Would you subscribe to an Apple (NASDAQ:AAPL) streaming music service? You may soon have the option, Billboard reports. Fool contributor Tim Beyers explains the implications of the proposed move in the following video.
We're still too early in the process to know exactly what's planned. But if Billboard's reporting is to be believed, Apple's streaming service would mirror Spotify by giving listeners the ability to find, play, and even purchase the music they want on demand. The Mac maker is also toying with the idea of releasing an iTunes app for Android.
Investors should like the strategy. Billboard cites Nielsen Soundscan data that shows sales of digital albums and tracks falling by double-digits as streaming alternatives grow more popular. In fact, according to the International Federation of the Phonographic Industry (IFPI), Spotify and its peers were responsible for more than $1 billion in revenue last year -- a 51% year-over-year improvement. The download disruption is already well under way.
If Apple's music business hasn't taken a noticeable hit, it's because the iTunes Store is a more diversified enterprise than it used to be. Revenue zoomed 19% to $4.4 billion in the latest quarter from not only music, but also apps and, at last count, 800,000 TV episodes and 300,000 movies daily.
So what can investors expect from an Apple streaming music service? A fight for share that's likely to involve -- at least in the short term -- cheaper prices for premium versions of Spotify and Beats Music. Pandora Media (NYSE:P) isn't likely to be as affected, Tim says, if only because the company is targeting terrestrial radio as others focus on disrupting the album distribution business. Do you agree? Leave a comment below to let us know what you think of the prospects for an Apple streaming music service.