Spotify announced success yesterday in launching their first application for Apple’s iPhone and iPod Touch.
For those who don’t know, Spotify is a service allowing its users to stream any song ever recorded over the internet and play them on an easy to use platform. Users can create and save their own playlists – all you need is an internet connection. The service operates on three levels:
Basic, which allows users to stream music for free with an advertising break every seven minutes.
Daily, allowing users to pay a £0.99 fee for a day of uninterrupted music.
Premium, a cost of £9.99 per month for completely uninterrupted streaming of any song you fancy at any time.
Obviously this kind of service provides the likes of Apple with direct competition for its own music purchase platform iTunes. So why is it then that Apple have seemingly put their bottom line at risk in such an avoidable way?
One answer is that they probably haven’t. The decision from Apple to only allow Spotify to create an application accessible by its Premium users will undoubtedly work against the applications popularity. This is because Spotify application users will effectively be paying £10 per month to simply rent music, in no ownable form. At least with iTunes the sense of ownership is retained by the user.
By allowing Spotify to create such an application on their own terms Apple have avoided coming across as a monopolising industry giant, thus not damaging the brands reputation. Remember, not long ago Apple themselves were the challenger brand revolting against the PC – so they clearly know the rules to this game very well! By giving with one hand and taking away with the other Apple have protected both brand credibility and their bottom line, an often difficult task.