Apple Likely to Compete With Subscription Music Services Soon

Apple appears to be looking to create its own subscription-based music service, according to the Wall Street Journal (paywalled article).For years, Apple founder Steve Jobs resisted the subscription, cloud-based music streaming model, saying consumers preferred to own their music. For a long time he was right, but the advent of subscription sites Pandora, Spotify and Rhapsody is changing consumer expectations.The move might also be a reaction to news that the actor Bruce Willis is reportedly suing Apple because he can’t bequeath his music collection to his three daughters. Apparently, even though Jobs said people want to own their music, iTunes terms of service says that consumers are “borrowing” the tracks from iTunes and upon their death, the account cannot be transferred.This puts Apple in a very tight spot. They don’t want to make their music transferable, but subscription sites have had a hard time of lately. Pandora lost $1.8 million in revenue last year, despite impressive growth. Meanwhile, Spotify is struggling to be profitable, despite making an estimated $195 million from subscriptions last year. And radio aggregator apps are becoming a serious competitor for subscription sites.This is not to say Apple will inevitably fail; the company got people to buy digital tracks when Napster was still letting people download bootleg copies. But of all the subscription niches, music streaming seems to be the toughest business nut to crack.

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