When Apple launched iTunes Radio last month, it threw its hat in the ring to enter the competitive streaming music category, going up against popular services such as Pandora and Spotify. Even before the first user had logged on, a handful of the world’s biggest advertisers were already on board and banking on Apple to make quick headway in the category.
iTunes Radio is Apple’s attempt to both expand upon and better monetize the tens of millions of unique monthly users who’ve adopted iTunes to manage and build their music library. According to Ad Age, iTunes’ online user base already bests the second most popular online music service Spotify even without offering music on demand. iTunes had nearly 27 million visitors in July of this year compared Spotify’s 20 million. As a better indication of room for growth for iTunes Radio, the number one streaming service Pandora reported nearly 70 million registered users in March of this year. Pandora gets a good chunk of its user base from mobile, where it’s the number one music streaming app. That’s where Apple intends to leverage being a device manufacturer. It included the iTunes Radio app in the iOS 7 update for its devices.
Like Pandora, iTunes Radio is free but includes a subscription-based premium service that eliminates ads. Apple would undoubtedly like everyone to be a premium member, but brands are banking on the hordes of free users the service is likely to get. McDonald’s, Procter & Gamble, PepsiCo, Nissan and Macy’s reportedly paid $10 million each to become iTunes Radio launch partners, with exclusivity as advertisers on the service for their product categories until the end of 2013.
PepsiCo CMO Frank Cooper summed up his company’s enthusiasm for the service for Ad Age: “We looked at the devices Apple has and the number of subscribers that they have overall on iTunes. Just in terms of infrastructure, we think they have the chance to be the biggest.”
Source: Ad Age
