Streams Up, Buys Down

That’s the current state of the music industry, and the flux will keep going streaming’s way. I don’t get it myself — I like to own my tunes — but it’s clear that if I’m not in the minority yet, I soon will be.

Which brings us again to Apple’s Beats acquisition.

Tim Cook said of Beats Streaming, “We love the subscription service that they built—we think it’s the first one that really got it right.” Keeping in mind that the iTunes Store began its own streaming service last year (free with ads, ad-free for jillions of iTunes Match customers), which Cook, I presume, includes amongst the services which didn’t really get it right. Apple execs don’t often admit mistakes, even obliquely.

I’ve tried the iTunes streaming service (iTunes Radio), and it’s predictably slick and with a nice front end — at least on Apple TV which is the only place I’ve used it. If it hasn’t taken off, some of the blame might be that it’s trapped inside the iTunes store. It should have been spun out as a standalone app, right on the first page of every new iPhone and iPad. People don’t go looking to stream music from a music store, just like they don’t expect to find a lending library in the middle of a Barnes & Noble. That was a big strategic error right at launch, although I understand iTunes Radio will be a standalone app when iOS 8 debuts later this year.

But it’s difficult to recover from a ill-conceived product launch.

iTunes Radio was also supposed to serve as a means to get people to buy their music off the iTunes Store. “Hey, I like this new song!” and then click on the in-app link to pony up the 99¢ to own it. That was a misread of streaming customers’ intentions and desires. Besides, music sales are a vanishingly small fraction of Apple’s bottom line, so there is really no big need to try to awkwardly bolster them via Radio.

So where does Beats come in?

If iTunes Radio is spun out of the iTunes Store, then it would be very awkward indeed to put Beats Streaming up as a default iOS app, too, creating the kind of consumer confusion (“WHICH APP SHOULD I STREAM FROM???”) Apple is famous for avoiding. If Apple doesn’t make Beats a default app, then they won’t be able to fully exploit their semi-captive iOS market to grow Beats Streaming into a serious player.

From there, things get really complicated, when you remember that Beats will continue to function on Android devices, but that Android owners can’t buy off the iTunes Store. And there’s no way in heck Apple would open the iTunes Store to non-Apple devices.

So it looks like the company will have two standalone streaming apps. One, iTunes Radio, for people who like what Cook admits is a second-best app — but which will help drive iTunes Store sales. The other, Beats, which will be cross-platform — but which will not help drive iTunes Store sales.

I’m not much for giving advice to someone as smart as Tim Cook, but I’ll offer my two cents this time: Shut down iTunes Radio, make Beats Streaming a default iOS app, and connect Beats to the iTunes Store for iOS owners only. Android users would still get the full Beats experience of curated playlists and all the rest, while Apple’s iOS customers would get the added convenience of the iTunes Store — without the confusion of two default apps with overlapping functions.