It’s not much of a secret that Apple is set to launch a new streaming music service at WWDC next week.
There’s not much money in it either, says Piper Jaffray’s Gene Munster. Apple has about 300,000 paying subscribers and Spotify has 15 million. In note to clients Wednesday, Munster does the math:
“With the $10 per month expected price for the new streaming service, even if Apple were to grow its paying streaming music subscriber base to match Spotify’s 15 million (which we view as highly unlikely), it would add less than 1% to revenue in 2016.”
Despite the impression left by last year’s $3 billion acquisition of Beats, Apple’s not in it for the money.
It’s got bigger problems. Streaming has caught on.
iTunes — the music downloading service with which Steve Jobs pulled Apple back from the brink — is dying. Despite rapidly growing iPhone sales, income from Apple’s digital media offerings (music, TV, movies, books) is falling. Last quarter, according to Above Avalon’s Neil Cybart, it was down 4% year over year.
As I see it, Apple is going into music streaming for the same reason Amazon points users to its competitors’ lower prices. Amazon wants to be your one-stop shopping site. Apple wants to be the place the kids go to get their music.
Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple (AAPL) coverage at fortune.com/ped or subscribe via his RSS feed.
