The Uncertain Future of ITunes
Apple has big plans to update and redefine iTunes, but strangely enough the most positive sign of what’s to come is how the company is making everyone wait for it.
All Quiet on the ITunes Front
ITunes hasn’t been the centerpiece of any of Apple’s lavish announcements for quite some time. The iTunes experience had modest updates on Macs and PCs, but the service hasn’t had any real shake-ups or attention since consolidating its dominance of the digital music market.
In fact, Apple has increasingly moved customers away from dependence on the service, with introductions like iCloud and wireless back-up and syncing. Gone are the days where users had to routinely connect their iPhone, iPod or iPad with iTunes in order to transfer songs and download updates, relegating the service on computers to little more than a music player.
But Apple’s initial announcement of iTunes 11 in September promised major changes to the service, like iCloud integration, a redesigned interface and a new mini player, all certain to give iTunes a boost. They represent more of a polish to the service rather than a fresh injection of something new, but they also hint more is coming.
However, Apple has delayed iTunes 11 to the end of November, saying it needed to fine-tune its offerings. While the wait is likely a sign of caution from the company, it’s also the clearest sign yet that there is more to this update than meets the eye. Many analysts believe Apple will launch iTunes 11 with a streaming component, but streaming is more than likely on its way and the company is taking its time to ensure it has its core product working correctly before expanding into new territory. Backlash from Apple’s early missteps with the debut of iOS 6 and its Maps app are only now starting to subside, and launching a buggy version of iTunes so soon after would be a public relations nightmare, dampening the launch of a highly anticipated streaming service.
Answering the Threat of Pandora and Others
A streaming service from Apple is no surprise, considering how digital music consumption has shifted in the past few years. Services like Pandora Radio have been outshining iTunes, particularly on mobile devices, for some time now. The ad-supported app lets users stream 40 hours of music a month off of customized radio stations. A Pandora member can select the artist or artists they wish to hear and enjoy an uninterrupted stream of music from them and similar artists.
Pandora streamed 4 billion hours of music from more than 20,000 different artists last year, and those numbers are expected to be much higher for 2012. The irony is that much of this listening is being done on iOS devices. One can imagine this doesn’t sit well with Apple, a company that prides itself with guiding the digital revolution of the music industry.
With the success of Pandora and other streaming services like it, iTunes feels dated in a way that simple aesthetic changes and iCloud integration cannot repair. The task of transitioning the iTunes juggernaut into a new era now falls on the shoulders of Eddy Cue, Apple’s senior vice president of Internet software and services, to adjust the company’s passive state in the streaming business. Cue is the mastermind behind all of iTunes’ past success and its surge to becoming the world’s largest music retailer.
After the dismissal of Apple’s senior vice president of iPhone software Scott Forstall, Cue is faced with more responsibility than ever as he attempts to once again make iTunes relevant for more than buying and playing music. Cue’s assumption of many of Forstall’s duties is key to the next step of iTunes. With Forstall’s departure, Cue is now a leader in the division of iOS as well as iTunes, and he has the opportunity to marry a new mobilized version of the service with his vision for the product on computers like never before.
Why Apple is Waiting
Many have wondered why it has taken so long for Apple to dip its toe into the music streaming arena, leaving Pandora, Spotify and others to enjoy its benefits. Part of the answer is licensing agreements, which Apple is reportedly working hard on hammering out right now, but another theory hinges on the recent executive shuffle at Apple.
Analysts know Forstall had issues playing nicely with others inside Apple. This divide may have kept Cue from implementing his full vision for an iTunes streaming service, which would likely have a large iOS component that requires working closely alongside Forstall. With this divide now lifted, Cue is free to build the new service as he pleases, speeding up the process for an iTunes streaming component.
Still, Apple has no need to rush a service to market. Analysts believe a streamer from Apple could launch as soon as early next year, but the company can only benefit from taking its time in this area. Pandora and others may have a head start on Apple, but with such a large iTunes user base, the streaming service business is Apple’s for the taking, as long as it can produce an app that works better than the competition. Granted, that’s easier said than done, but if the company can create an experience that matches or exceeds what customers get on Pandora, everything else will take care of itself.
From there it comes down to Cue and his team. Apple needs to capitalize on what Pandora doesn’t do well. Things like limited skips, songs cutting out when a user loses cell service, integration with iOS, social networking components and the size of the music libraries the customized stations pool from are all areas of opportunity for an iTunes streamer.
Apple has sold more than 400 million iOS devices, and as of earlier this year, claims to have 435 million iTunes accounts registered with active credit cards. All the company has to do to leverage this massive user base is put a free download in the App Store. If it really wants to attract customers, it can make its streaming service a native app in the next version of iOS. This could almost instantaneously erase Pandora’s multi-year head start in building user numbers
Cue has been handed a lot of responsibility as he attempts to carry the iTunes brand further into the mobile and streaming revolution. The stage has already been set, and he just needs to perform.
