Apple Is On a Streaming Suicide Mission…

applesuicidemission

Spotify is slashing the price on its subscription plans, eliminating restrictions on free, and spending hundreds of millions to convert paying iTunes users.

Google is now offering a three-month, $3 package to draw new subscribers to ‘Play Music All Access’.

YouTube, the largest source of music in the world, remains 100% free.

Pandora, with 81 million unique listeners, is free.


Apple, after spending more than $3 billion on Beats, is planning to launch an $8 monthly price plan for Beats Music, with no free tier.  “Apple executives have been telling the music industry it can help them roll back the tide of free digital music by relaunching its own subscription streaming service this year,” Re/Code reported early this morning.

Unlike Spotify and YouTube, Apple’s service won’t offer a free ‘tier’ of music interspersed with ads — after an initial trial period, you’ll need to pay to play.”

“Apple executives, led by media head Eddy Cue and Beats Music founder Jimmy Iovine, have been arguing that the music business ‘needs to get behind a paywall‘.  Apple’s anti-free pitch syncs up with public and private comments from top executives at the big music labels in recent months.”

55 Responses

  1. GGG

    Might not be, but we’ll see. For one, they already have everyone’s CCs. All they need to do is sneak in some ‘check here if you want to join Apple Streaming Service.’ Secondly, if the TS stuff is happening, then they will have a very popular catalog pretty exclusively. And I’m sure it won’t end there with exclusives.

    Reply
    • Anonymous

      Yeah, there has to be another shoe waiting to drop, like the Big Machine play… their rumored plan doesn’t have any way to compete as it stands.

      Reply
    • or maybe the service is that good?

      maybe it’s just that good? people pay for hulu and netflix, people pay to rent movie streams… at some point real world economics need to return to the business and folks need to leave the stockholm syndrome behind “or else they’ll steal it”… they’ve been stealing it for 15 years, so what?

      Reply
      • GGG

        I don’t see how this is arguing my point…? I was basically saying there will probably be legit value to it. Exclusive catalogs will make the service good, yes. Since it’s Apple, I’m assuming the layout/usability will be good, so that’s sort of a moot point because that will be good, too. But the usability of plenty of streaming services is good, doesn’t mean they get people.

        Reply
    • Adam

      This idea that having millions of CC numbers means success is myth. Lots of business have numbers and the banks themselves then should be the huge when it come to launching new services.

      Reply
      • GGG

        I didn’t say it guaranteed success, but take 100K people who already pay for your service, and have to do one thing to pay for another portion of it. Then take 100K people who have to input all their payment data for another service. The former is going to do better just because of trust, laziness and ease. Certainly does’t mean millions and millions WILL think that way, but they might. I imagine iTunes sales would be a lot less if you had to re-input your CC number each sale.

        Reply
    • Billy Bensan

      Ugh who cares people! Live your life and stiop worrying all about other companies and stuff like that. You all just sound like mad gossipers!

      Reply
  2. Anonymous

    “Apple, after spending more than $3 billion on Beats, is planning to launch an $8 monthly price plan for Beats Music, with no free tier”

    Yes, that is — unfortunately — a suicide mission.

    I love Apple, but songs behind a paywall can’t go viral, which is essential, and nobody wants songs without videos today.

    So, back to square one:

    We need a free, ad-financed, artist-friendly, better-paying YouTube alternative — owned and operated by the industry — and we need to use that service exclusively. All revenues straight back to the artists.

    Reply
    • Anonymous

      Viral is a myth and really its only tweens and soccer moms who care about videos, about the only demographics who have the time to sit around and actually allocate the time to watching videos… of course businesses like videos for product placement etc. so I understand the desire to perpetuate the importance of them, even if fabricated…

      I’m fine with pay to play and music behind a minimal paywall…

      Reply
          • GGG

            How in the world is viral a myth? That doesn’t even make sense. It’s like saying nobody actually watches the Super Bowl, ratings are a myth.

          • Anonymous

            Its an overused term bantered around mostly by the free tech crowd in an effort to perpetuate the longtail dream and convince people there’s benefit and reason to do it for free and keep doing it in hopes it catches and goes, ugh, viral…

            Sure someone at a Div 1 school in a popular fraternity shares something with a group of popular people, combined with some other techniques to boost plays/views, and voila, an organic viral video or song…

            So you’re right, I was referring to the public definition and marketing of viral as opposed to how it actually works, which to me isn’t viral, its like anything else, but it is what it is…

          • GGG

            It still doesn’t make any sense. There’s a reason Gangnam Style got 2 billion views, or a bunch of random cat or baby videos have 500M. Whether we see that as a good reason or bad, it doesn’t matter. If it was easily obtainable I’d be rich right now.

          • Anonymous

            It still doesn’t make any sense. There’s a reason Gangnam Style got 2 billion views, or a bunch of random cat or baby videos have 500M. Whether we see that as a good reason or bad, it doesn’t matter. If it was easily obtainable I’d be rich right now.

            But do you even know the full scale of the campaign that Psy and his label embarked upon to get that video to that point? Gangnam style was hardly viral even if it appeared that way, but with the silly video and dance, the gargantuan populace where he is from, it reached a tipping point and did go a bit crazy, but they worked it and put time and money into it just to get it to that point. If gangnam style is viral, then every single music video every made and every song ever gracing the charts that reached a few millions fews or the top ten spots would be considered viral, so it could be we havent even defined the parameters of the word then yet?

            Cat and baby videos are not music videos. Cat and baby videos actually can kind of go viral and are videos that typiufy what the word truly means, cheaply shot and one person posted up and then shared around with zero budget or marketing campaign, to me that is viral, but music doesnt really work like that. Every so often, and i mean like less then 1% of music videos occasionally has a dumb and stupid enough video that might actually catch enough views in a short enough period of time that it gets front page status that it then reaches a tipping point and becomes viral where it was cheaply shot and just uploaded by the user, but its not the norm and its not often, and its always a very compromised video.

            I would say you would have to take the antithesis approach and so something that will be so slagged off and hated and basically so awful, that people want to share it just to make themselves feel better by taking it out on someone else. Videos that come to mind are friday and the plastics, videos that got mainstream media attention for the views they got but which were so bad musically and artistically and just so unprofessional, that most cringe to watch it. If thats what you want to do with your music and your career then by all means fly at it, but they are pretty much done in any serious way.

            So it then becomes are you making the best song and video you can? Respecting the artforms and the crafts and worrying about the longevity of your body of work? Or are you chasing fractions of a penny and a buzz catch term in the slight hope that maybe it gets lucky?

          • GGG

            You still can’t just write off anything that has marketing, though. Marketing/promo exists because going “viral,” even before the word was coined, was the goal. To whatever extent was technologically possible over time.

            If you are arguing the difference between some person in bumblefuck America uploading a video of their dog and people just finding it, as opposed to a promoted video, of course there’s a difference, fine. But the promoted video can still legitimately go viral, it just had a big push into it. If paying enough money in promo to get a billion views was worthwhile, far more people would do it and far more videos would have a billion views. Hell, even the top 40 artists with videos on YT’s frontpage are barely breaking 200M, with exceptions of course.

          • Anonymous

            You still can’t just write off anything that has marketing, though. Marketing/promo exists because going “viral,” even before the word was coined, was the goal. To whatever extent was technologically possible over time.

            If you are arguing the difference between some person in bumblefuck America uploading a video of their dog and people just finding it, as opposed to a promoted video, of course there’s a difference, fine. But the promoted video can still legitimately go viral, it just had a big push into it. If paying enough money in promo to get a billion views was worthwhile, far more people would do it and far more videos would have a billion views. Hell, even the top 40 artists with videos on YT’s frontpage are barely breaking 200M, with exceptions of course.

            I kind of think we should, and that means you have to take it even further to the ones that are manipulated through a gorilla marketing process as opposed to just a true viral sharing experience, where someone shares a link with someone else via email or social media, because they thought it was funny or cool, and not because it’s in their job description or because their client paid them to. To me that just isnt going viral, to me that is just marketing and promotion and advertising 101, colluding words to once again be used to corporate americas benefit while screwing everyone else, where with enough marketing it reaches a tipping point where people ultimately share it around thanks to sponsored ads or with fake facebook accounts friending whoever and constant pages and paid articles and backlinks everywhere and essentially a team working something to force people to finally share it, well, i just dont consider that viral, especially when those scenarios are then used as a means to sell people on a certain business model or on selling them on a result or future success that is mostly unattainable to people without the backend story and behind the smoke steps and expenditures.

            That means McDonalds can have a viral video by dumping millions of dollars into a massive well orchestrated marketing plan, that’s ridiculous, it goes against the whole point and meaning of the buzzy trendy viral thing and once again puts the whole landscape into the laps of corporate america, to feed us like cattle as they line us up for the slaughter, which is fine, im just sayin.

            What im saying and referring to, is the often marketed and coined term viral, used and bantered around as part of a business model to encourage people to try and go viral, cluttering and infesting an already way over-saturated market because they were sold a deluded dream and bought it, and the cycle continues, over and over again. These people ultimately look at it like, how can we get a video to go viral so we can get this that and the other thing? They then storyboard or brainstorm only ideas that are silly or stupid or crazy enough that might cut through the massive noise long enough to get people to share it with someone else, which is just backwards. So instead of making the best art and the best video and the best commerce, whatever your angle or desire is, i prefer combining the two, but anyways, they focus on all the wrong things just in an attempt to go viral. More and more people in the wrong fields doing the wrong things chasing fame and fortune where it just doesnt really exist. They are all hoping to get lucky and catch a viral video in hopes they get a few hundred million views so they can then leverage that and get to the show with some deal to become some arms length face of the label and be all famous and everything, thats ridiculous. Of course so long as the labels and the show and the media continue to play that game the more it will eat itself and the more the quality will suffer and the more they will be forced down that path, away from substance, away from quality, away from putting together substantial artists with substantial bodies of work. it just becomes a chasing pennies and instant fame game by making a bunch of short term garbage created only to catch peoples attention and mess with their brains and manipulate them based on the current trends in stats and data. Chasing their tails…

            Its become this vague catch buzz term used by people in an effort to either get others to contribute property/content or else in an effort to deglaze their super corporate marketing and advertising methods in an effort to make their brand or artist or content seem more cool and hip like, sort of a disambiguation of realities.

            Your cat in your bedroom just isnt corporate, music has gone corporate, clarifying the word would be the prudent thing to do and then educating them on the reality of the situation.

            And there you go again with the all encompassing artist term. Subway sandwhich artists are not artists, they just arent, its a multinational corporate using a catch buzz term from this faddy artisan hipster push to make them look cool to a certain group of people, when in effect they are restricted per item to how much they can put on it and essentially are robots working a manufacturing plant, anything but artists. No offense to any of them, its just the way it is, many of them may actually go home after work and be artists, but sandwhich artists they are not!!! A sandwhich artist would be someone with free reign to do anything, baking wild breads and using flare and imagination when putting sandwhiches together, they wouldnt be taking orders so much as they would be creating works of art and selling them. It screws anyone that is an artist and should probably be illegal if it already isnt.

    • Anonymous

      Whoever owns the masters calls the shots, so the money has to go to the master rights holders and then they payu out based on their contracts and royalty allocations, and then the publishing goes to those that own the publishing rights, whether or not its artists is besides the point.

      Reply
      • Remi Swierczek

        “We need a free, ad-financed, artist-friendly, better-paying YouTube alternative — owned and operated by the industry” Your statement is a PIPE DREAM.
        Global income limit for music from such arrangement is at $5B!
        Global limit of PREMIUM sub supported business model is at $25B (300Mx$6.99×12=$25.2B) WON’T HAPPEN!

        Considering that 1999 equals in today’s dollars $56B I propose to abandon all PIPE DREAMS in in the PIPE LINE and start conversion of all Radio and all streaming to primitive discovery based $100B music store!

        Reply
    • Versus

      I want songs without music videos. I couldn’t care less about the videos. I want good music.

      Reply
      • Antinet

        Thank God someone understands the difference between a novelty dance music video, and a great song. I agree completely

        Reply
    • McAuliffe

      “owned and operated by the industry — … All revenues straight back to the artists.”

      Am I the only one that sees the irony in that statement?

      Reply
  3. Irving Mindreader

    I have a better question or two, Paul…

    What if the majors cancel their deals with everyone else (Spotify, Pandora, etc), leaving Apple with the only comprehensive option available to consumers?

    And what if visual media is part of the plan?

    And what if the host has more money than God and all the economic incentive (iTunes) to make it work?

    Chicken Little’s sky doesn’t necessarily fall then, does it?

    Interesting times we live in.

    Reply
    • Paul Resnikoff
      Paul Resnikoff

      Before I respond to that, let me make sure I understand exactly what you’re asking:

      What if the majors cancel their deals with everyone else (Spotify, Pandora, etc), leaving Apple with the only comprehensive option available to consumers?

      So, that includes YouTube? In other words, forcing YouTube to only play videos on Music Key?

      Reply
      • Yep

        Pretty much every developed country in the world has legislation is place to prevent this type of thing.

        Apple is a big company but it doesn’t re-write the Magna Carter.

        Reply
    • Musician Who Understands

      Irving Mindreader

      “I have a better question or two, Paul…

      What if the majors cancel their deals with everyone else (Spotify, Pandora, etc), leaving Apple with the only comprehensive option available to consumers?

      And what if visual media is part of the plan?

      Paul Resnikoff

      “So, that includes YouTube? In other words, forcing YouTube to only play videos on Music Key?”

      Dumb question.

      They can’t (and even when they can, they won’t).

      Pandora doesn’t need permission. As a non-interactive service, Pandora gets a statutory license to all of the master recordings (and through the PRO’s – and likely soon, some direct deals with publishers) they have a blanket license for all of the songs. labels and music publishers literally can not stop them, as it stands right now.

      Spotify also has a similar, non-interactive component, but clearly, it is their interactive on-demand service that everyone is interested in. There, the labels COULD say no, but they won’t, because they own about 18% of Spotify – because of that, they don’t want to freeze Spotify out of the market.

      You can’t really stop YouTube, either, as the DMCA allows them a safe-harbor (and again, the labels and music publishers have done deals with YouTube to try and make the service a revenue source).

      Good luck to Apple and the majors on this service. Maybe $8.00 a month is cheap enough, but I don’t think so. Even with Apple’s built-in user-base. If I had to predict, I’d say this will likely be FAIL.

      And anyone who says “Viral is a myth and really its only tweens and soccer moms who care about videos..” doesn’t know a THING about the business.

      Going “viral” (not just on-line) is the only thing that makes super-stars. And poo-pooing the “tweens and soccer moms” demographic is like Home Depot saying they don’t really care about do-it-yourselfers.

      Tweens and soccer moms are the KEY demographic for the music business.

      Figure it out, people….

      Reply
      • Anonymous

        “poo-pooing the “tweens and soccer moms” demographic is like Home Depot saying they don’t really care about do-it-yourselfers”

        Yes sir, we love ’em! 🙂

        Reply
      • Paul Resnikoff
        Paul Resnikoff

        You can’t really stop YouTube, either, as the DMCA allows them a safe-harbor (and again, the labels and music publishers have done deals with YouTube to try and make the service a revenue source).

        Which also makes it extremely difficult for Apple to effectively build a paywall (at least one in which people pay).

        Reply
        • Anonymous

          How much longer until everyone figures out that Google/YT needs to be sued? Where’s their repeat infringer policy? Google is pocketing millions if not billions of revenue that should be going to labels and artists.

          Reply
          • Bandit

            But what if Apple convinced all major labels that YT is costing them more than it is helping. And what if Apple said that if they pulled from music key and all other YT services Apple would help the majors legal depts triple or quadruple the takedown notices at YT in anticipation of new lawsuit all the while steering Apple streamers toward purchase of majors product.

            That’s a lot of speculation I know but I also know that Apple just bumped AT&T off the Dow so Apple must know something about squeezing the competition

          • Bandit

            I also wanted to mention that Viacom lawsuit was 2010. I would be interested in comparing the amount of takedown notices in the years leading to that lawsuit and the amount of takedown notices that have issued since.

            Copyright law may be changing in the next couple years and I think Apple wants to contrast their method of making money off of copyrighted works against the method YT uses

          • David

            The way to tackle YouTube is to sue the unauthorised uploaders, who have no DMCA defense. YT can be subpoenaed to provide identifying details. Even if only a handful of uploaders are successfully identified, once it becomes known that uploading illegally to YT is not a risk-free activity, YT’s main source of content dries up. It wouldn’t be pretty, but it would be effective.

          • Versus

            Agreed. Are the labels afraid of the negative propaganda, I mean publicity, by the obviously unbiased Internet world that believe “information wants to be free” (except if you try pirating something like Google’s search engine algorithms)?

            Any other business uses the force of the law to protect its property from theft. Why not the music industry?

          • Esol Esek

            THe way to get Youtube is for every artist and label to summarily dump and sue it. There is no way to fix Google. They are compromised to the core, and their main business is now spying for the govt anyway. Putting them in control of content is pointless, because they have no respect for it on any level.

          • Anonymous

            “Putting them in control of content is pointless, because they have no respect for it on any level.”

            Completely true.

            But artists are not going to leave until they have somewhere else to go.

            So, again:

            We have to start a free, ad-financed, artist-friendly, better-paying YouTube alternative — owned and operated by the industry — and we need to use that service exclusively. All revenues straight back to the artists.

          • blahblahblah

            So, top label executives are just realizing that getting people used to free music isn’t such a good thing? Could we just fire any of them now who were in a position to say no when Spotify launched here? I’ll do their job better for half the salary.

      • Anonymous

        I was referring to viral in a certain sense so I apologize for that, in the business sense I’ve had music go viral, if that’s what you want to call it, but no one paid, so the viral is just a means to try and sidestep and divert the reality of non-payment…

        And its true that tweens and soccer moms are the main demographic watching videos, I don’t really count what the industry does, I’m considering the customer/fan…

        And who said I was poo pooing tweens and soccer moms? I love tweens and soccer moms, some of my best fans…

        Reply
    • An Indie

      For one, there is no way to “cancel” participation at Pandora unless Pandora opts to honor a request not to play your music (highly unlikely in the circumstance of such a request for a full catalog pull down). Pandora operates under the compulsory license and so long as they honor the limitations of that license they can play whatever music they wish (just like radio can).

      Beyond that, considering the equity positions that the majors hold in Spotify (and other streaming services that rely upon a freemium inducement) one could sooner expect pigs to fly than the majors pull their music from these services. 🙂

      Reply
    • Name2

      Yeah, Apple worked its ass off to accumulate more liquidity than God, and then they’re going to blow it all cutting checks for music no one wants to pay for. Is there any entity in the world you people believe DON’T owe you a living?

      Reply
  4. Jeff Robinson

    Is Beats even paying any royalties yet?

    I would hope that this company does NOT become the future of streaming.

    Reply
  5. Tcooke

    3 bill was mostly for the headphones ( no comment). Jimmy be right though. That should be the goal, get behind the paywall.

    Reply
  6. Anonymous

    Apple can kill Spotify with this, and that’s what they want. Apple doesn’t need to be profitable the way Spotify does and once Apple starts locking up interactive streaming exclusives from blue chip artists (which I expect they will do from day 1), stand alone competitors will have nowhere to hide.

    Also, YouTube has never done anything well except for maintaining a platform for others to publish content. They’ve failed at almost everything else, and their confusing MusicKey product will likely be dead on arrival. YT as been free for too long. Try telling people they have to pay for air and see how that goes.

    Reply
    • Anonymous

      Technically, Spotify doesn’t need to be profitable either. We can tell this from the fact that they aren’t profitable. According to analysts who aren’t biased (aren’t artists or tech/vcs), Spotify can’t ever be profitable. The all you can eat subscription for streaming is a bad business model – the numbers don’t work.

      But they already have a lot of investor cash so they’ll carry on for at least a few more years despite losing money. Probably even IPO.

      Reply
    • Binch

      I hope you are right. I want to see the scum die, and Apple be a white knight, though that sounds like a real nightmare gone wrong, too, but at least they’re a hardware and software company who aren’t supported by piracy like the others are.

      Reply
  7. Anonymous

    Just for the record, Apple has less than half of the mobile market. They are big but they aren’t all-encompassing. And as we’ve seen from Google’s exploits (Google Wallet, anyone?), big market share in one area doesn’t guarantee success in a different market, even if it’s adjacent and/or you already have an in.

    Reply
  8. Anonymous

    Bit off topic, but it appears Spotify is caving on their requirement of all tracks being available for free. I have a track showing up in my library as blue and says “This track is exclusive to Spotify Premium and Spotify Unlimited users.” This is a decade old greatest hits album too for what it is worth.

    Reply
    • dilemah

      Apple have the largest catalogue on line, plus the 600mill + CC subscribers. Spotify and similar competitors will have a shortage of important catalogs from well established acts, and for what we are living now, any smart Artist will pull their whole music from Spotify and similars, is a matter of time. Spotify will be gone by 2016.

      Reply
  9. Musicservices4less

    As everyone reading this article can see, there are many moving parts/players to this situation. The players are the most powerful in the world (Google, YouTube division, Apple). 15 years into this technological revolution and the players are still floundering in making the music business work for those in the business like creators, manufacturers and distributors. The distributors claim and admit they are losing money, the creators say they are not getting enough money and the manufacturers continue to be mostly lost in the sauce.

    Luckily for the music business, the above most powerful have overreached in dealing with content providers and have not read between the lines on the political message sent to them by lawmakers ie you had 15 years to get this straightened out and now it appears that you cannot do it on your own. Times up. And we now have a national security crisis caused by Google/YouTube and the internet in general. So we the government(s) are stepping in. It is the latter issue that was the tipping point. Music alone nobody in Washington really gives a shit unless it relates to votes.

    And speaking of votes, no matter what side you are on or even if you are on no side, please vote in 2016, it really is the only way to influence major policy decisions and the best way to be allowed to have these conversations without government interference like in other countries.

    Reply
  10. Yeah but...

    Apple’s market cap is (as of 11:30 EST) $744 Billion. With a B. They also have ~$180 Billion cash on hand. So, if they can add a streaming service and out price the rest of the market ($2 less than their competitors), bundle that service with their phones to sell more phones and drive the stock price up, the $3 Billion purchase price is irrelevant.

    So where’s the suicide here? Market share? Stock price? No, even if this service fails, which it very may will, I don’t think Apple cares. They’ll kill it and continue to sell an ungodly amount of phones.

    Reply

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