Apple’s iTunes Radio is certainly late to the game, which brings to rise questions on how they will get consumers to switch from the already established online radio services. Apple needs to know what consumers really want from an online radio service and then go about providing more value while keeping the switching costs low.

Here is an interview with Jason Herskowitz, contributor to the music platform Tomahawk, and co-founder of Hatchet Industries. He discusses iTunes Radio as it compares to its established competitors including Pandora and Songza.

Much of the critical reception of iTunes Radio has consisted of balking at its similarities to Pandora. Industry pundits and market analysts are saying that Apple isn’t being
 innovative enough; it developed a “copy cat” feature, not a game-changing product. 

What was your initial reaction to iTunes Radio?

Herskowitz: This was my question, as I’m so close and tied into this market, is: how much do the “normal” people in the world know about or have brand affinity for Pandora? And if those people do, is Apple going to have something that is unique enough to get those users to switch from what they are already doing with Pandora. Those are all the things that raced through my mind when I first heard about iTunes Radio. As I got closer and started to realize that this isn’t a stand-alone app. This is actually built within the music app itself. I started to see more of the value proposition. The fact that of the mainstream users, who many are still in their iPod or iPhone music app and hitting shuffle and listening. The fact that there is radio programming within that same app, built on top of that same catalog. Is that moving the entry point far enough upstream that it’d siphon off some of those Pandora users?

Switching Costs

With that said, do you think Apple’s goal with iTunes Radio is to get Pandora users to switch or lock-in existing users to the music app?

Herskowitz: I think that most average iTunes users have used Pandora at some point or another. So I think Apple has to be thinking a little bit about switching. Because as you know and I know, and everybody else knows, the fact that all of the normal people that we know, that are not in this industry, are all generally aware of Pandora and have used it at least once and some of them very often. So I think Apple does need to think about getting those users to switch. Obviously, those that haven’t switched yet, or don’t know about Pandora yet, then great, they can get in there as well. But iTunes Radio is also going to help drive incremental download sales, which is of course, as Apple tries to extend the life of download sales as long as they can: this affords them the opportunity to do that. And of course, iTunes knows exactly how many iTunes downloads Pandora sells. Those are all numbers that they are very aware of, and they see how much sales Pandora drives, so they can think about: “If we can get upstream of Pandora…” There’s going to be benefits to them in the kind of longer play. Ultimately, I think Apple’s play is much more about the iAds platform than about being a music service for the sake of being a music service.

To read the full interview, visit Sidewinder.fm.

 

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