As Apple celebrates 10 years of its streaming music service, Austin Carr says it’s worth taking a look back at how it came to replace the iTunes marketplace and what that story might mean for the future of the App Store. Plus: Climate change is shaking up the olive oil industry, and Dubai chocolate is just the beginning for pistachio lovers. If this email was forwarded to you, click here to sign up. Ten years ago today, at a splashy event featuring Drake and The Weeknd, Apple Inc. introduced its subscription-based music streaming app. Apple Music was a huge deal, a preview of Chief Executive Officer Tim Cook’s push into subscription services and a sign of how aggressively Apple was willing to take on Spotify Technology SA to reclaim its dominance over consumer listening habits. A decade later, Apple Music serves a stark reminder of why the iPhone maker is so intent on maintaining control over digital distribution on its platforms. Before rising competition and changing business models forced Cook to roll out Apple Music, its predecessor, the iTunes Store, was the only game in iTown, enabling the company to take lucrative cuts on every song and album purchase and imbuing the brand with an unprecedented cultural relevance. Now, with its equivalent software marketplace facing intense scrutiny and new rivals, it’s possible the App Store may suffer a similar fate as iTunes. With today’s music consumption split across Amazon, Spotify, YouTube and a slew of other content services, it’s hard to remember just how influential Apple was in the music industry. Steve Jobs’ early 2000s success with the iPod offered salvation for Napster-hating record labels, reestablished Apple in mobile hardware and transformed it into a tastemaker. The iTunes Music Store, launched in 2003, made song purchases fast and easy, with each one costing about 99¢, of which Apple kept an estimated 27¢ to 37¢. Jobs introduces the iTunes Music Store to parts of Europe at a June 2004 event in London. Photographer: Ian Waldie/Getty Images Apple was soon selling millions and then billions of songs through iTunes, and Jobs sought to ensure rival music stores had difficulty accessing his iPod customers. While iTunes gave Apple a flowing river of nickels and dimes, it also drove sales of higher-margin hardware, letting Jobs further control the end-to-end product experience and providing Apple with years of iconic marketing campaigns. The iTunes store, which offered audiobooks, movies and TV shows as well, became a giant retail hub on Macs and Windows PCs. Eventually, the influence of iTunes waned. The growth of the iPhone largely depended on the growth of third-party apps on its operating system—Google Maps, Netflix, etc.—even if Apple already had or subsequently introduced competing equivalents. Spotify subscriptions caught on in the 2010s, and consumer preferences soon shifted from à la carte to all-you-can-eat consumption. For $9.99 a month in the US, Spotify users gained virtually unlimited access to tens of millions of songs. Cook followed suit with Apple Music in 2015. At first, Apple tried to save iTunes by merging the song subscription and download experiences, but users found that confusing. A few years later, iTunes was discontinued on the Mac as a standalone app and effectively became a mere tab within a desktop version of Apple Music. Today, if you open the iTunes Store app on your iPhone, you’ll still find ways to purchase individual songs, but the storefront is filled with promotions for Apple Music. If you click on the buttons for movies or TV shows, they will redirect you to the Apple TV app. Apple Music eventually grew popular thanks to the company’s continued device and marketing reach. But streaming music is generally considered a less profitable business than one-off album sales, and Apple Music remains behind Spotify in market share (and arguably less culturally influential than other music-adjacent apps such as TikTok). More significant, the decline of the iTunes Store resulted in a huge loss of ecosystem control for Apple. As a Spotify and YouTube addict myself, it’s remarkable how little I associate music with Apple these days, despite living for well over a decade in a world of iPods and iTunes and white-wired earbuds. A similar dynamic is playing out with Apple’s App Store, the seeds of which were planted in the iTunes era. The comparison isn’t perfect, but cracks are showing in Apple’s once-impenetrable system for taking up to a 30% cut on software sales, just as they did before with song sales. Similar to how musicians found new distribution channels for their songs, developers are exploring new distribution avenues for their apps. Rival marketplaces are emerging with different business models, and artificial intelligence services are reshaping the very notion of how users can interact with apps. Unless Apple figures out how to adapt, the App Store risks an iTunes-like future. I, for one, opened the still-existing iTunes music player on my Windows PC for the first time in forever while writing this newsletter, and it felt like being transported back to the days of Yahoo and Internet Explorer. My music library is filled with nearly 1,000 forgotten songs, which likely cost me nearly $1,000 over the years through iTunes. But looking back at my receipts, I see that in the past seven years, I’ve spent exactly zero dollars on songs through Apple. It’s probably high time I delete its music apps. |