Although Apple and Spotify dominate the market, they both face pressure from technology giants Amazon and YouTube, which have both seen their market share growth in recent years thanks to free trials and product tie-ins.
YouTube Music Premium, for instance, costs $9.99 per month and offers similar features to Apple Music and Spotify, but because it’s built into one of the world’s most popular apps on the world’s most popular ecosystem (Android), adoption rates will continue to pick up apace. The key here is to build loyalty and brand awareness, and Apple’s crack marketing team have been working on exactly that.
As well as investing in million-dollar TV advertisements the company has been working hard to make Apple Music more accessible than ever and is even working on Apple Music and Apple Podcasts apps for Windows and Linux. And Apple’s so confident that its offering is better than the rivals, it’s finally opened up the iOS ecosystem and allowing consumers to choose Spotify as the default app.
Apple is also integrating its music platform into the new Apple Fitness+ app, allowing users to stay fit listening to their favourite musicians, creating workout playlists. It’s this tie-up and integration of the ecosystem that will push more users to experience Apple Music and make the switch from rival platforms to enjoy the cross-platform benefits.
One of the big questions that remain is whether Apple will eventually lower the walls and offer a free version of its music streaming platform. After all, that’s why Spotify continues to dominate – although Apple has more paying subscribers than Spotify in the United States, the European brand ultimately has a wider audience because of its free tier.
Users can choose to pay for ad-free music and download their favourite tracks, or they can settle for a free version of the service and listen to advertisements between their preferred playlists. It’s been suggested several times that Apple could adopt a similar approach – after all, the firm has lowered the boundaries a number of times and now offers services like Apple Pages and iCloud free for everyone, but analysts worry it will muddy the waters and make it harder to push people to pay.
Without counting the three-month trial period, Apple doesn’t offer a non-paid level of Apple Music right now, but its growth in key markets like the United States and the United Kingdom suggests a free version would benefit the company around the world. Indeed, Spotify has 286 million monthly active users, and less than half of them (130 million) are Spotify Premium subscribers. The latest official count revealed Apple Music had 60 million paid subscribers,and so adding a free version of Apple Music could see the company reach 150 million users.
By introducing a free tier, Apple would not only encourage music fans to flock to the service ahead of rivals, but it could use the free tier as a way to promote its HomePod and new HomePod mini, boosting its market share in the competitive smart speaker market. And that is without mentioning the value it would bring to AirPods, AirPods Pro, and AirPods Max. With a few advertisements between songs (boosting Apple’s ad revenue business), the firm could speak to a whole new audience of young, price-conscious consumers who want to use Apple but don’t have the resources to do so.
In offering a free version, Apple would not necessarily chase Spotify’s users – it’d chase music lovers who want a first-class platform to access their favourite material. And as services become increasingly important to the firm, now could certainly be the time to consider Apple Music Free, building its market dominance.
