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Summary:

With the popularity of Spotify, Pandora and others, Apple probably wants to find a way to keep its customers from wandering outside its ecosystem just because it has no cloud-based music streaming service. Attitudes are changing about owning media, which Apple must recognize.

itunes-match

Apple is reportedly looking to build its own web radio service through iTunes, something similar to Pandora. Both the Wall Street Journal and the New York Times have reports that say Apple has started talks with music publishers for the appropriate licenses that would allow it to pursue such a service. It sounds like Apple basically is looking to apply its “genius” function to music in the cloud. And with the rise of customized, streaming music services, it’s possible Apple is looking for ways to defend its music turf.

We know Apple is looking to integrate iCloud and iTunes. Apple knows what music you like based on iTunes downloads, and it knows what music you listen to most. It could try to take that data and recommend songs that stream via iCloud like a radio instead of only recommending songs to purchase, which iTunes already has. It could be that Apple is paying attention to trends that show a lot of people are starting to feel about music the way they feel about digital video content: they want it, they just don’t care if they own it.

The WSJ says Apple’s considered different ways to customize music services before. Here’s how the current idea, again still in the early negotiation stages, would work:

The company has in the past contemplated and abandoned other interactive features, including a Spotify-like service that would have let users rent unlimited amounts of music for a fixed monthly fee. But people familiar with the current talks say they appear to be more serious than those previous tentative inquiries.

As on Pandora, the music would be interspersed with ads, in this case carried by Apple’s iAd platform, which syndicates ads to iPhone and iPad apps.

Building such a service has its risks. While Apple’s success with iTunes is inarguable, its record is spottier when it attempts to build services tangential to iTunes: both Ping and iTunes Match fell flat. And Podcasts, even now upgraded, has some users incredibly frustrated.

But if it wants to avoid being disrupted or out-innovated, it probably feels it has to try something. Apple is very likely aware of its vulnerability when it comes to iTunes: It’s clunky software that encompasses so much more than music: it’s videos, apps, podcasts, iTunes U and more. Apple could be looking for a fresh way to appeal to users who’d rather use a simple, music-focused app customized to their music preferences like Spotify.

Though web radio is popular, it doesn’t make that much money. Luckily for Apple it has a lot of that already; plus Apple might not have a choice if it wants to keep music lovers around.

iTunes’ share of individual songs is still 85 percent of the digital music market. But with the popularity of Spotify, Pandora and others, Apple probably wants to find a way to keep its customers from wandering outside its ecosystem because it has no cloud-based music streaming service. Which is, of course, pretty much Apple’s basic M.O., as seen with the moves it’s made in iOS 6, OS X Mountain Lion and iCloud: don’t give customers a reason to go anywhere else.

  1. How has iTunes Match fallen flat?

    I used it to upgrade a lot of my music library from self rips to higher quality rips, freely upgraded my old DRM iTunes purchases to non-DRM files and have access to my entire music library on my iPhone and iPad.

    It has been a roaring success for me.

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    1. “How has iTunes Match fallen flat?” <– I second that question.

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    2. Travis Henning Friday, September 7, 2012

      I totally agree. Ping was/is not great and it has been well documented in the media, but I’ve not seen any media reports of Match failing to do what it promised or failing to gain traction.

      Could you link to any reports of Match falling flat? I’d be interested in reading other user’s experiences. For $25 it’s worked great for me. I’m on the road at a hotel, want to listen to something but don’t have it on my phone, just use the wi-fi (or if really desperate, cell data) and download it from my library.

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      1. You know, I’m actually encouraged to hear there are staunch iTunes Match fans out there! I don’t know many who are particularly enthused about the service, and I have heard some sad tales of music disappearing or the service giving people fits, so I’m glad to see more positive experiences.

        I would say it’s interesting that you really don’t hear Apple talk about it — if it was a huge hit, they would. You can google for more, but this tale in particular stands out to me from earlier this year of unmet expectations: http://www.macgasm.net/2012/05/04/itunes-match-almost-a-year-later-a-cautionary-tale/

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  2. A lot of what is in that article is poor.
    iTunes Match on iOS needs work: There is a toggle for showing all music or just music locally on your device. I only show local tracks unless I want to pull something down.

    Streaming access: Isn’t an iTunes Match thing at all.

    Store Track List in the Cloud: This is what is currently done. You can freely add and delete from an iOS device without affecting what is in the cloud. When deleting a track from iTunes on the desktop it will ask if you also want to delete it from iCloud. If you choose “no” the local copy will be deleted but the track entry remains in your library available to download again. In fact this is how you upgrade your matched tracks that are lower bitrates than what you get from the iTunes store.

    Make a smart playlist where bitrate is less than 256 and where iCloud status is matched. Delete every track in that playlist without removing them from iCloud. Click on the iCloud download button next to the playlist entry in the library window.

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  3. What happened to the Lala music streaming company acquisition a little over 2 and a half years ago? They discontinued Lala and folded the IP into Apple leaving disgruntled users. It’s funny to see Apple treading this ground again after such a long time period.

    A PC World article that reads like deja vu all over again:

    http://www.pcworld.com/article/183804/what_apples_lala_acquisition_may_mean_for_itunes.html

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  4. There is little incentive to move after years of creating and curating on pandora to a service that could only be consumed in Apple’s ecosystem.

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  5. Reblogged this on #Hashtag – Thoughts on Law, Technology, the Internet, and Social Media and commented:
    Why Apple would want to move into music streaming

    Apple(s AAPL) is reportedly looking to build its own web radio service through iTunes, something similar to Pandora.(s P) Both the Wall Street Journal and the New York Times have reports that say Apple has started talks with music publishers for the appropriate licenses that would allow it to pursue such a service. It sounds like Apple basically is looking to apply its “genius” function to music in the cloud. And with the rise of customized, streaming music services, it’s possible Apple is looking for ways to defend its music turf.

    Share
  6. I would like if Apple create a web radio but also for the european market! I read that this should only wortk in teh USA for the first time: http://www.factitup.com/2012/09/10/apple-working-webradi/

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  7. Dennis Buechau Friday, November 23, 2012

    I think the good old apple platform is not the key to music. iTunes sure it is but music can also buy and listen much more cheaper. For example I found a german platform (http://www.netdealz.de) wher eyou can buy music with coupons and u don’t have to pay anything. I think this is a alternative

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