EU Fines Apple Music Streaming Nearly $2 Billion for Alleged Antitrust Practices

The European Union, the political and economic union of 27 member countries representing 448 million people, March 4 announced fining Apple Music — the No. 2 music streaming service globally — more than €1.8 billion ($1.95 billion) for allegedly limiting the distribution of third-party music streaming apps to iPhone and iPad (iOS) users through its App Store.

Specifically, the complaint claims Apple applied restrictions on third-party app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app. This is illegal under EU antitrust rules.

The EU said Apple’s conduct, which it claims lasted for almost 10 years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by the media giant on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store.

In addition, the EU said Apple’s anti-steering provisions led to non-monetary harm in the form of a degraded user experience as iOS users either had to engage in a cumbersome search before they found their way to alternative music streaming offers outside the app, or they never subscribed to any service because they did not find the right one on their own.

In response, Apple claims the fine was prompted by its main rival Spotify — the No. 1 music streaming app with 56% market share worldwide — which it says has benefited from being available on the Apple App store free of charge.

“A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world,” Apple wrote in a statement. “A vast majority of developers — about 86% — never pay Apple a commission.”
 
Apple, which says it will appeal the fine, employs about 2.5 million people living in the EU.
 
“So while we respect the European Commission, the facts simply don’t support this decision,” wrote Apple.
 
 

Spotify Music Subscription Streaming Service Announces First U.S. Price Hike

Spotify, the largest music subscription streaming service with more than 200 million members worldwide, is raising its monthly fee in the U.S. for the first time.

The publicly-traded Swedish-based service is upping the monthly price by $1, with the “premium single” user access now costing $10.99 monthly, followed by $14.99 for “premium duo,” $16.99 for “premium family,” and $5.99 for “premium student.”

In a blog post, co-founder/CEO Daniel Ek said the market landscape, including artist demands for higher royalties, has “evolved,” creating additional operating costs.

“So that we can keep innovating, we are changing our prices across a number of markets around the world,” Ek wrote. “These updates will help us continue to deliver value to fans and artists on our platform.”

The price hike follows similar moves by Spotify competitors, including Apple Music, YouTube Music and Amazon Music, which are all now priced comparably.

Spotify, which reports second-quarter (ended June 30) fiscal results tomorrow (July 25), added 5 million new subs in the first quarter (ended March 31), to up its global sub base to 210 million.

Apple Raises Monthly TV+, Music, Bundle Subscription Prices

Apple has raised the monthly subscription price for its vaunted Apple Music streaming service, in addition to Apple TV+ and the Apple One bundle, which includes Apple Music, Apple TV+, Apple Arcade, iCloud+, Apple News+ and Apple Fitness+.

Apple TV+, which hasn’t raised its $4.99 fee since launching in November 2019, now costs $6.99. Apple Music, one of the largest music streaming services in the world, now costs $10.99, from $9.99, while Apple One increases $2 to $16.95.

In a statement, Apple said the price hike to the music streaming was due to an increase in licensing costs, which the company said would translate to increased royalties for artists and songwriters. Apple said the TV+ introductory price was due to the platform launching with limited shows and movies.

“Three years later, Apple TV+ is home to an extensive selection of award-winning and broadly acclaimed series, feature films, documentaries, and kids and family entertainment from the world’s most creative storytellers,” the company said.

Indeed, Apple TV+ earlier this year became the first streaming service to win the Best Picture Oscar with CODA.

Apple reports third-quarter fiscal results on Oct. 27.

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Apple Music Streaming Service Replaces Pepsi as Super Bowl Halftime Show Sponsor

The NFL announced that the Apple Music streaming service is the professional football league’s new partner for this season’s 15-minute Super Bowl LVII Halftime Show, replacing longtime sponsor Pepsi. Singer Rhianna will headline the performance, Feb. 12, 2023, at State Farm Stadium in Glendale, Ariz.

The five-year deal brings together the most-watched live musical performance of the year, with Apple Music, which offers subscribers access to more than 90 million songs.

Rhianna

“We couldn’t think of a more appropriate partner … than Apple Music, a service that entertains, inspires and motivates millions of people through the intersection of music and technology,” Nana-Yaw Asamoah, SVP of partner strategy for the NFL, said in a statement.

More than 120 million people watched The Super Bowl LVI Halftime Show live earlier this year, according to the NFL. The show featured a lineup of trailblazing rap musicians, including Dr. Dre, Snoop Dogg, Eminem, Mary J. Blige and Kendrick Lamar, and marked the first time these five multi-award-winning artists performed together on stage. The Super Bowl LVI Halftime Show earned three Creative Emmy awards.

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“Music and sports hold a special place in our hearts, so we’re very excited Apple Music will be part of music and football’s biggest stage,” said Oliver Schusser, VP of Apple Music and Beats.

Past Super Bowl Halftime Show performances include The Weeknd, Jennifer Lopez, Shakira, Beyoncé, Justin Timberlake, Lady Gaga, Katy Perry, Bruno Mars, Prince, Tom Petty, Michael Jackson and Madonna, among others.

Apple Music Streaming Service Now on Roku Platform

Roku May 2 announced that the Apple Music streaming app is now available globally on the Roku platform. Subscribers can stream on any Roku device, including streaming players, Roku TV models, and the Roku Streambar Pro. Current Apple Music subs (78+ million) can access the app with their existing log-in credentials. The app will be available to download later today.

Roku users can sign-up for Apple Music today through the Roku channel store for a one-month free trial. After the trial, Apple Music plans are available for purchase starting at $9.99 per month.

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Roku users can access more than 90 million songs and 30,000 curated playlists. In addition, Roku users with an Apple Music subscription can live stream today’s hits, classics, and country with the award-winning Apple Music Radio, as well as listen to songs, albums, and playlists from their own music library. The Apple Music app also allows users to watch music videos in 4K on compatible devices and sing along to their favorite songs with time-synced lyrics. Subscribing users will also gain access to Apple Music original shows, concerts, and exclusives, as well as personalized recommendations.

Apple Bows ‘Apple One’ Service Bundles

Since announcing a bevy of branded subscription platforms covering magazines, periodicals, music, video and gaming in 2019, Apple has partnered SVOD service, Apple TV+, with select third-parties to expand distribution. Now Apple is going in-house with platform bundling pricing options.

Dubbed “Apple One,” the bundles range from combinations of Apple Music, Apple TV Plus, Apple Arcade and 50GB of iCloud Storage for $14.95 monthly, to Apple Music, Apple TV Plus, Apple Arcade, Apple News Plus, Apple Fitness Plus, and 2TB of iCloud storage for $29.95 monthly.

The plans were disclosed on virtual event, “Time Flies” on Sept. 15.

“Apple One makes enjoying Apple subscription services easier than ever, including Apple Music, Apple TV+, Apple Arcade, iCloud and more,” Eddy Cue, SVP of Internet Software and Services, said in a statement. “With Apple One, you can access the best of Apple entertainment across all your favorite devices with one simple subscription.”

While Apple has given away 12-month subscriptions to various branded services individually with the purchase Apple hardware devices, the success of Disney’s bundle featuring Disney+, ESPN+ and Hulu likely fast-tracked the decision to look within.

“We have long argued that bundling services is a unique tool that Apple has at its disposal,” Katy Huberty, analyst with Morgan Stanley, wrote in a note last month.

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Indeed, Apple services revenue — driven by music, iCloud and App Store — has skyrocketed in recent years, topping $50 billion annually, or about $12.5 billion every 90 days. Apple Arcade and Apple TV+ continue to struggle — the latter against a field of big-name studio/media competitors chasing Netflix and Amazon Prime Video.

Apple services include:

  • Apple Music, with more than 70 million songs, thousands of playlists, daily selections from music experts, Apple Music radio, and features like time-synced lyrics.
  • Apple TV+, home to Apple Originals such as “The Morning Show,” starring Jennifer Aniston, Steve Carell and Reese Witherspoon. Apple TV+ has already earned over 100 awards recognitions, including 18 Emmy nominations, for its originals — more than any other streaming service in its first 10 months.
  • Apple Arcade, which gives players unlimited access to more than 100  games across iPhone, iPad, iPod touch, Mac, and Apple TV, all with no ads or in-app purchases.
  • Apple News+, which provides premium access to leading newspapers and hundreds of magazines.
  • Apple Fitness+, the first fitness experience built for Apple Watch, arriving later this year. Apple Fitness+ intelligently incorporates metrics from Apple Watch for users to visualize right on their iPhone, iPad, or Apple TV, offering a first-of-its-kind personalized workout experience. Everyone from beginners to committed exercisers can access studio-style workouts delivered by inspiring world-class trainers and underscored by motivating music from renowned artists.
  • iCloud, which keeps customers’ photos, videos, files, and more safely stored and available across their devices.

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.