Apple has proven very capable in executing multi year strategic plans leveraging in one area to establish a new product or service in another. Apple has also pr

Apple has proven very capable in executing multi year strategic plans leveraging in one area to establish a new product or service in another. Apple has also proven adept to managing Eco systems along a vertical value chain - making sure a lot of the spoils go to them but also making sure their suppliers can manage. Apple is at the moment lagging in music streaming despite huge investments in iCloud, Music Match and an entrenched iTunes (getting pushed in my face every time I plug my phone in). UX matters and iTunes is not convincing. But this can change. Developing a streaming client is not rocket science if a team would freed from backwards compatibility concerns. Apple has a lot it can leverage in the music industry and not by accident: - Headphones, Beats Playlists - Audio supplier relationships - Music, Movie and Book publisher contracts and relationships - iTunes client - App/iTunes customer billing relationships - iPhone platform - leading in higher income customer households - App store - monopoly on iOS and growing on OSX - Brand - War-chest Apple is in a tricky position here politically. They got their hands slapped when trying to establish a pricing regime in the book business while being far from dominant Apple was working with dominant players (who each controlled a large set of IPR artwork monopolies). The big hurdle is regulatory. Anti trust law allows building monopolies organically but frowns on using power like acquisitions by industry leaders or leveraging one strength into another industry with aggressive loss-leading pricing etc.. Why are we talking these days about setting prices here in a free market in the first place? Considering the power on the distribution side almost all artists have not enough power to make level deals. That was always the case but for a long time artists were free to take their business elsewhere. Then publishers concentrated. Now streaming channels take in part their place. Their number is not large either. Apples proposal for higher payment for artists may make sense for artists and the whole value chain up to our ears. It is very problematic for newcomers like Spotify who rely on low costs to acquire new customers. Their lure is the free tier. Apple does not need this as much as it has already a billing relationship and less "free" drives demand. Also let's be clear there is no real "free". Spotify is loss leading by VCs, advertisers in case of radio or fees in case e.g. Germany. Apple can't be happy. Unlike a minor new player like Spotify they would get into regulatory hot water with aggressive loss leading streaming. Changing the rules to higher streaming fees would shift everything towards paying platforms. Apple demands a 30% cut and so far has held the line and has forced Amazon and Spotify to sell their media content outside their App. That again is something regulators will look closely at. It will be interesting to see whether Apple can square the wheel.