Shift to digital music streaming as choices increase

Digital downloads are on the decline as consumers turn to music streaming services

Digital downloads are becoming less popular as consumers turn to streaming services such as Spotify

Digital downloads are becoming less popular as consumers turn to streaming services such as Spotify

 

When Apple announced in June that it would be starting a streaming service within weeks, it wasn’t much of a surprise. The company had signalled its intentions when it bought Beats Music back in May last year, and the question was no longer a matter of if but when it would unveil its own service.

Once considered the saviour of the music industry, digital downloads are on the decline as consumers turn to streaming services from Spotify, Deezer and Google, among others.

From Apple’s point of view, signing up consumers to pay almost €120 a year for a music streaming service makes financial sense. Many of these users may not have invested that amount in digital downloads on a yearly basis, plus regardless of how often – or how little – the service is used, Apple still gets paid.

Apple Music began its service on June 30th, but it hasn’t been an easy ride. Before it even made it to its first day of launch, Apple Music had already been hit with trouble. In New York and Connecticut, the state attorneys are looking into the arrangements to establish if Apple had been putting any pressure on labels to favour its service over rivals.

Then there is that much-publicised row with Taylor Swift, where the singer said she would be withholding her 1989 album from Apple’s service due to its decision not to pay artists for songs streamed during the three-month free trial period it was offering to customers. Apple later reversed its decision.

It highlighted once more the differing points of view that the music companies and the artists have and it has been an ongoing problem. Streaming services pay a lot less than downloads, with the artists receiving a fraction of a cent per play on the service. Newer artists could struggle with the level of payments offered by the services, opponents have argued.

It is a fight that has already had some high-profile artists taking up its cause, with both Taylor Swift and Radiohead’s Thom Yorke coming out against the services; Spotify in particular has been singled out for criticism.

The shift to music streaming, from the consumer point of view, makes sense. For €10 a month, you can access unlimited music on your mobile device, rather than paying by the download. Given the average cost of an album on iTunes, it makes discovering music a lot easier for consumers.

There are some caveats though. Most accounts, if they are subscription-based, require you to connect to the internet periodically to check the status of your subscription. You can use the accounts offline by syncing, or storing, music from the service on your mobile device.

That will eat into your phone’s physical storage, as the app needs to store your copy of the track locally. Bear in mind too that it’s not downloading as we knew it – the tracks can only be played in your music service’s app and only as long as you have an active subscription.

You are effectively renting music rather than buying; there’s no way to burn the tracks to a CD for example.

The streaming services will also eat into your mobile data usage if you are using them on the go, rather than on wifi or by listening to tracks already stored on your device. Quite how much damage it will do depends on the service and the quality of the stream you are listening to.

A lower-quality stream comes in at around 64kbps, with mid-range at 96kbps. Higher-quality streams on mobile will range from 160kbps to 320kbps.

Those figures may not mean much, but translating it into real-world usage means that the mid-range stream would get you about 24 hours of continuous usage for 1GB of your data allowance. If you are on a capped plan, syncing the tracks for offline use while you are connected to a wifi network is a good alternative.

The question is, can Apple make a success of music streaming? It is not a guaranteed gold mine. Despite signing up 20 million paying customers to date and passing €1 billion in revenues in 2014, Spotify has yet to turn a profit. The company’s losses have continued to grow, although it remains optimistic that things will improve as its subscriber numbers increase.

Apple, however, has already built up a reputation for forgoing first-to-market advantage in favour of putting out what it considers a better service. In the case of Apple Music, it has a couple of things working in its favour. Apple already has the credit card information of millions of iTunes account users and that convenience factor cannot be discounted.

It will also have its service built into iOS 8, meaning no extra apps to download. Lastly, Apple is also offering a family plan, which allows several people to use one Apple Music account for €15 a month.

The main rivals:

Google Play Music

Cost: 9.99 a month, free service available in US.

Quality: Low, medium and high quality streams on mobile range up to 320kbps.

Play Music has been around since 2011, with the All Access streaming service launched two years later. Initially, it was an online music locker that allowed users to store up to 50,000 of their own tracks in the cloud, accessing them on mobile devices, and a music store that offered tracks for sale. All Access brought streaming music from Google’s Play catalogue to the service for €10 a month, and the integration with Songza added curated playlists and recommendations earlier this year.

Also coming is YouTube Music Key, which is aimed more at the video end of the music market. The service will allow Play Music subscribers to access music videos without ads and also keep playing the music in the background when they need to switch to another task on their computer.

No sooner had Apple announced it would be entering the streaming music market than Google hit back with a free service for subscribers to its Play Music streaming service. The bad news is the free service is only available in the US for now.

Spotify

Cost: Free ad-supported service, €10 month for the premium service.

Quality: 96kbps on mobile, 160kbps high quality on mobile, standard on desktop/ web player, 320kbps for premium subscribers high quality on desktop, extreme high quality on mobile.

Founded in 2006, Spotify has been working for the past nine years to persuade consumers that streaming music is the way forward. It has had some success: at the last count, Spotify had 20 million paying subscribers, with a total of 75 million active accounts.

Spotify is currently fighting back against the Apple invasion by offering two months of its premium service for 99 cents to new users. The company has also hooked up with firms such as Adidas on apps that combines premium users’ subscriptions with a running app to help motivate you, matching music to your pace. It also powers Sony’s PlayStation Music app on consoles.

Spotify’s free service on mobile allows you to shuffle play your playlists and tracks, with limited numbers of “skips” an hour. You also have to sit through some ads occasionally, which is the trade-off for free music. The premium service brings in music downloads for offline use and unlimited listening without ad interruptions.

The service is also offering 50 per cent off additional accounts for family members – not quite matching Apple but it’s a saving nonetheless.

Deezer

Cost: €9.99 a month

Quality: 320kbps for Premium+, 1,411kbps for Elite

Deezer hit the market in 2007 and has now launched in 180 countries. In terms of users, it is trailing Spotify; the company has 16 million active users, with 6 million paying for the service. It offers a free service for PCs and tablets that is ad-supported, with mobile users getting access to to its “flow” music services, which pulls your own library tracks and throws recommendations into it to help you discover new music.

The paid-for plan, Premium+, bumps up the quality and brings unlimited streaming to mobile devices. Users can also download the tracks for offline listening and can import their own tracks to the library to access them on the go.

The music service is rolling out a high quality streaming service, Deezer Elite. Initially offered in partnership with Sonos, Elite brings a streaming rate of 1,411 kbps into the mix and, if you pay your entire year’s subscription for Deezer Premium upfront, it won’t cost any extra.

In the US, it costs $14.99 for new users who want to pay by the month; Deezer hasn’t set pricing for new users elsewhere just yet.

Tidal

Cost: €9.99 for the premium service, €19.99 for the high-fidelity offering.

Quality: 96 kbps, 320 kbps at high quality and 1411 kbps lossless.

Where do you start with Tidal? It’s the pet project of Jay Z, who bought its parent company Aspiro for $56 million in January.

The company prides itself on being artist-owned and offering a higher quality service, with “founders” including Chris Martin, Calvin Harris, Beyonce, Nicki Minaj and Daft Punk. The hook for subscribers is the exclusive content you could get by signing up to Tidal.

So far, it has managed to sign up more than 770,000 subscribers, although it doesn’t say how many of those have opted for the more expensive €20 a month plan.

The service itself has been somewhat overshadowed by the cringe-inducing press conference that saw Alicia Keys quote Nietzsche in, what must have been in her head at least, a rallying speech to the troops, before they all lined up to one by one sign the Tidal declaration. It was a display that was, inevitably, ripped apart online.

That’s not the only trouble Tidal has had. In April, 25 employees left, including its chief executive Andy Chen. Then in June, it emerged that the interim chief executive had also departed.

The negative press around Tidal even moved Jay Z himself to defend the service, saying Tidal was doing just fine, followed by a second rally when he rapped disparaging things about Tidal’s rivals. We’re not entirely convinced.

Also look out for: Rdio, Qobuzz and Xbox Music.

Apple Music: Getting started

You’ve downloaded the latest iOS update and suddenly there it is: Apple Music. The streaming service is built into your regular music app, sitting alongside your purchases from iTunes and the music you’ve ripped from your CDs.

Getting started seems easy but it can take a while to inform Apple exactly what music you like. When you begin, you’re offered a number of music genres in floating bubbles.

You tap the bubble once if you like the music, and it expands; twice if you love it and the bubble grows more. Tapping and holding gets rid of genres you really don’t like.

Then you can add specific artists to give Apple Music a better idea of where your tastes lie. It’s time consuming, but if you want Apple to come up with the best recommendations for you, you have to suffer through it. You can go back later and edit this in the account tab.

Once in the app, you have a few tabs to choose from. “For You” takes those artists you liked and turns them into recommendations. “New” showcases the new music on the service. “Radio” allows you access to Beats 1 and radio stations for specific genres like Irish hits, pop and so on. “Connect” puts you in touch with artists, another of Apple Music’s main selling points. “My Music” is pretty much everything else.

For the most part, Apple Music matches services like Spotify and Deezer when it comes to streaming music. One or two things irked though. It crams so much in, it can be difficult to find what you are actually looking for through the noise. And creating playlists is less intuitive than other services. You need to create the blank playlist first before you can add songs to it; often, I create playlists within Deezer, for example, as I find songs.

Will Apple Music persuade Spotify fans to switch? That family plan (€14.99) is tempting, but extras such as Connect and even having Taylor Swift’s new album may not have the sway the company was hoping for.

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