The news from the European Commission (EC) regarding the results of its investigations into the launch of Apple’s music streaming service appears to be good news for consumers. According to a report in Recode, which cited four sources with knowledge of the matter, the Commission “failed to find evidence of collusion among the major music labels and Apple to quash free music streaming services such as those offered by Spotify.”
With streaming fast replacing download for many people, it seems the EC is putting the interests of the consumer first in terms of price and access. The EC investigation began in April following a ‘formal complaint’ in advance of the launch of Apple music streaming service this summer. Who complained, we know not. The concern was that Apple would use its weight to lure music labels away from the free ad-supported music service model delivered by the likes of Spotify, Deezer and Amazon Music. So, all is good – let all the music play on. Choice brings competition, keeps service providers on their toes in terms of pricing, and fuels innovation.
The shift to streaming, and the buoyancy of the music market, has to be good news for mobile operators. As well as running the networks that are the primary means of accessing content for the consumer, there is massive potential for operators to help music services – in fact any mobile content provider – to deliver differentiation. The issue with competing services such as streaming music, where the content library is largely the same, is how different can they be from each other? How do they attract more users – because it doesn’t matter whether the content is paid for by the consumer, or supported by advertising, success for both business models is measured by the number of ears reached.
It’s an issue where mobile operators themselves have plenty of experience – after all, if you look at basic service, one mobile operator is very much like another. So, how do operators, and the music providers, go about helping one another to stand out from the crowd?
This turns our thoughts to supermarkets. What’s the link between music and miscellaneous groceries, we hear you ask? Well, it’s choice, price and innovation. All these are enabled by the trusted umbrella brand of the supermarket. The customer only has to go to one store, or one website, to benefit from a range of goods designed to suit all tastes and all pockets. And every producer and/or distributor of every brand on those shelves or on that website has entered into a mutually beneficial partnership with the supermarket.
The supermarket benefits by being able to offer a range of goods to its customers. Some will be exclusive to that particular supermarket. Some will be cheaper than in competing shops. Some, through partnership agreements, will have gained prime position on the shelf or on the page. Some will have special offers in place. Some will have particularly eye-catching packaging. The customer benefits from choice, price competition, and product innovation. Supermarkets with loyalty card schemes can also target customers with personalized offers based on known preferences – a value-added service to the customers, and to the brand.
The customer also benefits from the ‘trust’ he or she has in a particular supermarket’s brand – whether that means confidence in product quality; or a group’s commitment to the highest ethical and environmental standards; or simply just a back to basics, no frills, lowest cost approach. That’s where the choice comes in again, customers can vote with their feet (or touchscreen) and choose to spend their money with the company that best suits their wants and needs.
And that’s where the operators, and their partners, can look to evolve as far as possible towards the supermarket model, and place a wide range of content on their shelves. Because operators have access to the one single thing that all mobile content providers want – an established, billing-based relationship with a massive customer base – and, with the right IT systems, the ability to categorize those customers any number of ways.
Music providers already know their Little Mix fans from their Led Zeppelin ones. Partnering with mobile operators gives those providers access to the behaviors and profiles of a far greater potential customer base. This insight enables the music providers to trigger targeted campaigns, for example the offer of a pre-paid pass for 24 hours of streaming, with data included. This puts the music provider’s brand directly in the hands of a much wider range of potential customers, opening up lucrative opportunities for innovation and monetization for both the music provider and the operator.
These highly effective partnerships between mobile operators and content providers can enable differentiation for both, deliver value-add to both sides, and generate a better end-user experience.
And, what’s more, there’s absolutely no need for another loyalty card to clutter up your wallet or purse, and that has to be a good thing!