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Apple’s developers conference (DDWC) will start today in San Francisco and it will continue until June 14th (Friday). During the event, the technology giant is expected to unveil its very first music streaming service. This will be Apple’s second biggest music project after iTunes. The company’s music store was launched about 10 years ago in an attempt to fight music piracy.
It is predicted that Apple’s streaming service will initially be available in the U.S. Also, it will stream music in accordance to the user’s preferences. It is likely that the service will be free of charge and it will probably be supported by advertising. Along with that, Apple will add “Buy” buttons that will encourage consumers to download the tracks.
The service is expected to be available sometime in September. The technology company is reported to have signed deals with various music companies and music labels, including, Warner Music Group, Universal Music Group, Sony/ATV Music Publishing, as well as Sony Music Entertainment.
The majority of people who own mobile devices today use them to buy and download music. Currently, Apple’s iTunes store holds the amazing 63% of the market for paid music downloads in the U.S. However, streaming services are now starting to replace downloads. This tendency is even more apparent among smartphone users. That is proved by the fact that the two most popular music streaming services, Pandora and Spotify, made up 20% of the global digital music revenue last year.
With the new service Apple will obviously try to become even more competitive in the game and in the music industry as well. Moreover, many of the giant’s rivals are now trying to find a place on its iPad and iPhone devices by adapting services and apps for them. Thus, Apple’s own platforms and applications are witnessing a drop.
The rumours around Apple’s music service started a year ago. However, the company was delaying the service until Google announced that it will introduce a music service called All Access. Google’s platform also streams music and it is available to Android users. Nevertheless, All Access requires a monthly subscription fee of $7.99.
Other companies which are trying to enter the market of music streaming are Nokia and Amazon. The Finnish phone manufacturer introduced a free web radio for its Lumia devices. Amazon, on the other hand, is now said to be working on a subscription music service of its own. The online retailer is even reported to be in talks with a number of music labels.
Although the online music world may soon become overcrowded, Apple has two main advantages. The first of them is that its service will be available for free. In addition, the company may produce an ad revenue which might be twice bigger compared to the one Pandora receives. That is because Apple is not getting licenses from the government, but from the music companies directly. As a result, songwriters’ companies and publishers will receive 10% of the ad revenue, while record labels will get around 50% of it.
This may be more than enough to challenge well-established online music services like Spotify and Pandora.