The music streaming war between Apple Music and Spotify is heating up.
As part of what appears to a be series of moves to grow Apple Music, Apple has acquired Platoon, a London-based company that discovers and develops artists by giving them the resources they need to create music and forge relationships with labels.
Music Business Worldwide first reported the acquisition. It’s not clear how much Apple paid for Platoon; the company makes many acquisitions during a year, but never discloses the amount exchanged.
Buying Platoon gives us possible insight on where Apple sees Apple Music is headed: original content that might be release music either exclusively or for a period of exclusivity on the music streaming service.
Platoon counts Billie Eilish as one of its notable musician discoveries back in 2017 before she signed with Interscope.
Just like how Netflix is doubling down on original video content with shows like Chilling Adventures of Sabrina and Maniac, Apple seems interested in taking Apple Music in the same direction.
Having the same content as Spotify is fine short term, but won’t make Apple Music as addictive (or “sticky”) to the point where users will feel they’re seriously missing out if they don’t subscribe.
Despite a strong start, Apple Music still pales in comparison to Spotify in terms of paid subscribers. Spotify has over 83 million paid subscribers as of June. In comparison, Apple Music has over 40 million paid subscribers as of April (over 50 million of it you count free trials)
Making Apple Music a must-have service for Apple customers is especially important as iPhone sales have slowed. Even though reviewers across the board (including us) agree the iPhone XR is the best iPhone value Apple’s offered in years, it might not be selling as well as Apple had hoped.
Reaching beyond Apple users
So if iPhone hardware is flatlining, then where can Apple get growth from? Apple Music for sure, iCloud subscriptions, AppleCare, and of course accessories like AirPods and Beats.
Apple Music is going to be one service to pay closer attention to in 2019. Recently, Apple added support for Amazon Echo speakers. Previously, the only smart speaker that was compatible with Apple Music voice controls was Apple’s own pricey HomePod.
Apple also recently pushed out an Apple Music Android app update for beta users, which adds tablet support, further suggesting Apple’s looking beyond the iPhone, iPad, and Mac user for growth.
Apple’s walled garden still stands as high as ever for apps, but for streaming music — just like it was with iTunes — appealing to customers beyond the border is important.
These strategic changes come after Jimmy Iovine left Apple in August. Iovine was brought onboard (along with Dr. Dre) when Apple acquired Beats for $3 billion, which gave them the Beats Music, which then eventually morphed into Apple Music.
Some people could interpret these moves as Apple opening up it services, but I don’t necessarily think that’s the case. Apple’s intent is always to push its own devices and services together. Expanding beyond its customers is all part of a strategy to eventually convert these non-Apple users into Apple ones.