But that makes no sense. It’s like a real estate agent saying he doesn’t want to deal with the rental market because he thinks it will stop people from buying houses.
Apple can’t stop the Spotify-like market, so why don’t they just join it. They could easily dominate Spotify for Apple users by integrating it into their ecosystem.
If it was profitable I’m sure they would.
But these losses are all presumably coming from the fact that Spotify has had huge costs just in getting the business up and running (all the hardware, all the lawyers fees setting up the legal contract in every country, marketing costs, etc). Apple has all this covered, they have all the hardware, they have all the contacts in the music business setup, they’ve gone through all the legal pain already, their brand is enormous so their wouldn’t be any additional marketting cost. So any revenue they would get by simply flipping a switch would presumably be profit making.
I personally don’t buy music anymore, I have an infinite library at my disposal that I rent for $11 a month. Surely Apple would have lost massive market share from people like me no longer buying from iTunes, which is why I’m surprised they haven’t joined that bandwagon.
You think that the contracts Apple currently has with the music business would just automatically transfer to a Spotify-like agreement?
That’s a pretty optimistic view - I find it hard to believe.
No, absolutely not, but the groundwork and relationships are all laid down already. In any business, whether it be Music or Asset Management, it’s getting past this that’s the main hurdle.
A company like Apple would glide through the barriers that Spotify would have had to pour blood, sweat, and tears over.
Just imagine the conversations:
Guy from Spotify calls Sony to discuss his business:
Spotify Guy: hi, I’m the CEO from a company called Spotify.
Sony Receptionist: please hold.
Spotify Guy (10 minutes later): I’ve got this idea to stream music online for $11 a month, I’d like a meeting to discuss.
Sony Receptionist: sounds ridiculous, but ok, maybe a meeting in 6 months with someone fairly junior.
Guy from Apple calls Sony to discuss his business:
Apple Guy: hi, this is Bob calling from Apple…
Sony Receptionist: hold on, I’m transferring you straight through to the CEO.
I’m obviously trivialising a bit, but you get the point I’m trying to make.
Most people I know use Living Social more than Groupon. It’s legit, although someone in his basement can create the next Living Social next year.