A Market Analysis for Apple Music
Full Sail University
Project & Portfolio II: Business and Marketing
30th April, 2023
EXECUTIVE SUMMARY
This market analysis report aims to provide insights into the market position of Apple Music and determine potential opportunities and threats for the company. This report presents key findings and conclusions through a combination of internal and external research methods, including a competitive analysis, STEEPLE and SWOT analyses, and industry outlook. Based on the findings, the report provides strategic recommendations to Apple Music, including developing personalized playlists and partnerships with independent artists to improve its market position and increase its user base.
OBJECTIVE
This market analysis report assists Apple Music in enhancing its market position and expanding its user base by examining the current state of the music streaming industry, evaluating Apple Music's position within the industry, and identifying its strengths, weaknesses, opportunities, and threats. The report provides recommendations on how Apple Music can improve its market standing and attract more users.
RESEARCH METHODOLOGY
This market analysis report is based on both internal and external research. The internal research involved analyzing data and information provided by Apple Music, including financial statements, user demographics, and user behavior. The external research involved gathering data and information from reputable industry sources, including market research reports, industry associations, and news articles. This study was conducted during the month of April 2023, as well as a majority of the sources were from the last three years written by third-party sources.
RESEARCH AND KEY FINDINGS
Apple Music is a music streaming service offered by Apple Inc. that allows users to stream and download music from a library of over 75 million songs (O’Boyle, 2023). Apple Music's brand positioning statement is "Stream over 75 million songs, ad-free with Apple Music."
Industry Outlook: The music streaming industry is expected to continue its growth trajectory in the coming years, with an estimated CAGR of 17.8% from 2021 to 2028 (Newsroom, 2023). Key drivers of growth include increasing internet penetration, rising disposable incomes, and growing adoption of mobile devices (Curry, 2023).
Target Market: Apple Music's target market is primarily young adults and teenagers, focusing on high-income earners (Mrkonjić, 2023). Apple Music has a slightly higher percentage of male users, with 54% being male and 46% female (Götting, 2022).
Competitive Analysis: Apple Music faces significant competition from other music streaming services, including Spotify, Amazon Music, and YouTube Music. While Apple Music has a smaller market share compared to Spotify, it has a higher average revenue per user (ARPU) due to its focus on high-income earners (Curry, 2023).
STEEPLE Analysis: Apple Music's STEEPLE analysis revealed several key factors that could impact its market position, including changing consumer behavior, technological advancements, and regulatory changes. In addition to the factors mentioned, Apple Music's STEEPLE analysis also identified the impact of economic factors, such as fluctuations in
disposable income and currency exchange rates (St.John, 2023). Another factor is environmental concerns and sustainability, which are becoming increasingly important to consumers and may influence their purchasing decisions (Apple Inc., 2022). Also social factors such as cultural trends, demographics, and lifestyle changes can also affect Apple Music's market position, as well as political factors such as trade policies and government regulations. (Bizzaco, 2022) Finally, legal factors such as copyright laws and intellectual property rights can impact the music industry as a whole and Apple Music's operations specifically (Apple Inc., 2023).
SWOT Analysis: Apple Music's SWOT analysis revealed several key strengths, including a strong brand and financial backing from Apple Inc. However, it also needs several areas for improvement, such as limited user-generated content and a smaller music library compared to competitors. Opportunities include expanding into new markets and developing personalized playlists (Grigore,2022) , while threats include increasing competition and changing consumer behavior. (TechHive, 2022). In addition to the strengths, weaknesses, opportunities, and threats mentioned in the SWOT analysis, Apple Music also has the potential to leverage its integration with Apple's ecosystem of products and services, including the iPhone, Apple Watch, and HomePod, to increase user engagement and retention (Apple Inc, 2022). This could be done by enhancing the user experience through seamless integration and cross-promotion of Apple Music with other Apple products and services. Apple Music could also consider developing exclusive content partnerships with major music labels and artists, similar to what its competitor, Tidal, has done with its "Tidal X" program (This could help differentiate Apple Music from its competitors and attract users who are interested in exclusive content not available on other platforms. (Capoot, 2022). Apple Music could also consider expanding its services beyond music streaming to include additional features such as live performances, music videos, and podcasts, which would provide users with a more comprehensive music experience and help to differentiate the service from its competitors furthers (Newsroom, 2021).
Based on the research and analysis conducted, it can be concluded that Apple Music is in a strong position within the music streaming industry. However, the company faces significant competition from other music streaming services and needs to focus on developing personalized playlists and partnerships with independent artists to increase its user base and improve its market position.
RECOMMENDATIONS
To improve its market position, Apple Music should consider the following recommendations:
Develop personalized playlists: Apple Music should develop personalized playlists based on user listening behavior and preferences to improve user engagement and retention.
Partner with independent artists: Apple Music should partner with independent artists to offer exclusive content and differentiate itself from competitors.
Expand into new markets: Apple Music should consider expanding into new markets, such as Asia and Africa, with a growing demand for music streaming services.
Improve user interface: Apple Music should improve its user interface to make it more intuitive and user-friendly, making it easier for users to navigate and discover new music.
Invest in marketing and promotion: Apple Music should increase its marketing and promotion efforts to raise brand awareness and attract new users.
Integrate with other Apple products: Apple Music should further integrate with other Apple products, such as the Apple Watch and HomePod, to provide a seamless user experience across devices.
Offer more exclusive content: Apple Music should continue to offer exclusive content, such as concerts, live events, and interviews, to attract and retain users.
Create a social aspect: Apple Music should add a social aspect to its platform, allowing users to connect and share music with friends and family, which could increase user engagement and retention.
SMART goal: Increase user engagement by 20% within the next 12 months by implementing personalized playlists and improving the user interface, increasing user retention and revenue growth.
Future research: Conduct further research into emerging markets to determine the feasibility of expansion and user preferences and behavior in those markets. Additionally, research into potential partnerships with independent artists and social features could provide valuable insights for future development.
REFERENCES
Apple Music Logo. The most famous brands and company logos in the world. (n.d.). Retrieved April 23, 2023, from https://logos-world.net/apple-music-logo/
Apple reports fourth quarter results. Apple Newsroom. (2023, March 30). Retrieved April 23, 2023, from https://www.apple.com/newsroom/2022/10/apple-reports-fourthquarter-results/
Apple services entertain, inform, and connect the world in unprecedented year. ApplezNewsroom. (2021, January 26). Retrieved April 23, 2023, from https://www.apple.com/newsroom/2021/01/apple-servicesentertain-inform-and-connect-the-world-in-unprecedented-year/
Ashleycapoot. (2022, July 15). Apple Music subscribers are getting access to exclusive content from artists like Carrie Underwood. CNBC. Retrieved April 23, 2023, from https://www.cnbc.com/2022/07/15/appleintroduces-apple-music-sessions-giving-subscribers-more-content.html
Curry, D. (2023, February 1). Apple Music Revenue and Usage Statistics (2023). Business of Apps. Retrieved April 23, 2023, from
https://www.businessofapps.com/data/apple-music-statistics/
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Götting, M. C. (2022, January 18). Apple Music users by gender in the U.S. 2018. Statista. Retrieved April 23, 2023, from
https://www.statista.com/statistics/822927/apple-music-user-gender/ Grigore. (2022, April 4). The reasons behind Apple's customer loyalty and high NPS. Retently. Retrieved April 16, 2023, from https://www.retently.com/blog/apple-nps/
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Mrkonjić, E. (2023, March 14). Apple Customer Demographics: Steve Jobs' legacy in 2023: Serpwatch. Serpwatch.io. Retrieved April 23, 2023, from https://serpwatch.io/blog/apple-customer-demographics/
O'Boyle, B. (2023, April 19). What is Apple Music and how does it work?
Pocket. Retrieved April 23, 2023, from https://www.pocket-lint.com/what-is-apple-music-and-how-does-itwork/#:~:text=Apple%20Music%20is%20a%20subscription-based %20music%20streaming%20service%2C,place%20-%20even %20songs%20ripped%20from%20a%20CD.
TechHive. (April 12, 2022 Tuesday). Apple Music review: High-quality sound and intense curation are the attractions. TechHive (US).
https://advance-lexis-com.oclc.fullsail.edu/api/document?
collection=news&id=urn:contentItem:656R-DM21-DY58-D2V7-0000000&context=1516831.