Thursday, September 3, 2015

How Apple Music and Tidal are Really Doing in the Streaming Wars

Written by Jonathan Keane — The music streaming wars have become a touchy subject as all the major players are trying to get a leg up in the battle. Apple Music, launched in June, hit out at reports in mid-August that users were giving up on the service before their three-month free trial had finished.

The study from MusicWatch had claimed that 48 percent of people had ditched the service, which Apple has wholeheartedly refuted.

Retaining users early on will be the key factor in music streaming services gaining the upper hand but it is one thing to reel in users for a free trial, and another to make sure they stick around and pay for it. The business models of the music streaming giants has come under increasing scrutiny as a result with Spotify regularly rumored to be dropping its free tier.

Getting the edge

Each service is trying different hands to get an edge over the others. Spotify is established, but how have Apple Music and Tidal fared in their first few months?

Apple Music has garnered the most attention and notoriety, despite its rocky launch when Taylor Swift challenged the Cupertino giant for not paying out royalties during free trials (which it caved to). Dr. Dre’s new album, Compton, released ahead of the NWA biopic, was streamed 25 million times in its first week. Dre, the Beats co-founder and eventual Apple employee, has brought some serious clout to Apple’s music streaming ambitions.

The selection is obviously a big factor in convincing users to join. Initial kerfuffle aside, Taylor Swift’s catalog is on Apple Music and not on Spotify and Tidal has attempted to leverage its all-star owners and their friends to create similarly unique offers to subscribers. Most recently, it announced it will stream Prince’s new album Hitnrun on September 7, a notable coup for the service.

The human touch is another of Apple Music’s selling points with the simple message that humans pick better tunes than algorithms. “Algorithms are great but they’re very limited in what they can do as far as playing songs and playing a mood,” Jimmy Iovine told Wired not too long ago.

The Beats1 radio station with DJs like Zane Lowe adds to that human feel too. It’s become something of homage to the old style of tastemakers rather an algorithm pointing out that you like this song so maybe listen to this similar one.

While users can access a song anytime they want on the regular service, the success of Beats1, thus far, has shown people have an appetite for something a little traditional at the same time.

It hasn’t been an entirely smooth ride though for Beats1, with some users reporting downtime on the station and glitches where songs repeated.

Keeping things simple

Apple Music’s app meanwhile has been praised for its simplistic design and ease of use on top of the curated playlists.

“Visually, I prefer it to Spotify. It just makes me want to click on the albums and I love the ‘For You’ section as it personalizes the service to my choices,” says Nicole, one Apple Music newcomer. “I also really like the Apple Editors Playlists as it enforces that Apple Music has experts available to share their thoughts around what’s exciting in music.” She says she’ll be opening her wallet for the service once the trial is up.

“I think the main appeal for me over Spotify is that it feels easier to use—no extra apps to install and maintain, for example,” says Rob, another Apple Music user.

Apple has a major advantage getting people to sample Apple Music—it comes pre-installed on iPhones. It helps that it’s one of the most popular smartphones in the world, so enticing users to at least give Apple Music a try is that bit easier. Oftentimes pre-installed software, or bloatware, is the subject of criticism but Apple has completely turned this in its favor.

A three month free is a very attractive offer too but will the slew of users that have been early adopters of Apple Music stick around when it comes time to open up their wallet?

We likely won’t get a clear idea of that or any kinds of hard numbers until the next quarterly earnings call. However unlike its massive sales of iPhones, getting people to pay for a software subscription is different to paying up for a piece of hardware and Apple will want to ensure Apple Music is its centerpiece for its software offerings.

Tidal on the other hand has been struggling to stay in the conversation. The high profile streaming service had a huge launch with buyer Jay Z bringing in a marching band of celebrity co-owners to back Tidal. Unfortunately the launch didn’t endear it to fans, damned by one media commentator as “tone deaf”.

The service’s cool factor didn’t last as long as it had hoped and Apple Music has managed to match it. Drake even jumped over to Cupertino.

Hard numbers for Tidal are difficult to come by too. In April, Jay Z said Tidal was “doing just fine” with 770,000 subscribers but it’s been an uphill battle since then. One of Tidal’ top executives Zena Burns recently departed from the company after just two months in the role.

There’s also been little said of the company’s partnership with Ticketmaster earlier in the summer, where subscribers could buy concert tickets through Tidal, and whether or not it’s seen much uptake from users.

Tidal pushes its high quality, high fidelity music streaming, which is one of its key selling points and one of the service’s defining features. Unfortunately, in the grand scheme of things, this remains a niche feature for users when it’s compared to Spotify and Apple Music or even other services like Deezer.

We’ll have to wait to see if Tidal can turn the ship around, but as of now they seem to have been pushed toward the back of the fleet.

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