MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. Only MBW+ subscribers have unlimited access to these articles. MBW Reacts is supported by JKBX, a technology platform that offers consumers access to music royalties as an asset class. The following Reacts analysis comes from Ryan Blakeley, a Ph.D. in Musicology candidate at the Eastman School of Music. His research investigates how music streaming services are affecting listening habits, creative practices, and the music industry.
Classical music has struggled to adapt to the streaming era. Even as the record industry experiences tremendous growth with the popularity of services like Spotify and Apple Music, classical music has, in many ways, been left behind.
From inequitable royalty models to inadequate metadata frameworks for search and recommendation engines, the major music streaming services have failed to provide a satisfying option for classical music listeners—until now, according to some.
A year and a half after acquiring the classical music streaming service Primephonic, Apple finally debuted Apple Music Classical on March 28 as a standalone app available to existing Apple Music users as part of their $10.99/£10.99 per month subscription fee.
The new service promises to deliver a better user experience for classical fans, featuring accurate searches and recommendations, hundreds of expert-curated playlists, exclusive recordings, educational podcasts, hi-res and Spatial Audio, editorial content, and more.
Many listeners are understandably rejoicing that classical music is receiving the reach, resources, and representation that a major brand like Apple can provide.
While there are a handful of other dedicated classical music services, such as Idagio, Naxos Music Library, STAGE+, and Tempso (along with video services like medici.tv and Symphony), none can match Apple’s scale and visibility.
But will Apple Music Classical really solve classical music’s streaming problem?
To answer that question, it’s worth thinking about why Apple is interested in classical music in the first place and what it means for classical musicians and the broader streaming industry.
Why Classical Music?
At first glance, classical music is an unlikely target for one of the world’s biggest companies. After all, classical music is a niche market that is not nearly as lucrative as mainstream genres like pop, rock, and hip-hop; Nielsen Music and MRC Data reported that classical music accounted for only 1% of album sales in the US in 2019. This is not to say that classical music is economically insignificant—a study by MiDIA, sponsored by Idagio, estimates that the global revenue for classical music in 2018 was around US$384 million—but it does pale in comparison to the billions of dollars brought in by popular music.
Music streaming has never been a big moneymaker for Apple, though, even if Apple Music now boasts 88 million subscribers. Apple Music is often described as a loss leader, and the company’s CEO Tim Cook even acknowledged that “we’re not in it for the money” in a 2018 interview with Fast Company.
The chances that a niche genre like classical music will generate meaningful revenue for Apple, then, are next to none. Instead, music is a gateway to Apple’s profitable product ecosystem, leading consumers to iPhones, AirPods, HomePods, Macs, Apple Watches, and the myriad services those products offer (though as of now Apple Music Classical is iPhone-only).
Since most music streaming services share similar costs and content, Apple Music Classical may provide enough differential value to incentivize listeners to subscribe to Apple instead of competitors like Spotify, Tidal, or Qobuz. From a business perspective, it makes sense for Apple to target the classical music demographic: classical music’s perceived cultural prestige aligns with Apple’s reputation as a high-end brand, and the genre’s listeners are more likely to be affluent audiophiles with disposable income.
What About Artists?
If classical music is not directly profitable for Apple, though, what does that mean for the artists? Streaming has been widely criticized for the low payout rates dictated by major record labels, providing paltry compensation for all but the biggest stars (although Apple Music reportedly pays artists more than many other services). As a niche genre, classical musicians and labels often struggle to earn adequate income through streaming, and that is unlikely to change with Apple Music Classical’s subscription model.
Lukas Krohn-Grimberghe, founder and CEO of the now-defunct classical streaming service Grammofy, shared his thoughts over email about Apple Music Classical being a standalone app without a separate subscription. He expressed excitement about Apple’s foray into classical music but reflected that “from a music licensing standpoint nothing changes. Not for Apple, not for artists and rights holders. Revenue is still pooled with all of Apple Music’s revenue and then prorated based on the same model that has dominated the industry for 10+ years.” He went on to note that the Apple Music subscription is “too high a price point for a standalone niche genre music app (as Primephonic, Grammofy and Idagio can attest),” making the new service unlikely to attract listeners who are brand new to streaming.
Krohn-Grimberghe elaborates elsewhere that “as long as Apple is only converting users of its competitors, the overall money in the pot remains equal and artists will receive exactly the same payouts. The only way artists might benefit from this new app financially is if the ratio of classical music listening to listening of other genres is significantly altered – which I would think is very unlikely – or if a huge number of classical music listeners that have not yet been music streaming subscribers before will now purchase an Apple Music subscription.”
In other words, it is doubtful that Apple Music Classical will tangibly improve most classical musicians’ livelihoods. This is especially troubling since the royalty model used by most streaming services is based on the total number of streams an artist receives rather than listening duration, which disproportionately disadvantages classical music’s tendency toward longer tracks; one stream of a two-minute pop song, for instance, earns as much money as a twenty-minute symphony movement.
These are problems that some niche classical streaming services have already grappled with. Grammofy, Idagio, and Primephonic each negotiated a per-second royalty model with record labels to more equitably distribute money to musicians—a model that Apple has seemingly not adopted for Apple Music Classical.
Perhaps a more fruitful avenue for supporting classical musicians would be to introduce new revenue streams altogether. Apple, for its part, announced partnerships with a number of orchestras and famous musicians, including Yo-Yo Ma and Hilary Hahn. Idagio has also expanded its offerings to include exclusive concerts and interactive online courses led by classical stars.
I asked Idagio’s co-founder and CEO Till Janczukowicz about the challenges that classical musicians face in the streaming era and what makes Idagio unique.
“Conventional streaming services are made for audiences, not for artists. At IDAGIO, we always think of both artists and audiences simultaneously,” Janczukowicz wrote back. “This starts with how we remunerate – user-centric and per second. And it leads to new formats that connect artists and fans directly. For example, the live courses with Thomas Hampson, Marina Mahler or Jamie Bernstein. When we started IDAGIO in 2015, it was not our goal to build a streaming platform.
“Our goal was to connect artists and audiences directly. Building a streaming platform was only step 1. The next steps will support artists in earning money and IDAGIO will increasingly foster togetherness of artists and audiences.”
A Need for Niche?
In some ways, niche classical services like Idagio offer promising alternatives to the standard streaming model. They are not beholden to Big Tech and can implement features that would be unfeasible in mainstream services, potentially bringing in more money for artists and improving the user experience.
At the same time, however, niche streaming services are often highly precarious. It costs millions of dollars to build and maintain a streaming service, including infrastructure, licensing, and marketing expenses. Niche services must also compete with massive tech companies like Apple, Amazon, Google, and Spotify that already have a stranglehold on the streaming market.
It doesn’t help that the audience willing to pay a separate subscription fee for a classical-only service is quite limited. Pierre Pariente, co-founder and CEO of the classical service Tempso, tells me that “in terms of user experience, I see the multiplication of streaming subscriptions as an issue, and a holistic approach to music as a requirement. Many classical music listeners now listen to more than just classical music and want one streaming subscription to cover all their music consumption.”
Tempso’s solution as a “small-scale startup with extremely limited spending” was to create improved classical music interface and engine that layers on top of existing services like Spotify and Apple Music, obviating the need to build a streaming service from scratch. “We designed our system, including the database, app, and design, as a white-label service, allowing us to connect Tempso to any existing streaming platform such as Qobuz, Tidal, Amazon Music, and YouTube, in addition to Apple Music and Spotify today,” Pariente says. “We believe that Tempso, in partnership with one of those platforms, could become a strong alternative to Apple Music Classical.” (It is worth noting, however, that since Tempso is currently free for Spotify and Apple Music users, it does not generate its own revenue yet.)
Considering that even the world’s most popular streaming service, Spotify, is not profitable, it can be extremely difficult for standalone classical services to turn a profit or prove their value and growth potential to investors. For these reasons, many previous attempts at classical music streaming services, such as Grammofy and Composed, were unable to stay in business.
Primephonic took the “if you can’t beat them, join them” approach, getting acquired by Apple and integrating its features into what is now Apple Music Classical. As Primephonic’s co-founder and CEO Thomas Steffens said in the press release for the company’s acquisition, “artists love the Primephonic service and what we’ve done in classical, and now we have the ability to join with Apple to deliver the absolute best experience to millions of listeners.”
It is true that Apple Music Classical will undoubtedly benefit classical music in many ways. Classical experts and newcomers alike will appreciate the app’s robust features, and the service will bring the genre renewed visibility and accessibility. Given how fraught niche streaming startups can be, perhaps only a massive company like Apple can sustain a dedicated classical service.
At the same time, however, it is unclear to what extent Apple is invested in economically supporting classical artists. Apple Music Classical may also stifle the few niche classical streaming services still standing, further consolidating power over music distribution in a multi-trillion-dollar company. In these ways, Apple’s new service potentially perpetuates some of the underlying inequalities of the music industry.
Many questions remain unanswered. Will other major streaming services like Spotify follow Apple’s lead and embrace classical-specific features? How will niche competitors like Idagio fare in the wake of Apple Music Classical? Could different genres of music, like jazz, also see standalone Apple Music apps in the future?
Oliver Schusser, VP of Apple Music and Beats, recently announced that “this is just the beginning” for Apple Music Classical. Hopefully future developments will also include new economic opportunities for classical artists, whether through a different royalty model or even more direct partnerships with classical musicians, labels, and performing organizations. Because while Apple Music Classical is a step in the right direction, classical music’s streaming problem will not be so easily solved.
Music Business Worldwide
