Company / division: Apple Music
Apple Music Signs New Deal with Warner for Lower Royalty Rates (Sep 7, 2017)
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★ Apple Reportedly Spending $1 Billion on Original Video Content in Next Year (Aug 16, 2017)
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Midia Suggests Amazon Now 3rd Largest Music Streaming Service (Jul 20, 2017)
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Apple Reportedly Pushing to Lower Revenue Share to Music Labels (Jun 22, 2017)
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Bozoma Saint John Leaves Apple Music to Become Uber’s Chief Brand Officer (Jun 6, 2017)
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★ Apple Announces HomePod Home Audio System with Siri (Jun 5, 2017)
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Weekly Narrative Video – Streaming is Saving Music (May 19, 2017)
This week’s Narrative Video is on the Streaming is Saving Music narrative. This narrative was in the news several times this week, with Spotify’s 2016 financials leaking, news that SiriusXM is debating a bid for Pandora, and Rhapsody’s announcement that it’s making layoffs and replacing its CEO. The reality is that streaming music is doing wonders for the music labels, but the streaming services themselves continue to struggle. And it’s worth noting that it’s paid subscription streaming specifically that’s really giving the industry a boost. The video talks through these topics and other trends in the industry, reality-checking the prevailing narrative. Subscribers can see the video on the Streaming is Saving Music page. If you’re not yet a subscriber, you can sign up for a 30-day free trial here, and you’ll get access to this video, past videos, all the latest commentary on the site, and lots more besides.
Apple Partners with Musical.ly, Supplying Songs and Promoting Apple Music (Apr 28, 2017)
Musical.ly is one of the few big app hits in recent years that didn’t come from one of the big established players and isn’t a game, while also being that rare example of a Chinese tech company that’s done well in the West. It’s popular with teenagers, who use the app to create short music videos using original songs, and Apple will now be the supplier of those songs, replacing a small UK-based provider. It will also therefore be able to promote Apple Music within the service, and will integrate with Apple Music for paying subscribers. Recode notes that the app has declined in popularity recently as measured by App Store rankings, but the reality is that its ranking has been extremely volatile, rising as high as 11th and as low as 92nd over the past six months. That volatility is driven almost entirely by the day of the week, with the app peaking over the weekend and dropping during the week – had Recode written its piece last Saturday, for example, the app would have been ranked #41. Given Musical.ly’s popularity within its target segment, Apple is smart to strike a partnership that allows it both to drive additional revenue and market to the app’s users. I’m almost surprised Apple didn’t just acquire the company and app outright, given Apple’s recent investment in creative and content apps with News, Music, and Clips.
via Recode
Apple Planning Up To Ten Pieces of Original Video Content This Year (Apr 27, 2017)
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Apple Delays Carpool Karaoke Launch (Apr 25, 2017)
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★ Analysis Suggests Apple’s Chinese Market Share Decline is Due to Poor Services (Apr 22, 2017)
Backchannel has a piece out this week which argues that the iPhone’s declining market share in China is due to the poor competitiveness of its services, notably Apple Music and Apple Pay. The piece is well worth reading, but it offers few real answers. It states that Apple fails to compete effectively with its music and payment services in China, but then also says that the music and payments markets in China have been sewn up by strong local competitors, with music rights in particular subject to exclusives from Chinese services. As such, it’s really not clear what Apple could have done differently in these categories. At the end of the day, Apple’s lack of competitiveness in services in China is a symptom of a much broader issue, which is that Apple doesn’t bend much to local custom when it comes to pricing or service structure (see also India). It does localize content stores, and indeed is one of the strongest players in that respect globally, but China is such a massive market, has so many homegrown competitors, and is run by a government which is not afraid to disadvantage foreign interlopers, that it’s hard to see how Apple could compete effectively there on services. As such, I think it’s smart to compete more on its devices, its growing retail presence, and its non-content software and services. But that does mean that the ecosystem Apple has built elsewhere is missing some of the appeal it has elsewhere.
But all that is to ignore the central premise of the argument being made here, that it’s this services weakness that’s at the root of the recent decline in iPhone market share in China. I think that’s debatable at best, and it’s worth remembering that that decline isn’t about ownership but sales, and Apple went through a massive cycle earlier off the back of the iPhone 6 in China, and then came down to earth over the ensuing year, so that change in market share is reflective of cyclical rather than permanent trends, with some signs of recovery recently with the iPhone 7. So overall this piece feels like it makes some interesting points, some of them legitimate with regard to Apple’s services competitiveness in China, but overdoes the narrative about its impact.
via Backchannel
Apple Uses Music Muscle to Promote Young Artists for a Month at a Time (Apr 21, 2017)
Apple is starting a new program through which it will spend a month at a time promoting young relatively unknown artists through its various Apple Music assets, including the streaming service, Beats 1 Radio, and in other venues. When Apple first launched Apple Music, the Connect feature felt like it could be a great way for artists of all sizes to connect organically with their fans through the platform, but it really hasn’t taken off in that way. Meanwhile, SoundCloud and YouTube continue to do better in helping young artists get their start before they get signed to labels. This effort is aimed at a somewhat later stage in the game, but builds on Beats 1 DJ Zane Lowe’s reputation for giving artists their big break, but if it’s a monthlong effort it’s hard to see how it will be scalable. However, it’s all part of Apple’s pitch that its service is the best for artists, whether that’s through exclusives, discovery and promotion, or simply getting paid for their work (since it’s one of the few services that doesn’t have a free tier).
via Bloomberg
Apple Acquires First Movie at Tribeca Film Festival (Apr 20, 2017)
This didn’t get a ton of attention, but it’s symbolically important. Apple has so far mostly commissioned content rather than acquiring existing content, while existing online streaming companies Netflix and Amazon have been bidding up prices for movies at festivals for several years now. But Apple has now acquired its first festival film, a documentary about the live of Clive Davis, a music executive. As such, even though the format and origin of the content is different, the subject matter of music is very much the same as Apple’s other original content, suggesting that it still sees Apple Music as the home for this stuff. But Apple is also testing out different models for original content, which will stand it in good stead if (when) it eventually decides to launch its own video streaming service.
via Variety
Jay-Z quietly removes catalog from Apple Music and Spotify as Tidal continues fight for exclusives – 9to5Mac (Apr 7, 2017)
Jay-Z, one of the owners of the Tidal music service, has apparently pulled all his solo music from both Apple Music and Spotify, though without any kind of official explanation or much fanfare. In theory, it’s likely that he’s trying to reinforce one of the original value propositions of Tidal, which was that its artist-owners would provide exclusives for their music, though in practice most of the owners have continued to license their music to other streaming services, which have far bigger subscriber bases. Tidal has struggled financially, and recently got something of a lifeline from Sprint, but it may have decided that it needs more exclusives to drive interest and subscriber numbers. I’m not convinced it’s going to do all that well on that basis given that the vast majority of the global music catalogue is still available on other services, but this is yet another sign that exclusives – whether temporary or long-term – are one of the few sources of differentiation to streaming music services, whether or not that’s good for their subscribers.
via 9to5Mac
Chance the Rapper Says His Apple Music Deal Was Worth $500,000 – The New York Times (Mar 17, 2017)
From a musical perspective, this is a little down in the weeds, but it’s relevant to how Apple and other streaming services are using exclusives to promote and differentiate their services, so it’s worth understanding at least some of those details. Chance the Rapper is a popular musician who famously has eschewed both a deal with a label and, for the most part, charging for his music, making much of it available through free streaming services like SoundCloud. However, he did have a brief exclusive with Apple Music a while back, which has led to some criticisms that he’s not truly an independent artist (neither the musician nor the articles covering this story today seem to be specific about that, but here’s a recent example). In his defense, Chance detailed his relationship with Apple today in a series of tweets in which he said that Apple had indeed paid him half a million dollars, which he says he needed at the time, for a two week exclusive on Apple Music before he released his album on SoundCloud. That’s a much smaller amount than Apple was reported to have paid fellow musician Drake, but highlights that Apple has been spending a decent amount on exclusives, though it’s possible that we’ll see less of this and more emphasis on its original content going forward. Meanwhile, it appears Drake’s next project (technically a mixtape and not an album) will be the first in quite a while not to be an Apple Music exclusive.
via New York Times
Apple looking to buy TV shows and studios – Business Insider (Mar 3, 2017)
There’s not much in this report to suggest that Apple is actually interested in buying a studio, and indeed Imagine strongly refuted reports to that effect recently after those reports surfaced. Reports that Apple wants to acquire TV shows, on the other hand, are a lot more plausible – it’s already bought or commissioned a couple for Apple Music, and I could see it doing more of this, especially if it’s finally getting serious about building its own subscription TV service. The comments in here about the confusion over who’s leading the negotiations are a bit more worrying – if they’re true. Eddy Cue obviously does oversee the overall effort here as head of Apple’s content business, but he might well delegate some of the actual negotiations to other team members, and Jimmy Iovine in particular is known to have good relationships in the content industry. Recent reports about the change of leadership over Apple TV hardware suggested that Pete Distad was going to be taking the lead on these negotiations, and his name isn’t even mentioned, so there do seem to be a lot of people involved here. Hopefully Apple is clearer on this than some of those it’s approached seem to be.
via Business Insider
Spotify expands its push into original content with new podcasts – TechCrunch (Feb 23, 2017)
It’s becoming increasingly clear that original content is going to be an important part of differentiation in the streaming music space going forward, between Spotify’s earlier video content and now several new podcasts, and Apple’s focus on Beats 1 radio and its TV shows. The difference is, of course, that Spotify has a free tier, where this original content will also be available, while Apple will restrict its TV shows to paying subscribers. For Apple, the cost isn’t that big a deal – it has a much bigger company to fund such investment – but for Spotify such additional costs will push it yet further away from profitability without any big direct revenue benefit.
via TechCrunch
Apple Debuts Planet of the Apps Trailer – Recode (Feb 14, 2017)
Apple debuted the trailers for its Planet of the Apps and Carpool Karaoke shows at the Code Media conference last night. These are two of Apple’s first bits of original video content, both of which will debut as part of Apple Music. Carpool Karaoke still features James Corden on some episodes, but not all, which will detract at least somewhat from the original format, which is compelling in large part because of him. Planet of the Apps is a Shark Tank-style reality / competition show focused on apps. This clearly plays to Apple’s strengths, and gives potential competitors a big draw in the form of featured placement on the App Store. This isn’t my kind of thing – I’ve never been a big fan of reality shows – but Shark Tank is very popular, and Apple’s show mirrors its format pretty closely, so it should do well among the same people that like that show. In addition to music exclusives, these bits of video content are another unique feature of Apple Music, which should help set it apart versus the competition. But to my mind, it’s more interesting to see this as an ongoing push by Apple into original content, which for now may live in Apple Music but certainly has the potential to become the foundation of an Apple subscription video service in future, which could be a much bigger deal.
via Recode (Planet of the Apps trailer here)
Amazon, Apple, Google and Other Tech Companies on the Billboard Power 100 (Feb 9, 2017)
Billboard does an annual Power 100 ranking of the most important/influential execs in the music industry. Coming at this from a tech angle, there are several notable companies on the list: Spotify’s Daniel Ek takes the top spot, several Apple folks are at #4, Amazon at #12, iHeartMedia at #19, YouTube at #30, Pandora at #34, Facebook is at #54, and various others are scattered through the second 50. Amazon’s ranking is surprisingly high, but is entirely due to Billboard’s perception of Echo and Alexa’s role in transforming music, as illustrated by Billboard’s interview with Jeff Bezos and Amazon Music head Steve Boom. I think the take here is a little overblown, but there’s no doubt Echo and Alexa are changing the experience of music for the small minority of people who use them. YouTube’s relatively low ranking is surprising given how important a channel the site is for the music industry, but of course its relationship with the labels and artists is complicated. This kind of ranking exercise is always somewhat arbitrary, but it’s interesting to get a music industry take on the tech companies and their relative importance here.
via Billboard Bezos Interview (see also Power 100 rankings)
Apple Sets Its Sights on Hollywood With Plans for Original Content – WSJ (Jan 12, 2017)
Apple has been investing in video content for a while now, with the unusual strategy of pushing most of it to subscribers through a music service, rather than a dedicated video service. On the one hand, it’s a way to set Apple Music apart, and to the extent that there’s been something of a music theme to some of this video content, that makes sense too. But I still think this investment is really laying the groundwork for an eventual subscription video service from Apple, using the Music investments as cover. At this point, Apple has to get into the video subscription business if it’s to protect its ecosystem around content, much as it belatedly got into streaming music. The exact shape of that service – whether Hulu-, Netflix-, or DirecTV Now-like, is still unclear. I suspect it’ll launch by the end of this year, however, and this kind of original, exclusive content is increasingly essential for differentiation regardless of which of these models it pursues.
via Apple Sets Its Sights on Hollywood With Plans for Original Content – WSJ