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Apple Inc. (AAPL) Flies With Dr. Dre’s “Compton”, Its First New Album

Apple (AAPL) Music

Apple Inc. music streaming service, Apple Music is moving ahead at a grand pace as its crew of celebrity artistes continue to make top hits. The New York Times reports that Dr. Dre’s album “Compton: A Soundtrack” has recorded 25 million streams globally in the first week of its release. The grand number silences fears that the firm might have come late to the music streaming service and that its lack of a free-tier might push users away.

Apple (AAPL) Music

The album also sold about 500,000 downloads through the iTunes store. The firm is glad the with the performance of the album considering the fact that it was locked down within Apple. Jimmy Iovine, the brain behind Apple Music says, “We’re beginning to show what we can do in terms of communicating music to a worldwide audience and helping artists at the same time.”

Dr. Dre is, since the buyout of Beats, an exec at Apple, making Compton the most streamed album, and likely the best, that has ever come out of a Cupertino board room.

Better late than never

When Apple announced its music streaming service in June, the major hurdle that it had to jump was its late start to the music streaming space. Apple redid how music is being consumed with the iPod and iTunes store, but it watched idly as music streaming kicked off. By the time it wanted to start streaming music, there were already established names such as Spotify and Pandora in the streaming space.

The fact that Apple Music was a paid-only service also brought extra fears because the established players had a free-tier where people could stream music for free but with ads. Apple depended on its strong brand and the sheer size of its marketing power to get the music service heard. It then provided a three-month free trial to get people into the door to have a feel of the service.

Google doesn’t want Apple to succeed in the music streaming space and the search giant launched a free version of its Play Music service to distract users away from Apple Music. However, Apple turned to an army of indie artistes for fresh content and it endeared itself to fans when it obliged Taylor Swift in agree to pay royalty for free streams.

The jury has a verdict on Apple Music

The recent performance of Dr. Dre’s album, though modest, shows that Apple  Music has what it takes to hit it big in the music streaming space. For one, the service has kept itself in the news with big names such as Kanye West’s new album “Swish” and the current Dr. Dre hit. Apple reported 11M subs recently but it has about 800M customer accounts around the world; hence, there’s still room for its music service to grow going forward.

Apple doesn’t really care about the revenue from the streaming service (it means little in the grand scheme of things at the firm). However, a FBR Capital analyst Daniel Ives says that “the name of the game for Apple around music is expanding its tentacles further into the consumer world and helping build out a broader stream of content.”

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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