Apple Music experienced a tumultuous year in 2022, with several controversies and changes that impacted the streaming music service. This article will provide a detailed timeline and analysis of the key events that occurred with Apple Music over the past year.
The Loss of Neil Young’s Catalog
In January 2022, singer-songwriter Neil Young removed his music catalog from Apple Music and other streaming services in protest of COVID-19 vaccine misinformation that was being spread on Spotify’s Joe Rogan Experience podcast. Young’s decision put pressure on streaming services to address harmful content being spread on their platforms. Apple complied with Young’s request and removed his catalog of music, losing a collection of classic songs and albums that had been available to stream for years prior.
While Young’s catalog was not one of the biggest on Apple Music, his protest brought negative publicity and raised difficult questions for the streaming service around content moderation. Apple had to walk a fine line between respecting artist wishes and setting a precedent for other artists potentially wanting to have their music removed. Overall, the loss of Young’s catalog was more symbolic than financially impacting, but demonstrated the challenges Apple Music faces in keeping all artists happy and properly moderating content.
Loss of Market Share to Spotify
In April 2022, new market share numbers reported by the Wall Street Journal showed that Apple Music continued to lose ground against rival Spotify. According to the data, Spotify held a 31% share of the worldwide streaming music subscriber market at the start of 2022, while Apple Music had just a 15% share. Apple Music had managed to slowly grow in 2021, but was still losing the battle for streaming music dominance.
There are a few key reasons Spotify has maintained a healthy market share lead. Its free ad-supported tier creates a funnel for converting users to paid subscriptions. Spotify has stronger investments in core streaming tech, algorithms, and personalization features. And Spotify’s multi-platform support across many devices and integrations gives it an access advantage. While Apple Music benefits from iPhone/iPad/Mac ecosystem lock-in, Spotify has neutrality across platforms.
For Apple Music, losing market share to Spotify raises questions about the streaming service’s growth potential. Without making big improvements to close the gap, Apple Music may face challenges signing top artists and labels that want to release music where it will get maximum exposure. Apple will need to continue investing heavily in the service and find ways to convert more iPhone users to subscribers to avoid further share loss.
Increase in Apple Music Subscription Price
In April 2022, Apple announced that the monthly price of an Apple Music individual subscription would increase from $9.99 to $10.99 starting in May. The price hike was the first for the service since launching in 2015.
Apple claimed the price increase was due to rises in licensing costs for music. Artists and labels have been pushing streaming services like Apple Music and Spotify to pay higher royalties as music streaming has grown. While Apple is passing some of this cost pressure to consumers, the relative 1 dollar increase is unlikely to stem profit erosion from royalties completely.
The Apple Music price increase could make the service less competitive with rivals like Spotify that have maintained 9.99 monthly subscription rates. It may impact subscriber growth and retention, especially if Apple raises prices further in the future. However, the company hopes loyalty from existing users and its ecosystem lock-in effects will prevent significant churn.
Continued Growth in Paid Subscribers
In May 2022, Apple reported that Apple Music had reached over 90 million paid subscribers globally. That was up 20 million subscribers from the previous year. So while Apple Music was losing market share to Spotify, it was still demonstrating healthy growth in raw paid subscriber numbers.
Apple has benefited from its huge iPhone user base, making it easy to convert customers to Apple Music subscribers with bundled offerings. Growth markets like China and India have also fueled subscriber gains. However, Apple is still falling far short of Spotify’s subscriber base, which sits at around 180 million. Maintaining strong subscriber growth will be key for Apple Music’s future, even as converting additional users gets harder.
Partnership with Major League Soccer
In June 2022, Apple Music was announced as the new sponsor for Major League Soccer (MLS) in the United States. The multi-year partnership was a major sports media deal for Apple Music as it tries to expand promotional channels.
The MLS deal gives Apple Music branding on pitchside billboards, integration in media broadcasts, and opportunities for artist promotions around matches. Sports partnerships have been an important growth strategy for Spotify, so this was a competitive move by Apple. However, the MLS has lower TV viewership than other U.S. pro sports leagues, so the deal may have limited awareness impact.
Continued Growth of Apple Music Radio
Apple Music Radio has given Apple an extra avenue to produce original audio content and grow engagement on the platform beyond just music streaming. In August 2022, Apple highlighted that Apple Music Radio had reached over 100 stations, along with content from thousands of shows.
The growth of Apple Music Radio provides more differentiation against pureplay music streaming from Spotify. Live radio programming creates a more terrestrial radio-like environment that some customers still prefer. Apple has invested in radio shows across various genres including hits, country, rock, and pop. The company will likely look to expand investment in this area.
Decrease in Number of Exclusive Releases
In the early years of Apple Music, the service relied heavily on striking deals for exclusive album releases with top artists in order to draw subscribers away from other streaming platforms. But in 2022, the number of major exclusives decreased dramatically.
The shift away from exclusives reflects Apple’s growing maturity as a streaming platform. Exclusives tend to be inconsistent with maximizing royalty revenue, which is now Apple Music’s primary focus. And major artists have pushed back against releasing their music on only one platform. Spotify also scaled back on exclusives after initial success. While exclusives succeeded in growing Apple Music early on, they are now bad for the streaming music business overall.
Expansion of Voice Plan to More Countries
In October 2022, Apple announced it was launching its Apple Music Voice Plan in additional markets outside the United States. The Voice Plan provides Siri voice-controlled access to Apple Music for $4.99 per month.
The global expansion of the cheaper Voice Plan aims to make Apple Music more appealing in developing markets where $9.99 subscriptions are too expensive. It encourages the use of Apple’s voice assistant technology. Boosting international subscriber numbers will be key for Apple Music to sustain strong growth at its scale.
Layoffs in Apple Music Marketing Team
In October 2022, Apple was reported to have laid off several employees from Apple Music’s marketing team. The cuts were allegedly part of broader company cost-cutting efforts being implemented by Apple CEO Tim Cook.
The layoffs raised questions around Apple’s future investment levels in marketing Apple Music against competitors. Marketing is critical for attracting new subscribers. However, Apple likely sees opportunity to drive higher efficiency in its spending. With over 90 million subscribers achieved already, the focus may shift more to retention. But reduced marketing investment could still pose risks longer term if it cuts into subscriber growth.
Launch of Classic Concert Videos
Apple added a new dedicated section to Apple Music in November 2022 featuring classic concert videos for streaming on demand. The concert videos include performances from top artists like The Beatles, Billy Joel, and Heart.
Offering iconic concert performancesdifferentiates Apple Music from pure song streaming. It provides additional value to attract and retain music fans. Apple has the resources to license huge libraries of archival footage to build a compelling concert catalog. However, video offerings stray from Apple Music’s core song streaming focus and advantages.
Expansion of Student Subscription Plan
In November 2022, Apple announced it was expanding eligibility for Apple Music’s discounted student subscription plan. Over 75 additional markets gained access to the Student Plan priced at $5.99 per month.
Growing Apple Music’s younger subscriber base through student discounts will be key to sustaining long-term growth. Students transitioning to full-price subscriptions can drive strong lifetime value. Music streaming services see high youth engagement, so conversion tactics aimed at students are effective customer acquisition tools. Broadening student plan access should support Apple Music’s growth goals.
Continued Pressure around Royalties
Apple Music faced ongoing pressure in 2022 from artists, songwriters, and publishers who want reform around music streaming royalties. Additionally, governments got involved pushing for fairer compensation. For example, the U.S. Copyright Royalty Board increased songwriter streaming royalties by about 44% over the next five years.
While Apple has positioned itself as an ally to artists, the streaming compensation controversy still threatens the service. Rising royalty costs pressure margins without price hikes. There have been calls for a user-centric payment model that distributes royalties based on listeners rather than general platform shares. Apple risks backlash if it appears resistant to change.
Integration with New Products Like Apple VR Headset
Apple is rumored to be preparing the launch of new products like a VR/AR headset in 2023. Apple Music will likely see integration with these emerging devices to bring music streaming services into new environments.
Getting Apple Music adopted across Apple’s broader ecosystem strengthens loyalty and retention. Music integration gives new products like a VR headset compelling use cases out of the gate. However, it’s unclear if new mediums will drastically alter how users interact with Apple Music. VR could be more niche than mobile devices.
Conclusion
In summary, 2022 proved an eventful year for Apple Music with numerous changes and controversies. The service made progress growing paid subscribers, but lagged Spotify in market share. Pricing hikes, royalty debates, and layoffs raised questions around Apple Music’s future performance. However, new initiatives like radio expansion, concert streaming, and student plan growth highlight opportunities. Going forward, Apple Music must balance investment to retain lead users while continuing to carefully broaden its subscriber base internationally. How effectively Apple Music navigates an evolving music streaming landscape will determine if it someday can overtake Spotify or falls permanently behind.