Looking at recent subscriber trends, things become trickier to analyze. There is evidence that Spotify is moving the goalposts as its paid subscriber count is becoming diluted due to increased use of price discounts and promotions. These offers are inflating Spotify's paid subscriber numbers. Since Spotify has nearly 70M subscribers on its free tier, the company is likely trying to capitalize on this large user base by dangling discounts and promotions to entice upgrades. Apple Music has not seen this same level of price promotion. This means that the Apple versus Spotify battle will need to be judged along new metrics in the coming months.

In terms of other paid music streaming competitors, the industry remains disjointed. Riding on the back of big exclusives, Jay Z's Tidal has positioned itself as the third-largest paid streaming service with more than four million subscribers. Deezer, Rhapsody, and Pandora are close behind in terms of the number of paid subscribers. Meanwhile, SoundCloud's recent move into paid music streaming has not caused much of a stir.

Step 2: Leverage a strong balance sheet to control the music narrative. Apple's next step to own the music industry is to leverage its strong balance sheet in order to better position itself against the largest streaming players. Apple will use a portion of its $234 billion of cash to accomplish three things:

Obtain music exclusives . Apple is betting big on music exclusives. By working closely with top music artists, Apple believes exclusives won't just help sell Apple Music subscriptions, but also go a long way in placing Apple Music in the center of the music discussion. Exclusives help drive buzz and press. As an example of how powerful exclusives can be, most of Tidal's 4.2M subscribers are a result of album exclusives from Beyoncé, Kayne West, and Rihanna. Meanwhile, Apple has seen exclusives from Drake, Future, and Chance the Rapper.

. Apple is betting big on music exclusives. By working closely with top music artists, Apple believes exclusives won't just help sell Apple Music subscriptions, but also go a long way in placing Apple Music in the center of the music discussion. Exclusives help drive buzz and press. As an example of how powerful exclusives can be, most of Tidal's 4.2M subscribers are a result of album exclusives from Beyoncé, Kayne West, and Rihanna. Meanwhile, Apple has seen exclusives from Drake, Future, and Chance the Rapper. Create original content. Instead of focusing just on exclusive songs and albums, Apple has shown a desire to work with labels and music artists to produce other forms of original content including feature-length movies (the Taylor Swift concert documentary), Beats 1 programming, and even scripted television series (Dr. Dre's "Vital Signs"). All of this exclusive content demonstrates how "winning" in the music industry is no longer just about having access to music. Music and video are becoming intertwined.

Instead of focusing just on exclusive songs and albums, Apple has shown a desire to work with labels and music artists to produce other forms of original content including feature-length movies (the Taylor Swift concert documentary), Beats 1 programming, and even scripted television series (Dr. Dre's "Vital Signs"). All of this exclusive content demonstrates how "winning" in the music industry is no longer just about having access to music. Music and video are becoming intertwined. Fund artists. Apple is increasingly looking and acting like a record label these days. While the company isn't exactly forthcoming in disclosing the extent of its involvement, we know Apple is bankrolling a number of artists when it comes to marketing expenses. Apple has produced a handful of music videos for Drake, M.I.A., The Weeknd, and Eminem.

Apple's goal with these three items is to place Apple Music in the center of the music discussion. If something big happens in the music scene, Apple wants it to occur within Apple Music. The key ingredients to accomplishing this step include lots of cash and the right kind of industry relationships. The Drake exclusive reportedly cost $19 million. It's clear this is where the battle is being fought for subscribers in music streaming. Spotify recently hired Troy Carter as global head of creator services and getting exclusives is a top priority.

Step 3: Remove oxygen from the music streaming industry by grabbing revenue share. With a successful pivot into paid music streaming, and now a focus on getting exclusives and building music relationships, Apple's next step toward owning the music industry is coming into focus. Apple will look to gain music streaming revenue share in order to form stronger relationships with music rights owners. In the process, Apple hopes to remove much of the oxygen in the streaming space.

The ultimate goal is to create a feedback loop in the music industry. If Apple Music is the top revenue source, the belief is this would lead to stronger relationships with music rights holders. In turn, stronger relationships would lead to a better Apple Music service with more exclusive content and additional access to artists. The better content will then drive additional paying subscribers and a larger piece of industry revenue share. Completing the loop, the higher revenue share will give music rights holders an even greater incentive to work with Apple. It was this goal to get close with music rights owners by going after industry revenue share that led Apple to bypass a free tier to Apple Music. This continues to be regarded as a controversial move given how Spotify has shown the ability to use its free tier as a tool to grow its paid tier.

By seeking to control much of the revenue in music streaming, Apple would be looking to make the streaming market that much less attractive for competitors. Removing the oxygen from the room would add further strain to music streaming companies' balance sheets. This is where Apple's rumored interest in Tidal comes into play. Any deal for Tidal would not be about getting access to the service's 4.2 million subscribers. Instead, Apple would be interesting in gaining access to Jay Z and friends. Losing out on Beyoncé, Rihanna, and Kanye West album exclusives over the past year irked Apple. While Apple Music eventually got access to most of the exclusive content, the amount of attention and breathing room that Tidal received was obviously not something Apple enjoyed. Acquiring Tidal and bringing Jay Z on board Apple Music will be a way for Apple to make Apple Music more attractive and capable of getting additional revenue share. (My complete analysis on the Apple/Tidal acquisition talks, including my thoughts on Tidal's current price tag, is available here.)

Step 4: Create an environment for independent artist sustainability. The last step for owning the music industry is arguably the most difficult but also the most intriguing. Up to now, we have largely focused on Apple attempting to gain control of the music industry by appealing to the top one percent of music artists, those who hold the most power in the industry. These artists are the ones that go on tour and are overall able to do things capable of shaking the boat when it comes to deals and news. In essence, these are the artists that are not relying on music streaming to find sustainability.

Missing from this strategy are indie artists, the musicians trying to find a way to not just reach their fans, but also find sustainability. I am not optimistic that paid music streaming is the answer for these artists. Something else is needed. This is where a platform that makes it possible for smaller artists to connect with their fans and then monetize their art can go a long way in adding sustainability to the music industry. If Apple is successful in acquiring the most valued music listeners, the company has a fighting chance to own such an indie platform given greater odds that people will spend money. However, as seen with the growing troubles surrounding the App Store and independent developer sustainability, it's clear that this step is still some distance from fruition.

The combination of owning a significant portion of the music industry's revenue share and having a platform that offers sustainability to all musicians would give Apple much of the available power in the music industry. By consolidating power, Apple would hold the strings to the entire music industry.

Potential Problems and Risks

With each step, Apple faces challenges and risks in its quest to own the music industry. Spotify continues to demonstrate skill and talent when it comes to understanding how consumers listen to music. The company should not be underestimated.

When it comes to exclusives, music rights owners have an incentive to make their music available to as many people as possible, potentially complicating Apple's strategy to bet big on exclusives. In addition, exclusives spread out across a number of streaming services are not user friendly, especially when viewed in light of the era of music exclusives found with brick-and-mortar retailers. An extensive expansion of music streaming exclusives may lead to a rise in music piracy.

For acquiring streaming revenue share, any friction in terms of Apple Music's design or user interface decisions may impact Apple's ability to sell the experience to customers. Finally, for independent artist sustainability, the biggest risk Apple faces is not dedicating enough resources to the cause. In addition, social will end up playing a key role in how artists find sustainability, potentially complicating Apple's efforts in this area.

Future Implications

If Apple is successful in terms of gaining control of the music industry for the second time in 15 years, there are quite a few significant implications. Apple would be able to pivot from legacy technology (paid music downloads) and win at a new business model (music streaming), despite being a few years late to the game.

Apple would utilize its user platform to establish a beachhead in a new technology and then leverage its balance sheet to find a more competitive position by grabbing revenue share. This strategy provides a framework for how Apple will look at its next content realm: video. While one can argue the music industry has certain qualities that make it much more friendly for a company like Apple to control compared to video, there are qualities both music and video share that Apple will look to exploit.

Apple's primary lesson from the early iTunes and iPod years was that a focus on the customer experience had an outsized impact on an industry that was undergoing significant change. It was much easier for Apple to offer a superior experience that customers valued when there was much chaos and unknown in the air. Apple's master plan to own the music industry involves adding chaos into the music industry by leveraging its $233 billion of cash. Apple continues to think big with its music ambitions.

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