Apple Music: A Lesson in Subscription Based Content

September 04, 2015
By: Special Guest
Marco Veremis, CEO, Upstream

In June 2015, Apple (News - Alert) launched music streaming service Apple Music, which became a differentiator for the company and an example for the content industry to look towards. In short: Apple’s jump into subscription-based content was well played. With the launch of Apple Music back in June, the global brand has now seen monumental success with over 11 million subscribers, not only in the US but in emerging markets as well. Let’s look into this further.

Why Subscription Based Content?

Consumers in today’s global market are hungry for digital content. As their access points have changed from less accessible computers, which are only used at home or in the office, to always-available mobile devices, the need for relevant, easy-to access information has increased. This is where subscription based content comes in.

Subscription-based content offers consumers readily available content, while still providing value to a business through increased revenue. Customers are able to shift from a pay-as-you-go model to a monthly or yearly fee that doesn’t inhibit the flow of content consumption on a regular basis.

This model isn’t only preferred by consumers. Subscription content plans are the answer for companies who are looking to increase their revenue and to maintain a loyal customer base, without the constant battle of constantly seeking fresh consumers to make purchases. After all, industry experts note that finding new loyal customers is five to ten times harder than increasing a company’s revenue through repeat exchanges with existing customers. The subscription-based model therefore allows companies the ability to maintain that loyal relationship with their existing customers while providing them with the content they are searching for.

How Apple Makes It Work

Apple is known as a company that produces products with an emphasis on user experience. From point of conception all the way through to advertising and marketing, Apple’s goal is to let the consumer know that their service or device will bring resonant value to their life. With the launch of Apple Music, in order to find success domestically and abroad, Apple found a major opportunity to focus on price competitiveness – a factor that they’ve never touched on before.

Image via Shutterstock

In the U.S., Apple Music is 10 dollars a month, comparable to the services provided by Netflix and Spotify (News - Alert), both of which have seen success with their subscription models domestically. However, Apple has adjusted for global growth regions that were not without the need for content. In India, consumers can access Apple Music at just two dollars a month. Brazil, Indonesia and Thailand customers pay just five dollars a month and in Hong Kong the service is topped at 6 dollars. Beyond modified prices, Apple Music currently offers a free three-month trial, three times longer than other music streaming services free trials. Apple’s effort to adjust the price for Apple Music based on consumer needs may be the biggest factor to its success.

Where Tech Brands Can Step in

There is an enormous opportunity for other tech brands to model themselves after Apple. Companies that are already producing subscription-based content can find success in emerging markets by ensuring that their content is appropriate and needed by the region, and adjusting the price to fit the individual market. With a lack of choice of content in these regions, new subscription offers would be welcomed.

For companies who are not already offering subscription-based content now may be the time to jump in head-first. Though likely an investment, with subscription consumers a source of loyal, returning revenue, it’s an investment well made. The addition of predictable revenue through a subscription based business can lead to major growth for a company which ultimately means greater opportunity for the brand.

Not only can subscription based services be the answer to a question around finding increased revenue, but also if developed and offered appropriately, companies may have opportunities to emerge in new markets across the world. 

Edited by Maurice Nagle