Osakwe blog

Apple's jump into social networking not a slam-dunk

DENVER (Billboard) – For all the innovations Apple has brought to the market through the years, it's also a pretty good follower.

The iPod is a perfect reflection of this. It wasn't the first MP3 player to hit retail shelves. It was just the best, and it blew away the other devices to the point of obscurity. Now, Apple arrives late to the social networking party with Ping, the new music-focused social network for iTunes it announced September 1.

Major-label executives declined to comment on Ping, but they're no doubt watching it closely, given how important social networking has become as a tool of music discovery and to drive sales.

Ping comes on the heels of other similar attempts to blend music appreciation with social networking, like Microsoft's Zune, iLike, MySpace Music, MOG and Rdio. But will Apple do to them what it did to rival makers of MP3 players?

That's unlikely. In contrast to the emerging digital media player market that the iPod was quick to dominate, social networking already features entrenched giants, including Facebook, Twitter and a down-but-not-out MySpace. And talking about which recording artists users are listening to or planning to see in concert is already a focal point of interaction on those sites.

Ping's initial impact will hinge on Apple's ability to convert the 160 million iTunes account holders into registered Ping users. All current account holders can create a Ping profile using the same user name and login as on their iTunes account.

But that doesn't mean they will. There are plenty of social networks already with as many if not more users than iTunes. Facebook has about 500 million users worldwide. MySpace has 122 million. Twitter has more than 100 million.

MySpace has the most to be concerned about, having risen to prominence largely on the strength of musicians using it to communicate with fans. It already has taken a hit on the social networking front from the rise of Facebook. With iTunes attacking its music flank with Ping, MySpace will face even greater challenges.

But it still has some points in its favor. Artists of all stripes still maintain MySpace profiles. And MySpace Music, its joint venture with the major labels and Sony/ATV Music Publishing, offers artists far more promotional and media assets than Ping does.

TICKET ADVANTAGE

MySpace also has a leg up on concert ticketing. Ping has 17,000 concert listings provided by Live Nation, but MySpace's Ticketing & Events service -- introduced in April -- includes not only Live Nation but also several alternative ticketing vendors to provide a broader depth of concerts by the kinds of emerging acts that have defined MySpace's history.

Meanwhile, Facebook appears to have the least to worry about, having become to social networking what Apple is to digital music. Facebook hasn't yet formulated a music strategy of its own, so Apple's move into this space doesn't really hurt it. In fact, should Apple ever integrate with Facebook Connect so that the activity on Ping can be shared across Facebook, Apple's move could help it by providing a turnkey music solution.

It's not yet clear what effect Ping will have on the new music services that have launched with a social strategy, such as Rdio, MOG and Spotify. Their advantage is a concentration on full-track, cloud-based streaming, something Apple has yet to offer despite its December acquisition of streaming music service Lala.com. Apple soon hopes to offer 90-second song samples.

"(It) completely validates Rdio's social approach to discovering music through people," Rdio COO Carter Adamson says. "But in our view, sharing a short clip doesn't amount to sharing music."

Another thing to consider is what the new social network will mean for iTunes, the No. 1 music retailer in the United States. For one thing, it strengthens iTunes!B music discovery functions, historically its weakest link. Instead of displaying the 10 top-selling tracks, albums and videos, as iTunes has long done on its home page, Ping will provide a customized list of recommendations based on the purchasing histories of users and their friends. That could help boost music sales at iTunes.

"There have been 10 billion songs downloaded from iTunes and 275 million devices sold," a senior executive at a rival social network says. "So that means they've gotten 36 purchased songs from each device. That's not a lot."

Additionally, Ping helps prevent users from ditching iTunes for one of its more socially focused startup rivals as it works on its cloud strategy. But until Apple adds such a service, or another way to stream full songs in iTunes without having to buy them, Ping will likely be limited to the iTunes faithful.