Photograph by Sebastian Kahnert/picture-alliance/dpa/AP

The music streaming space might seem crowded, but new options from Apple and Google offer reasons to be optimistic.

By Dan Reilly
June 30, 2015

June 2015 marks the entries of tech behemoths Apple AAPL and Google GOOGL into the already competitive music streaming world. Both companies will offer consumers more alternatives to Spotify, Pandora, and Tidal, while giving artists and labels even more ways to make money. Thanks to some new features and inherent advantages, these new additions to the market have a lot of promise for users looking to try something new, and musicians hoping to get paid.

After the Taylor Swift-inspired brouhaha about artists not getting paid during Apple Music’s three-month free trial period, the company finally relented earlier this week. Moving forward the service will pay 71.5% of its $9.99 monthly subscription revenue, according to Robert Kondrk, the Vice President of iTunes Content.

In comparison, Spotify pays out 70% of its revenue, but the actual amount varies based on how many of the streams came from free or paid users (the company has revealed some facts about its payment variables, but doesn’t offer specific numbers). Of course, in both cases, it’s unclear how major labels will be compensated compared to indies under the deal, despite the fact that many of the world’s top independent organizations only recently agreed to Apple’s terms.

At launch, Apple Music is fairly light on features that differentiate it from Spotify and the competition, but there are a few unique features that make it standout. For starters, it’s pretty cool that you can ask Siri random questions like “Play the number one song on the day I was born” or “play that song from the movie Selma.”

 

We’re not sure how far users will have to go to stump Siri, but we’re willing to find out. Other bonuses include the option for a $14.99 family plan that lets six people share one account, some curated content and exclusives from artists and influencers (Taylor Swift’s 1989 and Beats founder Dr. Dre’s The Chronic will be made available). Also Connect, a social platform that allows fans to interact with each other and artists will also be included in the service.

The release also coincides with the launch of Apple’s new radio station Beats 1—featuring former BBC personality Zane Lowe and celebrity hosts like Elton John and St. Vincent—and the expansion of cloud-based storage system iTunes Match, which will now let users host up to 100,000 songs in the ether.

But, Apple’s clearest advantage is that there are hundreds of millions people who already own the company’s devices. After a quick upgrade, available at 11 a.m. EST on June 30, anyone with an iPhone, iPad, or iPod Touch can sign up for the service, which will likely have a similar iTunes interface. Given the service’s ability to store music offline, why go to the traditional store and download a full album for $9.99 when you can pay that much for a full month of saving any record or group of songs you want?

The savings (and convenience) is likely to attract a large number of people who’ve never used streaming services before, on top of those who will convert from Spotify, Tidal, and Rdio. Never underestimate the power of streamlining.

For now, Google Play Music’s biggest advantage is that it’s sticking with an ad-supported free option. The gratis version only forces users to suffer through a pre-roll ad before listening and never any commercial interruptions while enjoying a number of radio-like options. Similar to Pandora, users can create a station based on their favorite artists, YouTube videos or even take advantage of a seemingly endless, ever-evolving, human-curated playlists.

Based on technology developed by Songza, a company Google acquired on July 1, 2014, users can select streams based on their mood, situation, time of day, genre, and much more. Examples include “Happy Hour Indie Rock,” “A Breezy Beach Trip,” “Evening Jazz,” or, for individuals looking for workout tunes, “Fast-Paced Rap.” Users can also choose a number of genres and artists, and create an “I’m Feeling Lucky” station based on past preferences.

Three main drawbacks are that users can only skip a handful of songs in a given time period, aren’t told which track is coming up next, and the personalized stations take a little bit of trial and error to match your tastes.

Of course, Google offers a number of enticements to upgrade to the $9.99 per month model. With that, you also get access to on-demand streaming from the entire 30-million-song library, which is comparable to that of Apple, Spotify, Tidal, etc., and also roughly 30 times the size of Pandora’s.

Other premium perks include offline listening and cloud storage for up to 50,000 songs (including ones downloaded via other services). It also includes access to the YouTube Music Key, a secondary service that lets you stream music videos without ads, play them in the background on your mobile device, and download them for offline viewing.

 

Google has an undisclosed pay-out deal already in place, but claims it’ll compensate artists at a comparable rate to Apple and Spotify. Tidal, for all its hoopla about paying musicians four times as much and offering high-resolution songs for $19.99 a month, still has less than a million users and just fired yet another CEO, so its relevance and status as a major player in the streaming space is waning.

Regardless of that, the diversity of options—Google’s free model and YouTube integration, and Apple’s three-month trial period, built-in iOS audience, and Taylor Swift endorsement—certainly means more people will adopt streaming in lieu of buying physical albums and digital downloads.

Given fair royalties and the added exposure from the discovery features each service offers, there are a lot of reasons for smaller artist to be optimistic. Streaming won’t line their pockets, but—combined with actual talent—the exposure should lead to a bigger, more loyal fan base that might pay for a full album, concert tickets, merchandise, etc.

Of course, this is all a brave new world for the music industry, the first entertainment sector to really feel the brunt of online piracy and try to figure out a transition into a sustainable, hopefully profitable survival.

Missteps from one or more of the big-name streaming companies are guaranteed, some will thrive while others will fail, upstarts will invade and transform the space, and there will be plenty of advocates and naysayers along the way. For the immediate future, there’s plenty to be excited—and a tad wary—about.

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