Company / division: Apple Music
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
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.
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.
Music streaming hailed as industry’s saviour as labels enjoy profit surge | Technology | The Guardian (Dec 29, 2016)
The headline is right on here – streaming has been a boon for the music industry, arguably the second time the tech industry (and Apple in particular) has come to its rescue. But it doesn’t go far enough – it’s paid streaming that’s saving the industry, while the best that can be said for ad-supported streaming is that it provides a useful funnel for the services that really drive revenue. That tension between paid and free streaming and their respective economics is a key one to watch in the music industry over the next couple of years.
Apple Music: Platform? Promoter? Both. – The New York Times (Dec 22, 2016)
Competition in the streaming music market is tough – everyone is offering roughly the same catalogs for roughly the same monthly price. So competition happens at the margins – in recommendations, user interfaces, and exclusive content, which is the subject of this interview with Apple Music execs.