It’s common knowledge that with the introduction of high speed internet access the music industry has changed forever. Throughout the last ten years companies such as Pandora, Spotify, Last FM, and Google Play; to name a few, have been fighting tooth and nail so as to attain, and maintain the larger market share. This month, a new contender has entered the ring.
With the launch of Apple music the company has embarked upon a new era, one in which it has decided to leave behind the old days of iTunes, and embrace the future of streaming music at a nominal fee to apple devices, and coming this Autumn, to android users via the google play store.
On its own apple music stands as an instant heavyweight, collecting 11Million, active free trial users, almost half that of Spotify’s 20M paid subscribers. There are several music streaming services that claim to offer the most attractive package, however in reality each music streaming service provider offers the same service, with minor differences mainly in the quantity of the music library, the free service (freemium) options and compatibility to other devices.
Where apple music separates from the rest is the fact that it’s Apple. What I mean here is that it already has a huge competitive advantage, being that it is the world’s most valuable brand and therefore most people that consider themselves Apple users are highly likely to try the service, and make it their main music streaming provider, opting into paying around $10 a month.
To date, there are 11Million, active, free trial apple music users, however most of these users have been activated automatically with the latest Apple update, with it being offered to the Google play store this September. Each user that opts for the service is being offered a 3 month trial period; which when compared to its competitors, was the first to offer such a long period.
This three month period is what could potentially make apple a large sum of profit from those who simply forget to deactivate the 5 step automatic payment procedure that would deduct $10 (€9.17) from their apple pay account/credit/debit card, potentially making Apple $100M in sales overnight, if every single person currently under the free trial pays the first months’ fee come September. Even if that figure is halved at $50M, Apple still stands to come off with a profit given that its expected product launch also this upcoming September.
Whether Apple music is a success story or a complete flop is yet to be seen over time, however taking the above into consideration and pointing out Apple’s recent stock price drop to $112.95 on 8/6/2015 at open, it would seem as though now is the time to invest in apple, as it seems to be edging close to a fairly large profit increase come September.
This article was issued by Steve Diacono for Calamatta Cuschieri. For more information visit www.cc.com.mt . The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.