It’s hard to speculate on Apple’s “iRadio” before there’s an “iRadio” to speculate on. But one day it will be announced any day now, so here goes nothing.
Conventional wisdom says: Yikes, Apple is big! Pandora and Spotify are screwed!
Yes, Apple is a Big Fish. But companies like Pandora and Spotify already face down Google and Amazon – firms with footprints as big and broad as Apple’s. Even though their music platforms can’t compare to Apple’s their advantages are extensive in many other areas that nurture the ties these companies have with their consumers. And it’s the strength of consumer relationships combined with how well (or poorly) existing options satisfy their desires that dictate how sticky or loose those consumers may be for new services.
Think it’s only size that matters? Consider the impact Apple’s iBooks has had on Amazon’s e-book sales (by one report, Amazon now has “merely” 60% of a market that is growing fast. Thank you, Apple!) Or consider Amazon’s movies on demand and the impact that feature has had on rival Netflix (hint: Netflix’s CEO uses the term “no material impact”). Ah, the on-demand video market keeps growing. Thank you, Amazon!
Yes I know, neither Google nor Amazon have the advantage of iTunes but I wouldn’t be so quick to point that out as an advantage. Is there anyone who doesn’t consider iTunes to be, well, clunky?
Besides, shopping for music and listening to a radio-like stream are not the same thing – they address somewhat different needs, so the base of users for one doesn’t necessarily mean an equal sized base for the other, let alone a swap between them. Hey, if everything iTunes touches turned to gold then we would all be using a gold-plated service called Ping right now.
Meanwhile, there’s this thing called “the advantage of the incumbent.” It’s why we as a nation keep electing pretty much the same politicians one election after another. iRadio’s value proposition will have to be significantly richer than what one can get from Pandora or Spotify in order to dent their momentum. Maybe it will be, but I’m not so sure. Check to see if people say “I prefer iRadio over Pandora because….” and I mean real people, not people with tens of thousands of Twitter followers who blog about technology.
And then there’s the issue of simplicity. This is something Apple has historically specialized in, but the more complex Apple’s ecosystem becomes the more attractive “simple” alternatives like Pandora become. Back at ya, Apple!
Frankly, I think it’s quite likely that Apple’s entrance into the space enables other streaming radio outlets to grow faster than they already are.
What?! Do I mean that a big new competitor to Pandora might make Pandora bigger even faster? Why yes, yes I do.
We have not nearly exhausted the potential for online radio usage. We are still in this game’s early innings. The legitimacy that Apple brings to this space will bring lots of new consumers to the table, and they will want to sample all the wares.
If I’m right, what’s good for Apple is good for Pandora and Spotify, good for consumers, and good for advertisers who venture boldly into this new marketplace.
You know, it could even be good for radio.
Thank you, Apple!