Personal Finance

Tom Hudson: Apple changing its tune on music streaming

It is hard to ignore the swagger from a business that has reinvented multiple industries, even if it is late to an opportunity and cannibalizes its own existing business.

On Monday, Apple holds its annual Worldwide Developers Conference. This is the gathering Apple has used in the past to announce the mobile device App Store, new iPhone models and new computer operating systems.

This event is geared more for Apple apostles than i-Everything addicts. But Apple has mastered the stagecraft of corporate announcements to maximize the hype. It’s part of the high polish branding around its products and services that has fed Apple’s growth.

On Monday, there is anticipation that Apple will announce a subscription music streaming service. Spotify already is the market leader collecting $1 billion a year in subscriptions with an 86 percent market share.

If Apple gets into the business, it will be latecomer. Tablets came well before the iPad. Digital audio players are not called MP3 players like they were before 2001. They are iPods. Neither is Apple afraid of cutting into its iPod business either. The sales of iPods are a fraction of it was before the iPhone was introduced.

But Apple has slayed early entrants before. The average iTunes customer spends less than $30 a year, most of it on Apps not music. If Apple launches a streaming service, it’s betting many of those same customers will amp up their music spending to $10 a month for a subscription streaming service.

Apple will defend its music dominance, even if it has to change its tune.

Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.

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