Apple's weeklong developer conference kicks off in California today with a key note address from CEO, Tim Cook who is expected to unveil plans for a new music streaming service to rival the likes of Spotify and Deezer.
While famously secretive product launches were part of the Steve Jobs mythology - Tim Cooks' big movement has been somewhat ruined by Sony Music CEO Doug Morris who grabbed headlines last night when he told the MIDEM conference in France, “The announcement is happening tomorrow.”
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Financial Times reports that the company is set to move away from the iconic 'iTunes' brand (Doug Morris also alluded to this change) which has been seen as the service that kickstarted the mass movement away from physical music sales and towards digital downloads - in favour of a new 'Apple Music' banner.
This is possibly to separate the two entities, and to leave a space for people who still want to pay €10.99 plus to download an album to go about their business - but from here-on-out it looks like that project has been parked.
For music industry analysts this is a big day - while competing streaming platforms like Spotify, Deezer, and the newer Tidal have been jostling for market share, Apple has been looming in the background developing its own new product.
Streaming companies have been building strong businesses, but even the most successful still have major question marks hanging over their business models.
Apple and Google are the two companies with the potential to blow the current competitors out of the water.
Google's strategy so-far has come across as confused, mixing Google Play Store packages with the 'YouTube Music Pass' - neither have made a significant impact on the market.
Apple advantages
With personal information emerging as a new form of currency, the company has a massive head start. In April of this year during an earnings call, Tim Cook revealed that Apple has 800 million iTune accounts with users' credit card details logged.
The new Apple service is likely to be automatically installed on millions of iPhone, iPad and Mac devices when their operating systems are updated.
With Apple creating the world's most popular hardware offerings - and holding credit card information - this puts the purchase of a streaming subscription one, or maybe two clicks away for millions of people around the world.
This gives the brand a chance to make a land-grab, reining in new users who do not already have brand allegiances.
Mark Mulligan, an analyst with MIDia Research points out to the FT that music is a very small part of the Apple empire, as he puts it, "It doesn’t have to make money out of streaming" - it is making content to push hardware sales.
If Apple generated the same revenues as Spotify, the current market leader, it would represent less than one percent of the company's income.
What can we expect?
Apple is said to have toyed with the prospect of undercutting the current €10/$10 per-month subscription fee offered by almost all companies, by charging $8.
It is thought that this idea was abandoned as music companies who were negotiating with Apple feared that this would drive rates down across the industry, and reduce the already controversially-low payments that record labels get from streaming companies.
The fine details of the product are still be be revealed. It is likely to called Apple Music, have access to the catalogues of all major music labels, and a strong focus on personalisation and artist curation.
Beats Music which Apple bought as part of the deal to buy Jimmy Iovine's, Dr Dre fronted brand from in 2014 it thought to be providing the infrastructure for service - and Zane Lowe has been poached from BBC Radio One to be involved in the project.
Implications...
Sony's CEO Doug Morris was certainly sounding optimistic about the venture speaking yesterday, saying:
"What does Apple bring to this?… Well, they’ve got $178bn dollars in the bank. And they have 800 million credit cards in iTunes. Spotify has never really advertised because it’s never been profitable."
He continues: "My guess is that Apple will promote this like crazy and I think that will have a halo effect on the streaming business… A rising tide will lift all boats… It’s the beginning of an amazing moment for our industry."
An 'amazing moment' should probably be considered in relative terms here. During the same event Doug Morris pointed out that over 10 years music has gone from being a $30bn to a $15bn industry - and it probably hasn't bottomed out yet.
But the veteran music exec also pointed to the fact that Sweden is the country that is the furthest down this road, and streaming accounts for over 70 percent of music sales there - Warner Music Group also announced last month that it was the first major label to start making more money from streams than from downloads.
For the music industry streaming means less money, but offers major labels control after some 15 years of playing digital catch-up.
