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Apple hosts a terrestrial radio to boost digital service



Late Steve Jobs is widely credited with launching music into the digital future with the invention of the iPod and the iTunes store. Now, his successor Tim Cook is trying to develop Apple's influence on music through one of the oldest forms of listening: terrestrial radio.

Apple's discussions on a potential dispute with the American radio group iHeartMedia, which the Financial Times reported last month, say the iPhone maker wants to nurture close ties with the music industry that Jobs has been pushing for.

Music executives say that after late entry into music streaming in 2015, the technology group has gained confidence and confirmed its efforts to grow Apple Music. The number of subscribers grew to 56 million, up from $ 50 million in May, and Apple recently took over Spotify to become top music service in the United States, the world's largest revenue-based music market.

"Apple has come out of the door with an inferior product three years ago. Apple's music has not become such a spectacular product as iTunes was," said senior executive director at one of the "big three" publishing houses.

But executives added that Apple had "become more aggressive" in the past year.

"They become more serious, they come to us with new ideas all the time, that they would not do two years ago."

"Changing the Guard"

Like Spotify, Apple Music offers an unlimited "on-demand" access to a $ 10 million US $ 10 monthly playground library monthly. Apple's service is closely integrated with other services and devices, from Syria to its HomePod speaker system.

Since launching its streaming effort with the purchase of Beat, the handset maker and music applications, for $ 3 billion in 2014, Apple continued to extend its bid through acquisitions. In September of this year he bought Shazam, the beginning of the recognition of music, for $ 400 million. He also spent tens of millions of dollars in renting a founder of Asaii, a music analysis company, in October.

Meanwhile, co-founder Beats Jimmy Iovine retired in August, and Oliver Schusser, who previously worked at Apple's London office, moved to California for conducting music service around the world this year. In August, Apple Music hired Brian Bumbery, a veteran of the music star publicist, like Madonna, as the head of the audience.

"Definitely a change of guard," said one executive director of music, pointing to the departure from Mr Iovine's strategy for paying high priced for exclusive artist releases such as Drake.

Despite the renowned DJs like Nicky Mina, who attracts a large audience, the Beats 1 radio service has not moved in the way Apple liked

But Apple did not give up on Beats 1, its 24-hour digital radio station led by DJs like the former BBC star Zane Lowe. Despite the famous DJs like Nicki Minaj bringing a big audience, the daily radio service in the air show did not go the way Apple hoped when it was first launched three years ago.

Apple's investment talks in iHeartMedia, a bankrupt company that dominates US radio companies, shows how to look for new ways to expand audiences for Beats 1.

Any agreement could also help Apple close the gap with Spotify, which is still a global leader in music streaming, and industry executives say it is better to attract customers. Despite Apple Music that has added 6 million users in the last six months, Spotify continues to grow faster, globally, increasing by 12 million subscribers to 87 million in the same time frame. Tag managers also say that Spotify's audience tend to be younger and often use the service of more mature demographic groups at Apple Music.

Novelties about the potential thrust of the silicon duel in dealing with traditional radio deals have surged many in the world of music. But any agreement iHeartMedia would also be aligned with Apple's accent on human tastes and curator rather than algorithmic recommendations, pick new artists to promote or compile playlists.

According to people who are familiar with the negotiations, Apple has considered buying shares in the radio, as well as signing up for a marketing or promotional partnership.

Another option that is being considered is that Apple buys iHeartRadio's streaming platform, which would be a relatively inexpensive way to fetch 120 million registered service users.

"Earth radio is not the power it used to be, but millions of people listen to radio," said one of the chief executive music directors. "These handsets will inevitably be relocated to Internet services and could be linked to Apple."

Mark Mulligan, an analyst with Midia Research, said any job could give Apple the knowledge required for radio success, and it is often run by strong people and brands.

"Apple understands that when it gets the right radio, it will be an important tool," he said. "They have shown that building a radio is not as simple as putting music in the sequence.

"You need to know how to program, build personality and brand," he added. "Apple is still on that trip [with Beats 1], i [iHeartMedia] to give them an industry of IQ to that. "

Raise higher incomes

As Apple faces a mature market for smart phones, music and other media services become the most important component of total revenue growth. Mr. Cook said that by 2020 he would want revenues generated through his online services, including Apple Music, the App Store and Apple Pay, to earn $ 50 billion – doubling from 2016. Company revenue was for the first time in the last quarter of the company for $ 10 billion.

With billions of dollars each year generating subscription revenue, Apple considers music crucial to keeping users loyal to their iPhones and encouraging them to buy other devices at a time when growth is becoming more and more difficult to find in the smartphone market. One person near Mr. Schussera said music could be part of the offer offered with Apple's upcoming video service, which will be expected next year.

Apple has managed to increase revenue by charging more for its devices. Media offering, such as free music services along with iPhone devices, is yet another way Apple could justify high prices, Mr Mulligan suggested.

Unlike Spotify, who has to neglect substantial losses as a stand-alone company, Apple can also subsidize its streaming service – which is likely to be difficult to make due to copyright fees paid to artists and labels – through its highly profitable devices.

Mr. Cook has alluded to such a tactic, I'm saying Fast Company this year that Apple is not " [music] for money ".


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