Apple Expands Entertainment Services Globally, Excluding Apple TV+

Apple April 21 announced it is expanding the global reach for some of its entertainment platforms, including The App Store, Apple Arcade, Apple Music, Apple Podcasts, and iCloud, to 20 more countries. In addition, Apple Music, with more than 60 million subscribers, is available in 52 new countries.

The expansion does not include subscription streaming video platform Apple TV+, which launched last November in 106 countries.

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“We’re delighted to bring many of Apple’s most beloved services to users in more countries than ever before,” Oliver Schusser, Apple’s VP of Apple Music and International Content, said in a statement.

The services are now available in the following countries and regions:

  • Africa: Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Gabon, Libya, Morocco, Rwanda and Zambia.
  • Asia-Pacific: Maldives and Myanmar.
  • Europe: Bosnia and Herzegovina, Georgia, Kosovo, Montenegro and Serbia.
  • Middle East: Afghanistan (excluding Apple Music) and Iraq.
  • Oceania: Nauru (excluding Apple Music), Tonga and Vanuatu.

 

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Apple Music is expanding to:

  • Africa: Algeria, Angola, Benin, Chad, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Namibia, Republic of the Congo, Senegal, Seychelles, Sierra Leone, Tanzania, and Tunisia.
  • Asia-Pacific: Bhutan.
  • Europe: Croatia, Iceland, and North Macedonia.
  • Latin America and the Caribbean: the Bahamas, Guyana, Jamaica, Montserrat, St. Lucia, St. Vincent and the Grenadines, Suriname, Turks and Caicos, and Uruguay.
  • Middle East: Kuwait, Qatar, and Yemen.
  • Oceania: Solomon Islands.

 

Apple Arcade is a video game subscription service within the App Store, offering users access to the catalog of more than 100 exclusive games, all playable across iPhone, iPad, iPod touch, Mac, and Apple TV. Apple Podcasts feature more than 1 million shows in more than 100 languages and 175 countries and regions.

Futuresource: Music Streaming Declines in COVID-19 World

With the exception of vinyl records, subscription streaming music services remain the number one growth driver in the global music market, accounting for more than 70% of spending on music last year, according to Futuresource Consulting.

Yet, as measures to halt the spread of COVID-19 begin to reshape the lives of consumers, music streaming is experiencing a temporary decline, with consumption down from 15% to 20%.

“We may have expected to see an uptake in the use of streaming music services, as people become confined in their homes,” market analyst Alexandre Jornod said in a statement. “This is linked to consumers adjusting to new confinement rules, which have removed key music listening situations like the daily commute, as well as office and gym time.”

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Futuresource says that as families spend more time at home together, music consumption is becoming a shared activity. Before the pandemic people were using separate accounts to play different music, now smart speakers are likely to be used with a single account used to play music in the household.

The London-based firm said there is also competition from gaming, movie and TV show streaming. These activities require a higher level of attention and tend to be favored when some extra time is freed up as a result of routines being interrupted.

“Once consumers become accustomed to the situation and establish new routines, we expect streaming music to get back to levels similar to before the crisis,” Jornod said. “Home listening will dominate, with a shift in the music types and genres as consumers seek out lean-back mood playlists as opposed to searching for specific songs or artists.”

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Meanwhile, Futuresource said Spotify and Apple account for more than 60% of combined global subscriptions. Spotify remains No.1 globally, with Apple No. 1 in the United States. Amazon Music’s multiple streaming plans cater to a wide audience, although its subscriptions are closely linked to Echo smart speaker geographies, which skew heavily towards the U.S. and U.K., according to Futuresource.

The research firm contends Google-owned YouTube Music has the potential to become a key player thanks to its established YouTube audience. Smaller players like Deezer, Tidal and Napster are focusing instead on strategies such as targeting local markets, serving niche audiences or B2B operations.

“Streaming music subscriptions also benefit from markets where physical media has been historically strong and they are now transitioning to streaming,” Jornod said, alluding to Germany, Japan and France, which he said are experiencing accelerated adoption — unlike maturing markets in North America.

“Watch out for a rise in podcasts beginning to exert its influence, as well as enhanced listening experiences such as Hi-Res audio, Dolby Atmos Music and Sony 360 Reality Audio,” Jornod said.

RIAA: Recorded Music Sales Up 13% to $11.1 Billion in 2019

When streaming is your friend, the fiscal outlook never looked better. The Recording Industry Association of America (RIAA) disclosed that sales of recorded music in the United States grew 13% to $11.1 billion.

About 80% of that revenue came from subscription streaming services such as Spotify, Amazon Music, YouTube Music and Apple Music, among others. Indeed, the RIAA said streaming revenue alone ($8.8 billion) topped the entire U.S. recorded-music market from just two years ago. Music consumers streamed more than 1.5 trillion songs in 2019.

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Meanwhile, vinyl records continue their comeback, generating a 19% increase in sales — the largest revenue for the format since 1988 Overall, packaged music sales dipped 1% to $1.15 billion — largely due to a 12% decline in music CD sales.

Notably, digital music download sales dropped 18% to $856 million, marking the first time since 2006 that revenue fell below $1 billion.

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“Music is by far the biggest draw to tech platforms, gaining views and listens that generate enormous revenues for distributors,” Mitch Glazier, CEO of RIAA, said in a statement. Music companies have driven a fourth consecutive year of double digit growth and continued to build a digital-driven industry with a focus on the future.”

 

Apple Drops Subscription Gaming Platform Price, Eyeing Content Bundles

Apple, like much of the tech world, has gone to a subscription-based business model to offset slowing iPhone sales.

In addition to launching Apple TV+, Apple bowed gaming-themed Apple Arcade and news-based Apple News+. Now, the company is cutting $10 from Arcade when paying the full $49 annual price compared to the $4.99 monthly fee.

Arcade aims to offer myriad online games (playable on iPhone, iPad, etc.) akin to what Netflix, Hulu and Amazon Prime Video do with movies and TV shows. Notable titles include Where Cards Fall, Grindstone, What the Golf? and Sayonara Wild Herts, among others.

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Apple is also reportedly considering bundling platforms similarly to what Disney is doing with Disney+, Hulu and ESPN+ and what Amazon does with Amazon Channels. The idea, as reported by Bloomberg, would bundle Apple Music, Apple News+ and Apple TV+ for a discounted price beginning in 2020.

The idea has apparently been met with pushback from traditional news publishers leery of giving away more of their shrinking margins. Apple currently pockets 50% of all subscription revenue, while the remainder is split among publishers depending on the number of eyeballs to their content.

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CNBC reports that consumer interest in Apple News+ — unlike Apple Music — has been limited due in large part to increasing numbers of people getting their news from social media and alternative online sources for free.

Spotify Music Streaming Service Tops 100 Million Subs; Ups Fiscal Loss

SpotifyTechnology S.A. April 29 announced its branded music subscription streaming service reached 100 million paid subscribers in the first quarter, ended March 31.

That beat the previous-year period with 75.5 million paid subs. It also nearly doubled Apple Music with 50 million subs.

Average monthly users grew 26% to 217 million (which includes free ad-supported music users), slightly lower than the company’s 215-220 million guidance range.

“Outperformance was driven by a better promotion plan in the U.S. and Canada,” founder/CEO Daniel Ek and CFO Barry McCarthy said in a statement, alluding to a 23% price reduction ($12.99 to $9.99 monthly) for the “Spotify Premium + Hulu” promotion in the U.S.

McCarthy was Netflix’s CFO from 1999 to 2010.

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Spotify launched India in late February expanding its global market footprint to 79 countries. More than 1 million users signed up for Spotify in the first week in India. The company now has more than 2 million users in India.

Regardless, the streaming service reported an operating loss of €47 million ($52.4 million) on revenue of €1.5 billion ($1.67 billion), which was up 33% from revenue of  €1.1 billion ($1.22 billion) last year.

 The service, along with Pandora, Google and Amazon Prime Music, remains embroiled in a royalty dispute with songwriters.

Last month, the Register of the Copyright Office approved upping songwriters’ royalties from music streaming services from 10.5% to 15.1%  through 2022.

It was biggest rate increase granted in CRB history, according to the National Music Publishers’ Association.

Spotify & Co. are appealing the hike, claiming it “harms music licensees and copyright owners,” among other issues. Apple Music is not appealing the ruling.

Report: 83% of U.S. Teens Own an iPhone

With Apple prepping to launch its rebooted Apple TV+ streaming platform, new data from Piper Jaffray found that 83% of teen survey respondents in the United States own an iPhone.

The survey of 8,000 teens skewed 54% male with an average age of 16.3 years. Notably, 86% of respondents said they would choose an iPhone for their next mobile phone – up from 75% in a spring 2016 survey.

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The data suggests teens would continue use the iPhone as adults, with usage expanding to Apple Music, AirPods, Apple TV+ and Apple Watch.

Indeed, Piper found that 27% of teens own a smartwatch, with another 22% planning to buy one in the next six months. That’s up from 20% in the same survey a year ago.

Apple Responds to Spotify Complaint

Apple March 15 responded to Spotify’s decision to file a complaint against Apple Music with the European Commission citing unfair business practices, including taxes and restrictions on tech and user-enhancements, among other issues.

Spotify ended its most-recent fiscal period with 87 million paid subscribers, compared with about 50 million for Apple Music. Both services operate through the App Store, which is owned and operated by Apple — and at the center of Spotify’s gripe.

Specifically, Swedish-based Spotify takes issue with the 30% tax it and other digital services must pay utilizing Apple’s payment system. If the service opts out of the payment platform, Spotify alleges Apple restricts how it can communicate with its subscribers outside the app.

“In some cases, we aren’t even allowed to send emails to our customers who use Apple,” Spotify founder/CEO Daniel Elk wrote in a March 13 post.

In a 1,124-word response on its website, Apple said Spotify wants to enjoy the benefits of the App Store without paying for them.

“Spotify has every right to determine their own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are, what we’ve built and what we do to support independent developers, musicians, songwriters and creators of all stripes,” Apple wrote.

The tech giant said the App Store has created “many millions of jobs,” generating more than $120 billion for developers while creating new industries such as subscription music streaming via through businesses like Spotify started and grown entirely in the App Store ecosystem.

“After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace,” Apple wrote.

The iPhone/iPad/Apple Watch creator said the 30% tax imposed on app payments drops to 15% after one year.

Apple said the majority of Spotify customers use their free, ad-supported product, which makes no financial contribution to the App Store. A significant portion of Spotify’s users come through partnerships with mobile carriers, which Apple claimed generates no App Store contribution but requires Spotify to pay a similar distribution fee to retailers and carriers.

“Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero,” Apple wrote.

“Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong.”

 

 

Spotify Files Complaint Against Apple Music with European Commission

Spotify, the world’s largest music streaming service, has filed a complaint against Apple with the European Commission alleging the tech giant unfairly restricts competition against the Apple Music service.

Spotify ended its most-recent fiscal period with 87 million paid subscribers compared to about 50 million for Apple Music.

In a March 13 blog post, Daniel Elk, founder and CEO of Spotify, said Apple has changed the rules and stifled innovation how it operates the proprietary App Store. Elk argues that as Apple is both the owner of the iOS platform and the App Store — a competitor to services like Spotify, which gives the company an unfair advantage.

Specifically, Spotify takes issue with the 30% tax it and other digital services must pay utilizing Apple’s payment system. If the service opts out of the payment platform, Spotify alleges Apple restricts how it can communicate with its subscribers outside the app, in addition to limiting tech and user-enhancements.

“In some cases, we aren’t even allowed to send emails to our customers who use Apple,” Elk wrote.

The executive said apps should be able to compete fairly on their merits and not based on who owns the App Store. He said consumers should have a choice of payment systems and not be forced to use systems with discriminatory tariffs.

Elk said the App Store should not be allowed to control the communications between services and users, including allegedly placing unfair restrictions on marketing and promotions that benefit consumers.

“After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition,” he wrote.

 

 

 

Music Streaming Services Appealing Royalty Increase for Artists

Subscription streaming music services such as Spotify, Pandora, Amazon and Google are planning to appeal proposed royalty rate increases for artists finalized last month by the Copyright Royalty Board.

It marks the first time music distributors have appealed compensation rates to artists. Apple Music, the world’s largest streaming service with nearly 50 million subscribers, is not contesting the royalty hike.

The three-member CRB ruled last year — in a 2-1 vote — to increase artists’ share of streaming and record label revenue from 10.1% to 15.1% through 2022.

The streaming services and artists groups spent millions lobbying their sides of the debate. Spotify & Co. contend the decision to increase artists’ compensation involved “serious” procedural and “substantive” concerns.

“If left to stand, the CRB’s decision harms both music licensees and copyright owners,” the services said in a joint statement. “Accordingly, we are asking the U.S. Court of Appeals for the D.C. Circuit to review the decision.”

David Israelite, CEO of National Music Publishers Association, criticized the streaming services for undermining the artists that drive consumer adoption.

“When the Music Modernization Act became law [in 2018], there was hope it signaled a new day of improved relations between digital music services and songwriters,” said Israelite. “That hope was snuffed out today when Spotify and Amazon decided to sue songwriters in a shameful attempt to cut their payments by nearly one-third.”

 

 

 

 

 

Spotify Inks Direct Access Deal with Samsung Mobile Devices

Spotify March 8 announced a deal with Samsung offering mobile device users direct access to the second-largest music streaming service in the world (after Apple Music). Starting today, the Spotify app will be pre-installed on millions of new Samsung mobile devices globally.

New Spotify consumers in the U.S. with select Samsung Galaxy mobile devices, including the just-launched Galaxy S10, can qualify for six months of free Spotify Premium, redeemable through the app.

The partnership expands last year’s agreement affording Spotify with Samsung’s virtual assistant software, Bixby. Spotify also enhances the Bixby Home screen by providing Spotify content and recommendations tailored for each listener.

“This partnership makes it easy for Samsung mobile users to access their favorite music and podcasts on Spotify, wherever they are and however they choose to listen,” Sten Garmark, VP of consumer products, Spotify, said in a statement.

The embedded Spotify app aims to make Samsung mobile devices more appealing to consumers.

“Our goal is to deliver the best possible mobile experience … and Spotify is the ideal music partner to help us make that vision a reality,” said Patricio Paucar, VP of marketing, Samsung Electronics America. “Whether they’re listening to the latest hit albums or checking out their favorite playlist, we’re giving eligible Galaxy S10 users access to an amazing six month Spotify Premium offer.”