Will Apple's iTunes 10 Ping Music Social Network be Successful or a Failure? Will Steve Jobs' Marketing Strategy Succeed or Fail?

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New music discovery has been the biggest challenge facing the music industry, especially with the decline of terrestrial radio and the flood of new media.

Steve Jobs announced the Ping social networking service in an attempt to solve the "discovery of new music dilemma." Ping is integrated within iTunes 10. However is Ping really a killer feature threatening the likes of MySpace, Last.fm or Pandora?

Ping is a music-centric social networking service that features a Facebook-like newsfeed, detailing what your friends and family are listening to as well as buying. After you opt-in to use the service, Ping will monitor your musical habits and broadcast them to all your friends and family that are following you.

Steve Jobs described Ping as a "Facebook and Twitter meets iTunes" at the iPod AppleTV event in San Francisco. "But it’s not Facebook, it’s not Twitter. It’s a social network all about music.”

Ping allows you to become a  tastemaker or DJ to your followers. It also can help you discover new music through others by following people in that niche genre and look at their recommendations. You can even post reviews of new songs and your followers can listen to the track and buy it with one click through iTunes.  In addition, Ping offers customized song and album charts,  and concert listings powered by LiveNation connected through every listener's playlist.

Why does Steve Jobs think Ping's social recommendation is important? Numerous studies have suggested that the strongest recommendation is that of a friend. A March study by the market research company Morpace found that 2/3 of Facebook users say the social network influences their buying decisions.

Product reviews make or break purchase decisions, suggest survey data from ChannelAdvisor Corp. Their survey found that 92% of buyers read product reviews when considering a purchase. Of those consumers, 46% said product reviews influenced them to make purchases, while 43% said product reviews deterred them from buying. 3% said reading reviews did not influence their purchase decisions.

In 2009, Opinion Research Corp found that 84% of buyers were influenced by online reviews. In July 2010, another survey by Gartner found that consumers use Twitter and Facebook to actively research purchasing choices.

What are the implications for Apple, the world's biggest music retailer? Ping could become a powerful music-purchasing recommendation engine given that iTunes already has 160 million purchase-friendly users and close to surpassing the 12 billion song sale milestone.

Ping also allows artists to have their own band pages, where they can post their latest songs, concert dates and news. Exclusive tracks can be posted to Ping and fans will be notified with the one-click "Buy Now" button.

The anatomy of the intrigue to Ping is obvious. It is conversion-based. In other words, what will most likely lead to a sale? Would an artist prefer Facebook fans ("Like"), Twitter followers ("Retweet") or Ping followers ("Buy")? The "Buy Now" sentiment resonates hard for musicians who struggle to make a living online.

Just like Facebook, Ping can leverage its massive user base to add new and competitive social features. Ping already has "Like" and commenting features like Facebook and a "Follow" system like Twitter. Apple launched Ping because Steve Jobs understands the value of social networks and how well Apple can leverage them to drive music sales and ultimately sell more devices - the bread and butter of Apple. The "Buy" buttons right inside conversations is an indication of the commercial intent that Apple is trying to take advantage of.

Privacy might become an issue for Apple though, since the premise of Ping is that others can observe your buying behavior. Facebook's Beacon debacle can serve as an example of what not to do. Beacon was part of Facebook's advertisement system that sent data from external sites to Facebook, for the purpose of allowing targeted advertisements and allowing users to share their activities with their friends. This did not pan very well for Facebook users. Steve Jobs made special mention of the privacy tools in Ping: "[You can] get as private or public as you want. Privacy is super simple to set-up, anyone can do it."

Why Apple iTunes' Ping Music Social Network is Important. 10 Reasons why Ping will be Successful. 

  1. iTunes has 160 million users. The massive user-base ensures that the network effect is significant enough to bring in revenues to the music industry, since iTunes users are the most likely to buy and enjoy higher purchasing conversion rates than other networks. u can not overlook that iTunes has sold 12 billion songs. However, the real question is how many of these users are active? 
  2. Ping is focused on music exclusively. Other networks such as Facebook and Twitter are primarily based on social activities not music. Myspace has a significant music focus, but has many other distractions and media that take away from the music focal point. 
  3. Ping is focused on music discovery. Whether it is friend recommendations or music posts, the driving force of Ping is to help new music be discovered and shared. 
  4. The Ping user demographic is buy-friendly, legal and music-focused. Users on iTunes have a credit card on file and are responsible for most of the legal digital purpose for the music industry.
  5. iTunes controls the music content. Since iTunes has the advantage of being the direct seller of the content, it can best leverage its social network to maximize sales using direct sales and one-click impulse buying. No middle-men necessary.  
  6. Ping can cross sell other Apple products or affiliate partner services. Ping users will be exposed to other Apple-centric marketing efforts, such as selling new hardware devices (iPod, iPad, AppleTV, iPhone). Also partners such as LiveNation can cross-sell tickets to a music-centric customer. iTunes store offers other content, including movies, TV shows  and ebooks. Apple iTunes not only sold nearly 11.7 songs, it has also  sold 450 million TV shows , 100 million movies and 35 million e-books.
  7. Apple's userbase is evangelical. They will endorse Apple products or services no matter what.
  8. Apple has the iPhone advantage to gain social networking lead. Mobile and smart phones are still at their infancy. There is no clear-cut mobile social network dominant force even though Facebook is in the lead. Apple's service is now compatible with the more than 150 million iOS-compatible devices worldwide.
  9. Apple controls distribution. It is an Apple world. No-one can play without Apple's permission.
  10. Apple control their hardware devices which work seamlessly with iTunes. iPhones, iPads, iPods and other devices are designed to work with iTunes and take advantage of its distribution channel.
  11. It is only the beginning. Apple will make improvements. Every launch has its glitches, as the iPhone or iPad examples illustrates. If it is one thing that Apple does well, it is that they take pride in improving their products and services. They are customer focused.
  12. Simple and easy-to-understand interface. Ping's interface is clean and easy to figure out.
  13. Apple is still considered cool and cutting edge. This is the reason many will flock to Ping to check out what all the fuss is all about. Apple's statements confirm their mantra: "Everyone who loves music is on Ping."
  14. Apple will help artists make more money and fight piracy. By building a social network that is buy-friendly, Ping can decrease piracy and educate more consumers about the benefits of buying legal music.
  15. Cut the middlemen out. Myspace artist pages have links going to iTunes or Amazon MP3. Why is the middleman needed?

 

20 Reasons Why Ping will Not be Successful

Not everyone is convinced though that Ping is the next revolution of music discovery.

  1. Another Social Network heachache for artists. Many artists have another social network to deal with. Myspace, Facebook, Twitter and now Ping. With no proven track record, most artists will join the bandwagon if only it becomes relevant. As Google's Buzz has shown, you require more than just a great idea. You need adoption.
  2. No integration with other social networks. Where is the Facebook, Twitter or Myspace integration? Apple should start negotiating with those companies and roll out integration features.
  3. No website. Ping is software based and can not be accessed on the web.
  4. Software requirements. iTunes 10 is not universally compatible with all devices.
  5. Ping functions in a closed ecosystem that only Apple can leverage. Ping is not open to other applications to work. You live in Apple's world, not yours.
  6. Ping is invite-only. Unsigned artists and indie bands need to be invited to use the network.
  7. Ping only benefits major artists. By limiting competition, established artists win out.
  8. New artist discovery is slim. Artist pages are limited to a few artists and so is not a lot of opportunity to discover new artists.
  9. Ping and iTunes is not global. Apple iTunes only operates in 23 countries. Where is the rest of the world? What if your friends are not from those countries?
  10. Widespread adoption will be difficult to achieve. Even though iTunes boasts 160 million users, it seems widespread adoption will be hard task for Apple, since they have a propensity to exclude non-Apple users. Also how many of the 160 million users is currently active?
  11. Apple is playing social network catch up. Steve Jobs realizes that Apple needs to jump into the social networking bandwagon since digital experiences today are most effective with a layer of social interaction.
  12. Tying a social network to a marketplace has not yet shown any significant commercial success. Myspace, Facebook and Twitter are still figuring ways to monetize. Given their large audiences, their revenue per user is small when compared to an Amazon or Google Search user. Users on social networks are primarily engaged in socializing.
  13. No location or geographic based services. An important component of social activity is geography and interacting with social or music events. Apple has neither.
  14. No friend importing. A social network without one of the most core components of inviting your friends is not utilized.
  15. Uploading photos is annoying. There is no automatic filtering system for photos similar to what Facebook has. The most popular section on music websites is the photo section. How did Apple miss this one?
  16. Apple is too cocky and confident. Making outlandish comments such as "Everyone who loves music is on Ping" could backfire, since not only is a truly global audience not allowed to participate, many users that love music do not own Apple products or use iTunes. Equating participation on Ping to the love of music is a dangerous proposition, especially with Apple's reputation of keeping its network closed, controlled and proprietary.
  17. Social Networks are open not closed. The web is based on openness and transparency. Apple is not an "open" company. Their social network is geared to a select few.
  18. Too many bugs. Pages freeze.
  19. Apple has piggybacked the music industry. Apple has piggybacked on piracy to sell iPods and their hardware. Aren't 95% of songs on iPods illegally downloaded? Artists know that building a new social network will benefit Apple more.
  20. No offical music website link and no email list generator. Apple keeps all the fan contacts. There is no way artists can collect emails of their followers through Ping. As the Myspace example highlights, what happens when your fans leave a social network you do not control? You lose all your followers and all the work you put in. You can not connect your official artist website to Ping. It is truly a closed ecosystem. Why would artist want to promote something so self-centred and self-serving to Apple?

Apple will determine its own destiny in regards to Ping. It is too early to say whether Ping will be a success or not. It has been a shaky start and Apple has its hands full. Only time will tell.


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Comments (10)

Alfred James
Said this on 9-3-2010 At 07:06 pm

Excellent article! This is why I never buy Apple. I just do not want to be held captive in their 4-wall world

David Morello
Said this on 9-3-2010 At 07:09 pm

Apple is all about making the big money. They could care less about indie or unsigned artists. Invitation-only? Are you kidding me?! I will stick to open systems. Call me when Apple becomes "social" and does not discriminate.

Malik El Jaisik
Said this on 9-3-2010 At 07:13 pm

iTunes and Ping is irrelevant to me. Why? Because I do not live in those 23 countries that Apple caters to. Shame. Then they wonder why piracy is rampant. Some want to pay but can't. So much for impulse buys.

Sam Cooke
Said this on 9-3-2010 At 07:16 pm

I heard Ping is a ghost town. I really do like that the social network's users is a demographic that pays for music. Problem is 99c downloads won't save the music industry and help us make a living.

Patrick Lerner
Said this on 9-3-2010 At 07:19 pm

Awesome article! I like that you pose the pros and cons of Ping.

Seems Ping still needs a lot of work. The upside could be huge if Apple opens up and is more flexible. Unsigned bands always get screwed by Apple. We need aggregators to get on iTunes. Middle-men galore!!

Ben Holland
Said this on 9-3-2010 At 07:21 pm

Seems Apple is copying the Facebook look and feel. I wonder if Facebook is going to sue them. I heard they're negotiating to get Facebook Connect on board.

Thumbs up on the post. Very thorough read.

Steve Jameson
Said this on 9-4-2010 At 12:22 pm

The news is that there is a lot of spammy accounts popping up. What is up with that? Apple better clean up their system. Welcome to the world of social networking and fake accounts Steve Jobs! :)

Music Futurist
Said this on 9-5-2010 At 03:46 pm

I think Apple and Steve Jobs are just playing catch-up. Closed social networks never work if the goal is mass appeal. Look at social networks such as ASmallWorld. Those are elitist-type of networks geared for niche audiences. Music is universal. You can not hold it captive in a closed system and expect everyone to jump the bandwagon. I love what Apple has done with their products and hardware but I am not so sure about their social media strategy. It does not seem to be their core strength.

Andy
Said this on 9-26-2010 At 01:25 am

Apple do not understand social media. It's about openness, connectivity, transparency, something Apple is fighting tooth and claw. Ping isn't a social media like facebook or twitter - it's the Amazon store recommendations, done by someone who doesn't understand user behaviour.

James Roberts
Said this on 3-7-2011 At 07:51 am

I really do agree with most of these comments! It's too late for apple/itunes to join the social networks. Facebook is far beyond everyone else in the social networks. Ping has already FAILED due to it's bad reputation for not helping the artists in need (pre-artists will remember!). Myspace is a joke because it's users don't even have a good reason to login anymore (lack of professional look). There are just a handful of music social networks out there. Every single one I've seen is lacking to entertain everyone, without fully copying FB. I know this is no easy feat as facebook gets bigger in the meanwhile. This is all just a time game! The first one to create a fun music social site with rich features will surely dominate the market with music social networking. I hope to see something soon but it's not going to be MOG which is a copycat of Europe's Spotify.com or the failed $10 subscription to USA's Rhapsody. People want to pay per song and not want to be obligated to a monthly fee. I'm sticking with Amazon for music and fb for social networking until something entertaining comes out!

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