Colegio Mayor de Nuestra Señora del Rosario

Facultad de administración
Global Marketing
Group 1
Valentina Jimenez Morales
Daniela Martinez Gonzalez
Marialejandra Pardo Niño
2021-2

Apple Music

1. Main countries of operation. Operation in Colombia (1.0)

The Apple Music app allows users to listen to music (it offers more than 75 million songs),
download music videos, see the lyrics of the songs and also has a radio function, in which
they can listen to well-known singers as the radio announcers.

-In which countries does it operate internationally?

Apple Music operates in 167 countries and regions, mainly in the United States, Canada and
Puerto Rico, and aims to reach places in Europe, Latin America and the Caribbean, the
Middle East, Oceania and Africa, where it is not already present.

The app currently has 82 million subscribers both locally and nationally, of which 40 million
pay for the service, while the remaining 8 million are free.

-How important is it in the industry?

Apple Music has helped artists get more recognition because it is easy to sign up as an artist
and add content to the platform. On the other hand, it has helped the record and music
industry to reach record levels of digital revenue.

-How does it operate in Colombia? (Local):

In Colombia, Apple Music does not charge monthly fees in dollars, but in Colombian pesos,
and has also adapted the app's subtitles to Spanish, along with the promotion given to some
albums or specific songs. In addition, most of the recommended songs are Latin rhythms.
2. Value chain. (2.0)

a) Offer a detailed description of the firm's Value Chain in its main countries of
operations.

Apple Music, a subscription-based music streaming service, now has 82 million subscribers.
That equates to approximately 8% of Apple's 980 million active iPhone users. It has more
than 75 million songs and provides exclusive content for its users through contracts with
artists who choose to release their music first on Apple Music before any other platform.

On the other hand, iTunes library integrates all music, whether previously purchased through
the iTunes Store, ripped from a physical CD or uploaded to iTunes Match, will appear in the
Apple Music library, providing the option to enjoy the user's music alongside Apple's
standard catalogue.

Apple is making significant progress in providing free audio quality upgrades for all
subscribers. Dolby Atmos and Spatial Audio support is being provided for all supported
songs from June 2021.

In addition, Apple Music allows you to download music on 10 different devices.

b) Value chain (Upstream Activities – Downstream Activities)

Main activities:

Inbound logistics: reception, storage and dissemination of the products they use for
advertising. Architecture for receiving and storing customer information for the digital media
company.

-Operations: Apple Music improves productivity and maximises efficiency through its
operations. At the heart of the company's operations is its platform and the management that
supports it. The company hosts all content on its servers, giving customers a way to listen to
what they want. In addition, it uses cloud architecture to host its content.

The company also connects users' various devices and allows customers to use their account
from all of their devices. It also has other features in its network that provide the best services
to customers, these include search and organisation functions, organising content into lists,
etc.
Apple Music operations also collect, process and use customer data to serve ads based on
customers' usage behaviour and make suggestions according to their taste.

-Outbound logistics: Apple Music's outbound logistics include its apps, where customers
can listen to content. The company has apps on both iOS and Android, which deliver content
to customers. The cloud infrastructure of its operations connects with outbound logistics to
provide customers with the fastest streaming services.

-Marketing & Sales: Within the Inbound approach, the main premise is to deliver value to
people through content and engage consumers with non-intrusive strategies based on their
consumer profiles.

Its best marketing strategy is attention, i.e., in every contact people have with the company,
Apple offers excellent customer service.

It has brand promoters everywhere and the investment in advertising is not too much
compared to its competitors, so it could be said that the company succeeds by falling in love
with its consumers.

-Services: Apple Music's business model offers a variety of services to customers and this is
one of the company's most popular features. Some examples of them can be "For You"
Section, Exploring, Discovering, Switching Costs. Due to its business model, most of Apple
Music's value starts after customers have paid for the platform, so providing these services
and satisfying customers is a crucial part of the company's value chain.

Secondary activities:

Infrastructure: in this part of the organisation we find quality management, finance and
accounting, legal services, planning and general management working together with Apple.
In addition, Apple Music also has cloud infrastructure, through which they operate.

-Human resources: Apple Music, like Apple, focuses on both hiring and paying well. This
has been the norm since the days of Apple founder Steve Jobs. Apple has always hired the
best. However, the HRM (Human Resource Management) style has changed a bit in Tim
Cook's time.
-Technology / R & D: Apple Music invests heavily in research and development from the
feedback it has collected from its users, this brand is known for technological innovation and
for the high quality and unique designs of its products. In order to stay competitive with
Spotify, the brand has to invest heavily in R&D. In addition, they also carry out activities
such as field testing, component design, feature design, process engineering and technology
selection.

-Procurement: For Apple Music, supplier selection involves obtaining copyright licences
from external production houses.

c) Value chain analysis (Competitive and Perceived Value)

https://es.digitaltrends.com/celular/spotify-vs-apple-music/

3. Firm's international competitiveness. (2.0)

● Suppliers:

-Independent artists, as well as those working in partnership with a record label.

-Digital intermediaries: responsible for creating content for Apple Music, handling the
Universal Product Code and the International Standard Recording Code, and distributing the
music through different channels.

*Apple pays the intermediary for sales and the intermediary pays the content owner.

● Substitutes:
-Spotify

-Deezer

-YouTube Music

-Google Play Music

● Buyers:

-Mass market

-People who like to listen to music at any time

-Fans of artists

-People who work in the music industry

● New entrants:

FrostWire: In this application you can search for the song you like, play it, and download it
to your phone's library. You also have the option to share your favourite songs with anyone
via Wi-Fi.

Tidal: You can listen to and download music, for this you need to pay a subscription fee,
without using streaming.

Napster: You can play without ads and download music. It is also possible to create playlists
and find "your Musicmatch" to find people with similar musical tastes.

● Market competitors:

While Apple Music has several competitors, its strongest competitor is Spotify, with whom it
competes both domestically and internationally. When compared to Spotify in terms of
subscribers, Apple has a disadvantage, as its competitor has 71 million subscribers, while
Apple has only 48 million subscribers, but this figure continues to grow.
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