Web giants likely to battle for music fans' attention
By San Jose Mercury News
Published: Saturday, May 18, 2013, 9:00 p.m.
Silicon Valley is poised to upend the music industry — again.
From Napster to Pandora, from the iPod to the iPhone, technology innovation has made music easier to find and cheaper to buy than ever before. At the same time, it has destabilized the music business and left artists — at least those not named Justin Bieber or Taylor Swift — fearing for their livelihoods.
In this latest music revolution, companies like Google, Apple and Facebook are eyeing the streaming and on-demand music business now dominated by smaller niche companies such as Pandora and Spotify. When they do — and most analysts agree it's really just a matter of time — they could give nearly everyone the ability to listen to whatever they want, whenever they want, and mostly for free.
“There is no doubt that when companies this large enter into the field, it will be disruptive,” said Jonathan Handel, a media and entertainment attorney with the Southern California firm TroyGould.
The stakes are especially high for Apple, which transformed the music industry 10 years ago when it introduced iTunes. The digital store is still lucrative, owning 63 percent of the digital music market, but it is up against a new crop of music services that don't require a credit card. The reluctance of consumers to pay 99 cents to download a music file could threaten iTunes' dominance.
Apple could be close to striking a deal with major music labels to create “iRadio,” a streaming music service that Apple followers speculate will be similar to Pandora but with a larger selection and more on-demand features, such as the option to download songs as they play and unlimited song skipping.
Apple spokesman Tom Neumayr declined to comment on “rumor and speculation.” The company filed for a streaming music patent last year.
Google is said to be working on a music-streaming service that would work on YouTube and could start in the summer. Media reports say its plans include a free version with ads and an optional subscription fee for additional features.
Twitter has entered the fray, releasing a music discovery and sharing service in April to its 500 million users.
Another Silicon Valley heavyweight may be next: “Facebook, we all know they're next. Twitter just beat them to it,” said John Wright, founder of Speakerfy, an application that lets users synchronize music playing on multiple laptops or iPads.
As one Pandora representative put it, “everyone's competing for ears and their time spent listening.”
The shift to free and unlimited streaming is also transforming the way consumers think about music.
“Music, just like the Internet, will be broadly available for everyone,” said Tommy Darker, a musician and marketing professional who has written about technology's impact on music. As free access to music grows, the desire to own it fades, he said.
Already, he said, “the majority have stopped buying.”
According to the NPD Group, just slightly more than one-third of consumers think it's important to own music.
San Jose State University student Rosa Gonzalez said she has been using her free Spotify account to explore dubstep — percussion-heavy electronic dance music she says is good for studying. And she no longer has to pay for songs on iTunes.
As much as she likes Spotify, 19-year-old Gonzalez said she won't pay $5 or $10 a month for one of the service's ad-free accounts: “There are so many other ways to get free music.”
Only about one-quarter of Spotify users pay for an upgraded version, while the rest stick with the free streaming, according to Spotify. And a fraction of Pandora users opt to pay $4 per month for the ad-free version.
“That's been a big theme among younger consumers — they're either unwilling to pay or they have tight budgets,” said Russ Crupnick, senior vice president of industry analysis at the NPD Group.
Even iPods have been squeezed out, with shipments down to 5.6 million from 7.6 million a year.
“It's not iPods anymore; it's phones,” Handel said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- ProStart primes student chefs for best kitchen jobs
- Obama administration asking insurers to be flexible on health coverage
- PNC plans to do away with tellers
- Early data reveal downward shift in holiday spending
- Merrill to pay $131.8M to settle SEC charges
- Washington County gas drilling spill cited in lawsuit not reported to state
- Economic recovery hinges on feds, experts say
- Some bargains improve once tree comes down
- Health-insurance mandate poses potential hitch for volunteer fire companies
- Wary of Federal Reserve fallout, stocks drop further
- Ford plans 23 new cars, 5,000 U.S. jobs in 2014