Apple Bundles Are A Direct Assault On Spotify – Here’s Why
Apple’s new plan to bundle its TV, gaming, news, storage and Apple Music services into one monthly fee could is considered by many to be a direct assault on Spotify, whose subscribers often also pay for one or more services from Apple.
Guest post by Bobby Owsinski of Music 3.0
Apple is reportedly about to launch a series of bundled services as soon as October, which will provide a lower per month cost over the individual fees as they are now. According to an article in Bloomberg last week, Apple Bundles, internally labeled as “Apple One,” will consolidate Apple Music, TV, News, Gaming and cloud storage services together under a single monthly price.
While many feel that such a move might be for the benefit of Wall Street, which adores recurring revenue streams, it’s also possible that Apple’s sights are on Spotify as well.
Many Spotify subscribers are also subscribers to one or more of Apple’s services other than music. Consolidating Apple Music with those additional services for a single fee might be enough of a push to get current Spotify users to delete their subscriptions and switch to Apple Music instead. After all, why pay for two music subscriptions that provide essentially the same service?
Apple Bundles will reportedly come in tiers, with the basic tier including Apple Music and Apple TV+. A mid, higher priced tier will also include the Apple Arcade gaming service, with the most expensive tier including Apple News+ as well as iCloud storage for files and photos.
Obviously, the more Apple services you already use, the more likely you are to switch to Apple Music regardless of the music streaming service that you already use. The exception to this might be the typical Amazon Prime user, who’s already receiving a version of Amazon Music as part of the Prime package, even though that’s probably not the reason why they’re a Prime member.
Although Apple appears to be inching its way towards its Bundles launch, there appear to be some obstacles to overcome on the music side. It’s been reported that Apple’s latest licensing deal with the major labels expressly states that music is not to be bundled with other services. While the majors are probably willing to renegotiate the previous deal, working out the royalty split on a bundled deal can be complicated and require more time than a standard music licensing deal.
Still, it’s unlikely that any of the music licensors will stand in the way of Apple Bundles, which will mean another revenue source during a time when new sources are being tapped out. That said, it’s one more reason why indie streaming services will find it harder to survive with each coming year.
Owen Davie on 08/21/2020 inMajor Labels
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