Next week, a new music service called Beats Music will make its debut. If you've been paying attention to this market, you may be wondering why we need yet another music service, and I'm certainly wondering the same thing. But Beats Music wins points for a strategy that puts Windows on equal footing with Android and iOS, and its arrival now in early 2014 is no coincidence. Consumers, finally, are catching on to the fact that cloud-based music services are a better deal than buying music outright.
Let me tackle that last bit first.
This past week, NPD released its Connected Intelligence Smartphone Usage Report, which was quoted in news stories everywhere because it revealed that Apple's iPhone and Samsung pretty much dominate the US smart phone industry, with about 64 percent of the market divvied up between them. But this report also included some other data related to music service usage that was just about as interesting (to me, at least).
According to NPD, usage of streaming music services on smart phones in the United States grew from 41 percent of all users in Q4 2012 to 52 percent in Q4 2013. (And last year, over 118 billion songs were streamed in via music services, up 32 percent from the previous year. I don't believe that data comes from NPD.)
This market is also growing more competitive, though NPD doesn't provide hard numbers to back up that claim, noting instead that each of the top five players in this market—Pandora, iHeartRadio, Spotify, TuneIn Radio and Slacker Radio, in that order, had "experienced an increase in incidence of usage over the past year."
It's not surprising to me that streaming music services are on the rise. Owning music and then managing its distribution to your devices is about as modern as tailfins on an automobile, and I'm only surprised it's taken this long for customers to figure that out.
Despite its apparent lack of users—you'll note it appears nowhere in that list of services above—Microsoft's Xbox Music is, currently, the best and most complete overall music service out there generally speaking. It's not perfect, but it's come a long way and is surprisingly platform agnostic.
Microsoft Xbox Music in late 2012, positioning it as the only service that does it all: Streaming, offline playback of subscription-based music, purchasing, customized Internet radio stations, and so on. At first, Xbox Music looked promising, but it wasn't until late last year that the reality of Xbox Music started to meet this promise. Microsoft expanded the feature set, simplified the clients, and brought the service to non-Microsoft platforms like iOS, Android and the web.
So aside from one missing feature—the ability to upload songs that aren't in the Xbox Music Store to your collection, crucial to some music fans—Xbox Music is all there today. And while the feature set isn't (yet) consistent across all supported devices, it works on Windows (8.x/RT), the Web, Android handsets and mini-tablets, iPhone, iPod touch, Windows Phone, Xbox 360 and Xbox One. It's everywhere I want it to be.
By contrast, most of the closest competition—Apple iTunes, Google Play Music and Spotify—is either not all there, or is not available on all the platforms I care about. We'll never see iTunes on Windows 8.x/RT, on Xbox, or on Windows Phone. Ditto for Google Play Music. And while Spotify is on Windows Phone, that app is not exactly up to date, and Spotify lacks many of the features that makes Xbox Music so exciting.
As you may know, I'm working on a short e-book about Microsoft's music service called Paul Thurrott's Xbox Music 2.0, and you can find the latest update in the post Paul Thurrott's Xbox Music 2.0 (Pre-Release 0.3). But one of the key reasons I'm writing about Xbox Music is because it's the only service that both does it all and does it on all the platforms I care about.
Or it was. Now there's Beats Music, and while we won't be able to actually experience the service until it launches on Tuesday (January 21, 2014), it's pretty clear looking at the service's available promotional materials that this will be a functional competitor to Xbox Music. That is, it will support a complete feature set—and not just parts of it—and will work on all the platforms that I—and, presumably you, if you're reading this site—care about.
You can find out more about Beats Music on the web, of course, and also via the Beats Music blog, which is currently offering just a single post. But here are just some of the key takeaways.
Human DJs. While many music services offer some form of Internet radio functionality where you can "seed" a dynamic playlist with one or more favorite bands (or albums or songs or whatever), Beats Music will take this a step further and offer curated but still dynamic radio stations created by real human DJs. Microsoft did the curated playlist thing during the over-spending Zune days, though that's a thing of the past in Redmond. But it's an interesting differentiator, and one that bridges one of the few remaining gaps between today's all-digital music services and the FM radio stations of the past.
Smart phone focus. While Beats Music will be available from the web, it seems like the primary focus on the service will be on smart phones. You can see this in two key areas: It will be served by native apps for all the top smart phone platforms—meaning Windows Phone too, and not just Android and iOS. And it will be offered through wireless carriers, starting with AT&T Wireless, meaning that it can become just another part of your monthly bill, a huge convenience. (More on this below.) Beats believes that by partnering with wireless carriers, it can gain a leg up on the competition and quickly grow its subscriber ranks. (AT&T has over 100 million subscribers.) I think the firm is correct.
Beats brand. Whether you love the bass-enhanced sound of the Beats line of headphones or not, you can't deny their popularity, especially with the young up-and-comers who love to spend money. According to NPD, Beats owns almost a third of the $1.8 billion market for headphones in the United States. It controls 61 percent premium headphone sales (headphones that cost $99 or more). And it delivered revenues of over $1.2 billion last year alone. Beats is successful.
Pricing. Beats Music will cost $9.99 per month for unlimited streaming, downloading for offline playback, and support for up to three devices. (By comparison, Xbox Music Pass is $9.99 per month—or $8.33 per month if you pay for a year—for the same functionality but support for up to four devices.) But if you are an AT&T Wireless customer, you can access a $14.99 per month plan that supports up to five people and up to ten devices. So Beats Music is a solution that works for the entire family. This is absolutely a feature that Xbox Music is missing. (That said, its availability via AT&T Wireless of course limits it dramatically.)
Windows Phone support. I think. As you might expect, Beats Music will launch on Android and iOS on January 21, but it will also launch on Windows ... something. It looks like Windows Phone. But depending on where you look in Beats Music's promotional materials, this support is described as either "Windows Mobile phone" or "Windows phone," and a print ad in Rolling Stone uses the Windows Store logo, which is for Windows 8.x/RT, not Windows Phone. I assume they mean Windows Phone. And since Windows Phone users already have a huge inferiority complex, my advice here is simple: Shut up about the naming thing and just be happy we're seeing this support from day one. This is a win. (Beats also says you can "play on your computer," so it's possible we'll see a Windows Store app. But I bet this is just web.)
Beyond this, you get the expected—a catalog of 20 million tracks, no ads, and so on—and of course in a head-to-head comparison with Xbox Music it's not hard to pick this thing apart and show the places in which Microsoft's service trounce all over the newcomer. But the ultimate goal here isn't so much to promote Microsoft's service—though in this case, I do feel Xbox Music is still the better service—but rather to point out that Beats Music appears to be a full-featured music service that is very much platform agnostic. It's something that should work as well on Windows (Phone) as it does on Android and iOS. It is, in short, very interesting.
So, we'll see how this works in real life. I've been around long enough to understand the delta between what we're promised and how things work in practice. But it's pretty clear that Beats Music, despite the crowded market it's entering, has the chance to get this one right. And while I had expected to start dropping music services this year to focus semi-solely on Xbox Music, Beats Music upends all that again.