Apple recently launched a new service called iTunes Radio that gives free, advertising-supported music streaming to their products. Its biggest competitors are Spotify and Pandora, which have both been hugely successful. Apple has a huge influence on the global music industry; iTunes is responsible for a significant amount (~70%) of all digital music sales.
It’s obvious why Apple chose to move into the streaming music space – it is proving to be a popular way to listen to music, and is probably taking a lot of sales away from iTunes and other “pay per song” services. Of course now Apple is involved it’ll probably get more attention from traditional iTunes customers and so we’ll start to see more of a shift towards music streaming services.
Is this good for the music industry though? Arguably not, given the very small amount of royalties paid to artists for each stream. Whereas an artist would get ~$1/song (assuming no record label cut) with a download, they might get less than a cent for each stream. It’s great for consumers – pay one fee for as much music as you can listen to, but it might reduce the amount of money artists make from digital music.
