Apple is about to make a play to capture a huge part of the music industry
The Wall Street Journal has published an article looking at Apple's upcoming streaming service, and the industry that it's launching into.
Here's a key statistic from that Wall Street Journal story: Apple sells up to 85% of music downloads worldwide. That's a huge number, and it shows that iTunes dominates paid music downloads.
But there's a problem looming for Apple: Music downloads are dying. The industry is moving away from paying for music files and keeping them on your computer or smartphone - instead streaming is becoming the most popular way for people to consume music.
Here's a chart that illustrates how streaming is overtaking downloads:
The growth of streaming isn't isolated to Europe, either. Warner Music Group announced that it earned more money from streaming than through paid downloads in Q2.
Apple's current music streaming offer is fairly weak. iTunes Radio lets customers listen to radio stations built using iTunes tracks, but it's a pretty soulless service, and hasn't seen the kind of uptake that Apple would like.
So Apple is making a play that's aimed at gaining ground in music streaming. Spotify's dominance over streaming is at a similar level to Apple's share of paid music downloads: 86%.
Apple's music streaming service is going to cost users $10 a month, but will likely have an introductory trial period between one and three months. Apple wanted to compete on price with other streaming services, reportedly aiming for an $8 monthly cost, but music labels pushed back.
It can't make its streaming service cheaper than competitors, so Apple is using a different tactic. It's signing up big names in music to get behind the service, reportedly bringing rapper Drake and Pharrell Williams on board to voice radio stations on Apple Music. And The Wall Street Journal also reports that the company is planning a "major advertising campaign" for the launch.
Apple doesn't want to get left behind as the music industry moves away from downloads to streaming, and it's using the contact books of Beats cofounders Jimmy Iovine and Dr. Dre to bring stars on board. That could be a tricky tactic for Apple: Jay Z's competing music streaming service Tidal already has an impressive roster of celebrity backers, although a new report claims that Drake jumped ship from Tidal to Apple just days before its launch.