Since Apple’s big iCloud announcement a couple of days ago, the internet has been abuzz with people expressing disappointment at the iCloud not going far enough when it came to music (like here, and here). What did Apple miss? Streaming.
Broadly, there seem to be two camps of people when it comes to music listening preference – one that prefers listening to streaming music (via services like Rdio, Spotify, Pandora, Raaga, Saavn) and the other that prefers owned music played locally on their computers, mobile phones, media players or other devices. But even those who prefer owning music (like I do), probably use streaming as an option to discover and sample before they buy.
So, regardless of your listening preferences, you may feel that iCloud missed the bus by not allowing streaming of music via subscription. Amazon Cloud and Google Music Beta also missed that same bus, by the way. They allow streaming but only of the music you already own. In fact, Amazon actually charges you for it. (Duh?!) Google has conveniently not revealed its pricing.
Coming back to iCloud. Streaming of purchased music may not make sense, but why not give customers the option to stream music they don’t own as well as buy songs if they choose to?
My guess is that it could be due to the following reasons:
- Profitability – Apple has a predictably profitable model of selling music through iTunes. On the other hand, streaming services have struggled for profitability, whether it’s the ad-supported Pandora, or subscription-based Spotify. And while streaming services are becoming increasingly popular, they still do not represent a sizeable enough market for Apple to be interested (not yet at least).
- Risk – iCloud is going to put considerable pressure on Apple’s resources (including their cloud infrastructure) and they know it. Why do you think Steve Jobs showed off the pictures of their huge server farm? Apple wants to come back strongly after MobileMe’s failure (Steve Jobs described it as “Not our finest hour” in the keynote at WWDC), and is not willing to take on the risk associated with the burden of streaming music.
- Concerns around bandwidth usage – A few days ago, I wrote a post about why 3G economics don’t work for streaming music in India. According to Paul Lamere, a music+tech guru and a passionate supporter of music subscription services, people in the US can get an unlimited 3G data plan “for the cost of a good meal”. That may be the case today but even in the US, people are becoming more aware of their rapidly increasing mobile bandwidth usage and carriers are shutting down unlimited data plans. Perhaps Apple believes that the consumers’ and the carriers’ increased sensitivity to bandwidth usage may adversely impact the streaming music market.