Apple Music Case Study

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Apple Music Apple is a revolutionary company in digital music and has changed the structure of recorded music market with iPod and iTunes in the 2000s. Apple’s iPod and iTunes have led digital music market as the leading provider of MP3 players. However, Apple is now a newcomer in streaming music market with Apple Music, launched in 2015.
Since 2005, global digital music revenues have been growing so fast (Exhibit 1-a Global Recorded Music Industry Revenues 2005-2015). Especially, streaming is the fastest growing revenue source in the industry; music streaming revenues increased 45.2 percent to $2.9 billion in 2015 (Exhibit 1-b Streaming Growth Year on Year 2011-2015). Global streaming revenues (43 percent) is now close to overtake downloads
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Apple music has grown much faster than Spotify; Spotify took six years to reach 10 million paid subscribers. Then, Apple Music’s new strategies helped to compete with other streaming services. Apple Music started to release exclusive content and decided to offer a student discount that led new users to sign up.
Spotify is still a leading music streaming service in the world and has confirmed that it has over 100 million active users in June 2016. Once Spotify hit 10 million, it took only one year to reach 20 million paid subscribers. Both streaming services are adding over 1 million subscribers per month on average. As of July 2016, Spotify has 30 million paid subscribers worldwide while Apple Music has 15 million and Pandora has 3.9 million paid subscribers (Exhibit 3 The State of Music Streaming).
However, it is a big advantage that Apple Music is available in over 100 countries and it is still expanding its service territory. Spotify is operating in 60 countries and Apple Music is now available in 115 countries, including 60 countries where Spotify is not available. On August 3, 2016, Apple Music launched its streaming service in Israel, which made its total market counts to 114 countries. The day after, Apple Music has reached 115 countries by expanding in the eighth biggest recorded music market: South
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Without any discounts or benefits, all-access membership (monthly) is available at 10,900 won in MelOn , 7,000 won in Genie , and 9,900 won in Bugs ($1 is approximately 1,170 won as of November 29, 2016). But, these Korean digital music providers offer discounts and benefits so users can subscribe at much cheaper prices than Apple Music. Apple Music US provides its streaming service at $9.99 per month and it became a standard price in the global music market. Spotify and Google Music also provide streaming services at $9.99 per month as well. However, Korean digital music providers are operating its membership services competitively so the actual standard price for streaming services is about $5 per month. As of August 17, 2016, Apple Music Korea hit 60,000 users and this number is 0.24 percent of the Korean customers by 24.6 million. Local market leader, MelOn hit 2.9 million paid subscribers, followed by Genie with 960,000. Apple Music Korea ranked ninth among digital music providers in South Korea. In addition, MelOn has 28 million users according to the Korea

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