Many expected Apple to announce a streaming music service today that would allow users to stream songs from iTunes to multiple devices, much as they do with Internet radio services such as Pandora. Apple did launch “iTunes in the Cloud” at its annual developers’ conference, but the emphasis was not on streaming music. Instead, as part of Apple’s iCloud offering, iTunes will let users buy music once and have it automatically downloaded to multiple devices, as well as backed up on Apple’s servers. Apple CEO Steve Jobs made no mention of a Web interface through which users could access this music.
Apple certainly has the technology to launch a streaming music service. In December 2009, it bought the music startup Lala, which sold “Web songs” that users had the right to stream through their browser but not download. In March, Amazon began offering a Cloud Drive that let users access music from multiple devices or stream it through a Web interface. Google followed suit, announcing a music service to allow users to access songs through the Web.
It is possible that the record labels from which Apple has to license the music it sells were unwilling to allow music streaming. But another important factor that could have deterred Apple is mobile carriers’ movement away from unlimited data plans. A streaming version of iTunes could have hugely increased the amount of data that carriers would be expected to carry. The largest carriers in the U.S., AT&T and Verizon, both cancelled their unlimited plan in June 2010. T-Mobile and Sprint both still offer unlimited plans. Today, T-Mobile says, the average 4G smart-phone user consumes about a gigabyte of data per month. That number could change significantly if a popular service like iTunes truly moved to the cloud.
“When the iPhone launched, it had no Netflix client, no Rdio, no Pandora, no streaming baseball—and AT&T was still almost brought to its knees,” says Stephen O’Grady, an industry analyst at RedMonk. “Carriers witnessed what happened to AT&T. The days of unlimited numbers appear to be numbered no matter what.”