As Apple Seeks to Disrupt Music, It Renews Google Rivalry

NEW YORK ( TheStreet) -- As Apple (AAPL) declares its intention to remake the music industry, it's also renewing a longstanding and sometimes bitter rivalry with Google (GOOG)  (GOOGL).

The new Apple Music app, which blared into being on Monday at the company's closely-watched Worldwide Developer Conference in San Francisco, will allow users to stream and sync music across all of their devices. 

The announcement comes just days after Google last week unveiled details about its new musician-focused service called  YouTube for Artists, which aims to help artists access data that would help them to earn money without a music label or streaming music services acting as middle men. 

The Apple-Google rivalry is clear to nearly anyone who has purchased a smartphone. The brands stand as opposite images: Apple's closed source iOS versus Google's open source Android operating system.

The competition, of course, hasn't always been so friendly. In 2012, the U.S. Federal Trade Commission fined Google nearly $22.5 million for allegedly skirting privacy settings on Apple's Safari browser. Steve Jobs famously declared "thermonuclear war" on Google in a remark quoted by Walter Isaacson in his 2011 biography of the legendary Apple CEO.

The two tech powerhouse technology companies are poised to offer music services that are unlikely to compete directly, though there is certain to be overlap. Google's YouTube for Artists would let artists track how many plays each of their songs receive, and where those plays are clustered on the globe. The service also expected to give artists "marketing advances," according to a report in the New York Post, citing unnamed sources.

Apple, meanwhile, is readying a $10 per month on-demand music streaming platform that would give users access to just about any song or album they choose. The service debuts on June 30 with a 3-month free membership. After that, Apple Music will be a $10-a-month service for individuals and a $15-a-month charge for families of up to six people.  

"It will change the way you experience music forever," said Apple CEO Tim Cook at Monday's Worldwide Developer Conference.

Both companies will be competing in different ways with Pandora (P), the Internet-radio services that reported 79.2 million active listeners as of March 30, and Spotify, the Swedish-owned streaming service with more than 60 million worldwide users.

Apple Music will allow users to buy or stream all of the content previously in iTunes. It will also include an around -the-clock radio station called Beats One, curated suggestions for listeners and a feature called Connect that allows artists to upload their own songs, videos and photos.

Google, meanwhile, is pitching YouTube for Artists as a more musician-centric alternative to the competition.

"YouTube is trying to present itself as a frictionless platform," said Mark Mulligan, a music industry analyst at MIDiA Research, a United Kingdom-based research and consulting company. "What YouTube is doing is trying to send messages to artists: look at the career that you could have that doesn't need a record label."

While streaming music services say they aren't trying to stop artists from getting their due either, there is a substantial difference between how YouTube pays content partners and how streaming services do. 

Currently, YouTube grants content creators 55% of advertising revenues from their videos. Pandora and other streaming services that hold statutory licenses pay artists using royalties, not advertising revenue.

According to SoundExchange, a non-profit independent organization that manages payments to artists and rights holders for Pandora and many other digital radio services, artists see 50% of the royalties from each of their recordings.

"We provide transparent, monthly statements and payments to artists and rights holders," SoundExchange said in an e-mail statement. The service also said it allows artists to see "exactly who is spinning their recordings, and how many times."

If artists know their play count numbers in addition to their payments, they can confirm that they've split royalties evenly with their record labels and other handlers.

While YouTube's move is unlikely to lure the best-selling artists away from big record labels like Sony (SNE) and Warner Music Group, it could reduce the role of smaller record labels as middlemen. Others in the music industry have pitched the service as a complement to music labels rather than a replacement.

"Anything that gives exposure to independent artists is a good thing," said Rich Bangloff, president of the American Association of Independent Music, a not-for-profit trade organization that represents over 30% of music sales in the U.S.

Some features from YouTube for Artists were originally introduced in March at the 2015 SXSW Music Conference. Among other data, the new Music Insights tool helps musicians to track the cities and countries where they have the most listeners.

YouTube has also started experimenting on a limited scale with an advertisement-free streaming subscription service called Music Key.

Come the fall, Apple Music will be available for Android devices. Maybe the rivalry has been put on hold.

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