iTunes Radio may be an example of Apple's embrace of "disruptive innovation"

Monday, September 9, 2013 - 11:45am

Apple tomorrow will hold its press event at which (most expect) it will unveil its new iPhone models. Shortly thereafter, the new mobile operating system will go live, and with it, the long-awaited iTunes Radio Internet radio service (more in RAIN here).

ITunes Radio represents a shift in direction for Apple's music interests. Apple's most successful musical service, undoubtedly, has been its iTunes Music Store, with which it has become the world's largest music retailer. And while iTunes Radio doesn't mean Apple is abandoning download sales by any means, it likely shows that Apple understands the "disruption" in music consumption, as music moves from a "product" to a "service." Billboard's Glenn Peoples (online, and in further detail, in the magazine) describes Apple's move in terms of Clayton Christensen's influential book The Innovator's Dilemma.

[RAIN publisher Kurt Hanson has written and spoken about applying the book's ideas in Internet radio in the past, like here and here.]

Peoples wrote: "In order to succeed in the streaming marketplace, Apple has to risk killing the music download business it has dominated for the last ten years. With the launch of iTunes Radio, Apple shows it understands the future of music is streaming. iTunes Radio is not necessarily an iTunes-killer -- Internet radio is generally believed to complement music purchases -- but is a first step toward the kind of streaming service that could eventually replace the iTunes Music Store."

Read more online here.

iTunes Radio will broaden iAd offerings to audio and video, so Apple's staffing up

Thursday, September 5, 2013 - 9:00am

Apple is reportedly beefing up its sales force as it expands its iAd mobile advertising network and readies its iTunes Radio webcasting service.

AdAge reports (hat-tip to Tom Taylor, who covers the story today in Tom Taylor now here) Apple posted want ads on its job board for five iAd-related jobs, plus another 35 to LinkedIn in August alone. Apple's job openings include account coordinators, ad design managers, project managers, and engineers to create new rich media ads for iAd. The company is also hiring ad execs with creative experience to work with advertisers and agencies to create better ads.

AdAge's coverage links to an eMarketer report from June projecting iAd U.S. revenue growth from $213 million this year to $376 million in 2014 and $623 million in 2015.

Apple will hold a special media event on Tuesday, reportedly to unveil two new iPhone models. Observers believe the new mobile operating system, iOS 7, will go live a week or so later, and with it, Apple's heralded iTunes Radio Internet radio service.

Read more in AdAge here.

Profit may not be Apple's goal for iTunes Radio, but it wasn't for the iTunes Store either

Monday, August 26, 2013 - 11:05am

Given the high cost of operation and mounting losses of industry leader Pandora, analysts have suggested that Apple's intention with iTunes Radio isn't about profit -- (it may not even be about Internet radio at all).

"It’s about keeping its users from other Internet radio products," wrote's Diane Bullock. "If Apple can provide this in-demand service to its iOS faithful, they won’t be tempted to stray and find themselves in the open and exciting arms of threateningly hip startups. Being all things digital means the cult of Mac won’t have to worry about defectors bolting for the door."

Consider: most potential listeners already have an iTunes account. The new service will be preinstalled on iPhones and iPads with iOS 7, iTunes for OS X and Windows, and Apple TV. And if a listener is signed in and ready-to-go, why launch another app to listen to Net radio? 

You may remember that the iTunes store itself had "break even" as a goal in 2003, and was launched to help sell iPods. After just five years, the store became the the leading U.S. music vendor. It now accounts for 64% of the world's online music sales, generating 15% profit on sales of $13.5 billion.

For the Internet radio product, Apple may have already laid the groundwork for some nice revenue. With blue-chip advertisers lined up before the service even launches, some paying tens of millions for year-long ad campaigns (see RAIN here), Apple may indeed end up exceeding expectations. They've done it before.

Read the Minyanville piece here.

McDonald's, Nissan, Pepsi among inaugural iTunes Radio ad partners

Wednesday, August 21, 2013 - 1:10pm

AdAge reported late yesterday that Apple's iTunes Radio webcast service will launch to the public next month, with a host of top-name advertisers to support it.

Several sources last week reported Apple will unveil its next iPhone at a special event on September 10, so it's possible the radio service will go live then (or shortly thereafter) as well.

Listeners who don't subscribe to iTunes Match can expect to hear ad campaigns from McDonald's, Nissan, Pepsi, Procter & Gamble, and more. (iTunes Match subscribers will get ad-free streams.) AdAge says some advertisers will also have curated streams with fewer ads.

The service will run audio and video interstitials (videos will run when the user interacts with the player), and "slate" ads, which AdAge says are "interactive display ads that will take over whatever screen the consumer is using." Audio ads will come every 15 minutes of listening, video ads once an hour (when the user interacts with the player).

RadioInk wrote in its reader e-mail: "Imagine you are about to launch a new format -- and advertisers were falling all over themselves to be a part of it. Dream on. For radio, it's typically the opposite. Prove people listen first, then we'll buy. That's because radio is not Apple. Without any history of success or understanding of whether consumers will accept the new product, it appears several major advertisers are ready to roll out with iTunes Radio when the new platform launches this fall."

Indeed, AdAge reports the launch deals fall between "the high single-digit millions of dollars to tens of millions of dollars and include a 12 month advertising campaign..."

Read AdAge's coverage here.

Pandora expects Apple Net radio play to bolster webcasting at AM/FM's expense

Wednesday, August 14, 2013 - 1:20pm

Pandora CFO Mike Herring told investors Wednesday he expects Apple's iTunes Radio debut to benefit, not hurt his company's audience... and, as CNet paraphraed, "accelerate the move to [digital radio] from traditional broadcast radio."

"When iHeartRadio launched a couple years ago, we had the same questions," Herring told the Canaccord Genuity Growth Conference. "We've gone from 50% market share to 70% market share, and they've stayed flat... We won't do much different."

CNet does point out, however, that Apple has a huge advantage over Pandora when it comes to global reach. Apple's direct licensing deals with labels and publishers "generally give it rights to the countries where iTunes operates, numbering above 100." Pandora currently operates only in the U.S., Australia, and New Zealand.

Read more in CNet here.

Apple said to be developing method for embedding links in audio itself

Friday, August 9, 2013 - 1:00pm

With a patent filed last year, Apple seems to be working on a way to embed links or other device instructions in audio files -- not in the metadata, but in the audio signal itself.

This "audio hyperlink," reports TechCrunch, "would use audible or inaudible signals embedded in a music or other audio track to link out to other media, or to perform some function on the device when encountered."

Imagine listening to a podcast, and the speaker makes note of a particular picture or graph. The link embedded into the audio could display that image at the right moment -- sort of a Powerpoint-type experience. Or, it might be a way to better associate liner notes and "purchase" links with music files.

By embedding the information into the audio itself, the link could become more portable (not subject to metadata changes or deletion), but not impossible to destroy (through transcoding the audio itself, one could imagine).

TechCrunch suggests could make "audio files into something truly interactive, and better-suited to the multimedia-rich mobile platforms that exist today."

Read more here.

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