Is Radio Apple’s Seventh Billion-Dollar Business Unit?

What Apple39s streaming radio service could mean for competitors Apple39s iTunes Radio service could have an audience of more than 70 million people ready to listen based on its brand name alone In fact a recent survey of 1000 Internet radio listeners reveals onethird would switch to Apple39s radio from their current favorite service If these early insights are a glimpse of reality Apple39s entry into this market could completely shift the landscape and cut deeply into the audiences of Pandora Spotify and the rest of the Internet radio marketAfter months of speculation that an Apple radio service was on its way including a report from CNET that hard evidence was discovered in the code of iOS 61 on a jailbroken iPad the company announced a streaming radio service yesterday at its WWDC 2013 Set to launch this fall iTunes Radio is a free Internet radio service delivering features familiar to iTunes users and a sophisticated personalization of song lists and stations based on user preferences and listening behaviorRecently GroupM Next conducted a broader study and analysis on Internet radio usage and from it compelling consumer data about Apple emerged signaling the company would immediately gain an incredibly strong radio audience amp8211 if launchedKnowing nothing about the service other than it would be made by Apple 49 of respondents said they would be interested in the service and 34 said they would switch from their current favorite service What39s fascinating is the staggering power of Apple39s brand reputation Consumers express faith in a product experience that steps outside of Apple39s mainstream product offering based on brand name alone And for that Apple has the competition to thank amp8211 Pandora iHeartRadio Spotify and others amp8211 for delivering a marketplace and services that have gained adoption the world over The challenge now which Apple would undoubtedly match would be developing an experience for expectant consumers who based on the study are confident the execution of quotiRadioquot would be of the same level of style and quality of Apple39s devices and operating systemsThe results are even more encouraging for Apple among heavy Internet radio users For consumers who spend at least 20 of their radio listening time digitally 70 said they would be interested in Apple radio and 49 said they would switch from their current favorite productThese results might seem too large to be an accurate estimation however consider that Apple39s iTunes Radio would likely have exclusive features to separate itself from the current leaders in digital radio and that Apple will likely launch the product with a large Applestyle marketing campaign The initial adoption particularly on iOS devices could be enormousIs digital radio Apple39s next billiondollar business Not yet but time will tellAccording to eMarketer digital radio in the US will have 1473 million monthly listeners in 2013 and advertisers will spend about 970 million in this market If Apple were to capture about half of the market share with the release of its Internet radio service it would translate to more than 70 million monthly listeners and roughly 500 million in potential ad revenue in the US alone amp8211 assuming the service is ad supported This also opens a new revenue stream into iTunes which as expected Apple has closely integrated with its radio service amp8211 listeners can access a free adsupported service or subscribe to an adfree service iTunes Match for an annual fee of 2499 Digital radio is probably not Apple39s seventh billiondollar industry right now but it could be within the next five yearsApple39s radio product is potentially disastrous for other Internet radio services In the study respondents were asked to identify which services they currently listen to Of those who said they currently use Pandora 46 said they would switch to Apple39s product Of those who use Spotify 47 would switch The story is even bleaker for less popular digital radio products For example 66 of AOL Radio users said they would switch to AppleWhen Apple decides to flip the switch iTunes Radio later this year it will be an absolute gamechanger in the digital audio market and likely another big win for AppleJesse Wolfersberger is Director Consumer Insights at GroupM NextRead all GroupM39s MediaBizBloggers commentaries at Musings from GroupMCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

Become a Thought Leader. Share your thought leadership article with industry professionals & have them archived in Thought Leadership

Is Radio Apple’s Seventh Billion-Dollar Business Unit?

Author

Publish date

Channel

Jesse Wolfersberger

Hispanic Leadership Roundtable: Inclusion, Mentorship, and Building the Next Generation (Video) - By Juan Ayala

More Videos:

Become a Thought Leader. Share your thought leadership article with industry professionals & have them archived in Thought Leadership

Is Radio Apple’s Seventh Billion-Dollar Business Unit?

Enjoying This Commentary? There's More to Love

Jesse Wolfersberger

Hispanic Leadership Roundtable: Inclusion, Mentorship, and Building the Next Generation (Video) - By Juan Ayala

The payment was successful

Cookies