Ping: Apple’s Newest Cash Cow

Ping: Apple's Newest Cash Cow

by Stephen Bolen on Sep 03, 2010 Follow @sbolen

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Apple recently unveiled Ping, the computer giant’s first official foray into the world of social music networking.

Unlike other social networks, Ping plays within the iTunes ecosystem, allowing users to “follow” artists for updates, exclusive content, tour dates, etc. And “follow” friends to see their iTunes activity.

That last part, the following friends, keep an eye on that. It could be big.

Ping is a game-changer

Contrary to what Ian Paul at PC World thinks, Ping will be a quite succesful cash cow for reasons I’ll list below. Paul attributes his prediction of failure on the fact that Ping is a closed ecosystem/walled garden with no external (read: web-based) alternative. While that argument certainly has merit for social networks like Facebook, Twitter and MySpace, I highly doubt that Apple entered the world of social music networking with the intent to take visitors outside of iTunes, where all of the items for purchase (and your Credit Card, natch) are on file.

Other writers chime in with their own assertions that “Ping is not a Facebook or MySpace killer.” To that, I say “duh.” It’s obviously not Apple’s intent to make Ping more than a lifestream of updates from artists you follow and purchases and downloads from friends. If Apple scales the service larger by opening up the Ping API for developers to integrate with Twitter, Facebook, LinkedIn, et cetera, great.

If not, I’m sure they’ll be happy to hear their cash cow mooing.

Ping is a cash cow

Sunil Gupta, the Edward W. Carter Professor of Business Administration at Harvard Business School, wrote on the powers of social influencers within social networks in a paper, “Do Friends Influence Purchases in a Social Network?” (May 2009). The study found that there is a significant and positive impact of friends’ purchases on the purchase probability of a user, and that “moderately connected” users exhibit a “keeping up with the Joneses” behavior.

Gupta found that, on average, social influence translates into a five percent increase in overall revenues.

Five percent!

Given that Apple is the largest music retailer in the world, if even a fraction of the 160 million registered iTunes account holders participate, the opportunity for exponential revenue growth could be staggering.

Ping beat Facebook, MySpace and Google to the punch

Kara Swisher, of All Things Digital, interviewed Apple CEO Steve Jobs shortly after the Music Keynote Event. She asked why Facebook was not a part of Ping’s initial rollout, and received a surprising response: Facebook wanted “onerous terms that we could not agree to.”

Onerous terms? Sounds like Facebook is a bit upset they couldn’t roll out a music service quicker.

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It would be nice to at least see Twitter integrated to help spread awareness of some of the cooler opportunities Ping will begin to afford users.

Post Author

Stephen Bolen

Stephen Bolen (@sbolen) is a St. Louis-based social media professional specializing in B2B marketing and web content management. He also owns and operates Gamma Ray Media, specializing in small business internet marketing.... View Full Profile →

http://blog.nuancelabs.com Andy Ciordia aka Ciordia9

Not so sure yet. There is no integration, no way to talk, no real way to share without doing business. It will apply currently to the core iTunes users who are very embedded in that structure. It will take a number of months or years before it catches the right momentum unless they open it up rapidly. In time like many things Apple it'll find it's hooks. Right now though it's a content desert and that alone will make the bounce rate seriously high.
http://sbolen.me/ Stephen Bolen

Thanks for the comments, Andy.

I'm not 100% sure that Apple is targeting “new” users, but rather hoping to lean on the existing iTunes base to apply social pressures to friends.

Of course, adding a component to locate friends with iTunes accounts via social networks (Facebook and their extremely large user base would be a great start, as would Twitter, Last.fm, Pandora, etc) would only serve to accelerate Ping's growth.

I don't necessarily think it's a content desert – I think a better analogy would be a mountain full of gold, waiting to be mined – but your point is still valid. Unless there's a way to seriously engage users, there's a high probability that it won't gain the traction it needs to take that next step.
http://blog.nuancelabs.com Andy Ciordia aka Ciordia9

True enough.

My first disappointment was 'How do I pull my other friends over easily?' and there was no answer. So if I can't relate to friends that are on everywhere else it was just artists and me–and then there was no interaction between anything. Well heck, my TuneUp application tells me when and where concerts are.

Back to work I went. Now curiously if I never visited that option again, what will drag us back later. They'll have to deepen and broaden the service at some point and make what we have much more interactive. Somewhere I'm also disappointed that they didn't piggy back (or buy) with Blip or Last.FM or some other provider out there that already had a user relationship database.

I'm always fascinated with the evolution of applications and social interactions so I'm sure it will be entertaining to watch how this new offering grows.
http://sbolen.me/ Stephen Bolen

When I first downloaded iTunes 10 (pretty much the moment the link became available – Hello, my name is Stephen and I'm an Apple addict), I had the option to use Facebook Connect to find friends.

If they bring Facebook integration back (get over the “onerous” terms), I think there's a good chance that Ping will skyrocket in usage, and, eventually, sales.

If not, you're spot on – there's a calculated risk on Apple's part that they can create something compelling enough to bring back users to attempt to find other friends on iTunes. But at the very least, they need to tap into Twitter and/or Last.fm's APIs.
http://jimmy-gilmore.com Jimmy Gilmore

Nice perspective on Ping. I have friends who seek out new music and have been influenced by their purchases for decades. Unfortunately, they're not on Ping yet. However they are on Facebook.
Melissa_Analytics

Did you see the blogpost on http://www.blog.rowfeeder.com about Ping? Thought you'd find it interesting given this blog post — really like it. thanks!
http://somebodyhealme.dianalee.net/ Diana Lee

I'm not thrilled with it in the initial rollout. Why is it so hard to find your friends? Why isn't there any way to really interact with other people? IMO it's not really social media without a way to find and talk with people you share interests with. However, you're probably right that it will make them money.
http://sbolen.me/ Stephen Bolen

I think this was one of those “it was supposed to be so easy” things — initially, Ping had Facebook connect to find friends to pre-populate the service, but Facebook pulled the plug in the 13th hour (it was available initially, but pulled a few hours after launch).

I believe it is social media, in that you're interacting with your network (following friends, artists; leaving comments, being influenced and influencing others). However, making the jump to find & populate your network will be the next big challenge for Ping.

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