.

Wil­liams will de­but a song for the launch of Ap­ple Mu­sic, which en­joyed a dra­matic boost when su­per­star Tay­lor Swift said she would stream her block­buster al­bum “1989” only on Ap­ple Mu­sic.

Swift made the an­nounce­ment days af­ter threat­en­ing to boy­cott Ap­ple Mu­sic for not pay­ing roy­al­ties for streams dur­ing the free trial pe­riod, quickly lead­ing the com­pany to re­verse it­self.

For Ap­ple, Im­age is Key

Even if Ap­ple is a ma­jor power in mu­sic, mu­sic is a small part of the com­pany’s bot­tom line.

The iTunes store and other ser­vices made up less than nine per­cent of Ap­ple’s rev­enue in the quar­ter through March 28.

To many an­a­lysts, the con­certed — and with­out doubt pricey — push into stream­ing and ra­dio is aimed less at dom­i­nat­ing the mu­sic in­dus­try than at pro­mot­ing Ap­ple’s key earner: iPhones.

Beats 1 “re­in­forces the cul­tural rel­e­vance of Ap­ple as a fash­ion brand. Mu­sic is cen­tral to pop cul­ture, and mu­sic is all about mu­si­cians and artists,” said Mark Ram­sey, a media strate­gist and au­thor of two books on the ra­dio in­dus­try.

He said that Beats 1 will of­fer Ap­ple Mu­sic a public face — an as­set sorely lack­ing for Spo­tify, whose most iden­ti­fi­able fig­ure is Daniel Ek, its young Swedish chief whose style is more in­vestor than rock star.

But Ram­sey said that Ap­ple Mu­sic could ul­ti­mately ben­e­fit Spo­tify and other ri­vals, es­pe­cially those with free tiers, by in­tro­duc­ing stream­ing to the unini­ti­ated.

“If Ap­ple Mu­sic boosts the mar­ket for stream­ing ra­dio, it’s go­ing to float all the boats,” he said.

“Here it is, a ma­jor tech­nol­ogy provider with a very loud, strong global voice es­sen­tially putting its stamp of ap­proval on this cat­e­gory,” he said.

Can Ra­dio Truly Be Global?

Beats 1 marks a re­vival of the hu­man el­e­ment in stream­ing ra­dio, although it also al­lows lis­ten­ers to gen­er­ate sta­tions through al­go­rithms based on their pref­er­ences.

Days be­fore Beats 1 goes live, ri­val Google Play an­nounced its own online ra­dio sta­tion with a hu­man di­men­sion. It uses the model of Songza, the ser­vice bought last year by the search en­gine gi­ant through which real peo­ple help se­lect lis­ten­ers’ playlists.

But Google Play will only be avail­able in the United States. Like­wise Pan­dora, the In­ter­net ra­dio leader which cre­ates sta­tions based on al­go­rithms, is of­fi­cially avail­able only in two coun­tries out­side the United States — Aus­tralia and New Zealand — ow­ing to the maze of reg­u­la­tions on ra­dio around the world.

While Beats 1 aims to be global, it will broad­cast from just three cities — Los An­ge­les, New York and Lon­don — which are of­ten con­sid­ered the world’s pop mu­sic cap­i­tals, but leave the vast ma­jor­ity of the world un­cov­ered.

Tech­no­log­i­cal in­no­va­tions have al­ready given a global reach to prom­i­nent ra­dio sta­tions in­clud­ing the UK’s BBC Ra­dio 1 and Amaz­ing Ra­dio, New York hip-hop sta­tion WQHT and Los An­ge­les in­die rock tastemaker KCRW.

But glob­ally, adult ra­dio lis­ten­ers still tune in to tra­di­tional AM/FM broad­casts 86 per­cent of the time, ac­cord­ing to 2012 Nielsen fig­ures.

Cort­ney Hard­ing, a con­sul­tant to mu­sic start-ups and a for­mer editor at in­dus­try jour­nal Bill­board, said not to un­der­es­ti­mate the ap­peal of tra­di­tional ra­dio with its mix of lo­cal news, weather and event list­ings.

“Peo­ple still re­spond to that. So I think (Beats 1) is go­ing to do well, I think it’s go­ing to be in­ter­est­ing; I don’t know that it’s go­ing to be that mas­sive,” she said.

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