Customer Experience

Customer Experience

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

iTunes Match and the Consumer Cloud

In June 2011, Steve Jobs presented what was to be his last ever keynote speech at the Apple Worldwide Developers' Conference in California. Like previous keynotes (or 'Stevenotes' as they are often called), Jobs spent just over 30 minutes unveiling Apple's latest products and innovations. As was traditional for a 'Stevenote' he also ended his presentation with "one more thing": iTunes Match.

Although this keynote will be remembered primarily as Jobs' last - there were no game-changing product announcements to rival the Macintosh, iPod, iPhone or iPad - history may yet see iTunes Match revolutionary in it's own right. This is because it has the potential to become the first recognisable, paid-for, and mainstream cloud.

Caroline Cook, a Senior Consultant in Capgemini Australia's Marketing, Sales and Service practice, looks at why it's taken so long for the cloud to enter the consciousness of the consumer, and why iTunes Match may change what's to come.

 

In real terms, consumer cloud computing is nothing new. Flickr, which had over 50 million members at the time of Steve Jobs' last keynote, is 8 years old. Hotmail, one of the first web-based email services, has been around for over 15 years and, as of October 2011, has a staggering 350 million users globally . Facebook - no numbers needed thanks to its infamy - is also a cloud given its photo and media hosting capabilities, as are the ever-popular game 'apps' which piggy-back on its platform such as 'Farmville' (which alone logged 30 million visits a day in early 2010 ). And, finally, let's not forget the myriad of  web-connected Smartphone apps which store and retrieve data from the cloud.

These usage statistics, however, are deceptive. While mega-brands such as Facebook and Google are bringing cloud computing to the masses, the cloud itself is suffering from an identity crisis:

  • Consumers don't understand the cloud Despite being widely used, cloud computing is poorly understood by consumers. A US Study published in 2011 found that just 22% of consumers were familiar with the term 'cloud computing' and it's meaning. Another 2011 study found that only 40% understand cloud based applications such as Google Docs.
  • Consumers don't realise they're using the cloud Although many of the world's most popular web-services, mobile devices and applications are cloud-based, consumers don't always know this. They are inadvertently using the cloud. Ask a Facebook or Flickr user what it is they're using and the likely responses will be "a social network" and "a web site" - in one of the surveys above, over 50% of all respondents had used a cloud-based service, yet didn't know what cloud computing was.
Cloud computing's branding headache may eventually lead to viability problems. In the world of commercial cloud-based services and software, lucrative pay-as-you-go and subscription-based business models reign supreme. Consumer clouds by contrast are usually free; propped up by advertising revenue which is only profitable at scale. Although paid-for mobile apps are a notable exception to the rule, here the cloud-based functionality is often a bolt-on feature (e.g. enabling access to high-scores on any device) and consumers are really paying for the application itself, not the cloud. Some web-services (such as Flickr) have introduced premium paid-for versions of their services to plug the gap, yet are targetted towards pro or expert, rather than average, users.

Unless consumer cloud computing can overcome its perception and identify issues - and users develop a willingness to pay - it's unclear whether a small to mid-sized user group can ever support a profitable business model. iTunes Match may change things.

iTunes Match stores a user's entire music library in the cloud, irrespective of whether the music was purchased through iTunes, and enables access to this music library through any web-connected Apple device. It isn't free (at US $24.99 a year) but one subscription will cover any computer or device linked to the same iTunes library. Announced as part Apple's main cloud offering 'iCloud', there are three reasons why iTunes Match may finally lead consumers to knowingly embrace the cloud:

  1. It delivers a rich user experience In literal terms, iTunes Match backs-up data and provides a web-service. In experience terms, it allows a user to access any piece of music that they own on any iTunes-enabled device, and built in streaming means that this happens in real-time. If you have more than one device, or lots of music, you'll start to wonder how you lived without it. It looks, feels and sounds great.
  2. It's clearly 'cloud' With iCloud, Apple is (intentionally or otherwise) tackling the cloud's identity problems head-on. iTunes Match uses it's parent service's branding and even displays cloud icons next to your music when it is available for streaming. It is unmistakably 'cloud' and it's also very simple to use.
  3. It's Apple iTunes Match isn't really that original -  Spotify, Pandora and Netflix provide services that stream media across devices on demand - yet it's almost destined for success because of it is Apple and because it has 'ready-made' market thanks to the prolific use of Apple hardware (37 million iPhones were sold in Q1 2012 alone). Combined with the iPod, the original iTunes almost single-handedly introduced paid-for music downloads to the mainstream and made them profitable. If anyone can do the same for the cloud, it's Apple.
For the cloud, iTunes Match isn't important because it's inherently brilliant, it's important because it might help consumers finally 'get it'.

 

 

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Caroline Cook
Caroline Cook

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