Frank Ocean’s Blonde, an Apple Music exclusive, sits atop the Pirate Bay’s torrent list shortly after release.
Despite a chorus of protests surrounding the destructive nature of Apple Music exclusives, Apple CEO Tim Cook has vowed to continue the practice. But why?
We’ve talked a great deal about the tremendously destructive impact that streaming exclusives create for the music industry. That includes big punishments against fans actually paying for music, and therefore helping the industry recover.
So is Apple refusing to budge?
On Wednesday, Apple CEO Tim Cook vowed to continue scheduling Apple Music exclusives, a strategy viewed as advantageous for Apple but highly problematic for the music industry and hostile to fans. “Apple Music is the premiere destination for new artists and existing artists to launch their exclusive music,” Cook declared, while disclosing a total of 17 million paying subscribers.
The announcement closely follows two key events: one an exclusive release, the other, a cancelled exclusive. After a pair of high-profile exclusive album releases from Frank Ocean, dimming superstar Britney Spears opted against an Apple Music exclusive push. Part of the problem was piracy, with Ocean’s releases skyrocketing across a myriad of unauthorized platforms thanks to the heavily-constricted Apple Music availability.
But Spears may also have been spooked by reports of Spotify retaliation against Apple Music exclusives, despite outright denials of the practice by Spotify. Somehow, no one believed that Spotify wasn’t directly acting to sabotage Apple Music partner artists.
Meanwhile, Universal Music Group chairman Lucian Grainge has ordered the end of all exclusive releases, given a myriad of destructive side-effects. Beyond heavy piracy and in-fighting among streaming services, exclusives serve to punish the music fan for paying. A Spotify subscriber, for example, can’t access frontline releases despite playing by the rules.
All of which creates a huge disincentive to pay for music and participate in a massive (but early-stage) industry success story.
One question is whether Apple is feeling frustrated with its subscriber progress, with exclusives one way to spend the problem away. Apple Music is currently adding approximately 1 million paying subscribers per month, though Spotify is growing faster. Just recently, Spotify reached 39 million paying subscribers, up 9 million less than 6 months.
Apple, perhaps frustrated with the differential, sees exclusives as a great way to force Spotify abandonment and get people to switch.
One problem is that artists, caught in the middle, are easy targets. Billionaire Apple is now notorious for dangling big, fat checks in front of popular musicians, a move that almost guarantees a sealed deal. Piracy, which frustrates the industry and label, is actually less of a concern for the artist, who’s already been paid and sees illegal channels as a way to ensure broader exposure.
Cook’s comments came as part of a broader iPhone 7 unveiling, with Apple Music a key software companion to the device. Accordingly, Apple is also planning a major overhaul of its ‘bloatware’ iTunes application, one that has been bogged down with an overload of apps, music downloads, radio, TV shows, movies, podcasts, and… Apple Music.
According to industry sources, that overhaul won’t include dropping iTunes music downloads, though that is definitely in the cards with the next 2-3 years. Already, music downloads have been nixed in iTunes applications in countries like South Korea and China, with Apple Music emerging as the clear priority.
“exclusives serve to punish the music fan for paying”
This overstates the case. No one if being “punished” for paying. You get what you pay for. If you pay for a NetFlix subscription, you are not being “punished” because you do not get Amazon Prime or HBO shows. If you want them all, then pay for them all.
Similarly, if you go to a Thai restaurant, you are not being “punished” because you cannot order pizza there.
There is no guaranteed human right to have unlimited access to all musical or other creative works at little or no cost.
Of course, the ones who should be “punished” are the pirates, to erase the incentive for piracy and reclaim losses caused by piracy.
Music streaming services aren’t Thai restaurants. Getting someone to pay $9.99 a month is a massive accomplishment and a big hurdle for everyone. The expectation behind that purchase is that EVERYTHING will be available, whether the consumer can articulate that or not.
Restaurants aren’t all encompassing, they are little apps that specialize in one area. That doesn’t translate when it comes to ‘all the music on your phone!’ pitches.
But keep having all these exclusives and limiting access. Let’s see how that works out. I’d argue that it could stunt an emerging industry that is just getting off the ground and surpassed 100 mm subs.
Paul wrote:
“The expectation behind that purchase is that EVERYTHING will be available”
And that expectation exists b/c that how these subscription services have been marketed.. even though that’s NEVER actually been true.
Paul, your argument is somewhat deceptive. Exclusives are not dissimilar to windowing, are they not? You’re restricting access to a specific service as opposed to paying subscribers in lieu of YouTube or Spotify’s free tier.
The music industry (i.e. record labels) billing exclusives as ‘bad for the industry’ seems to me to be primarily because of a fear of being replaced and the fact that many artists are making direct deals with Tidal and Apple instead of label deals. Frank Ocean played his hand masterfully, and the shoe didn’t feel so comfortable on the other foot. Can you blame artists for leveraging their position in the marketplace?
The public has proven they will purchase music when it is actually of high artistic quality. Perhaps not to the levels seem in the past, but compared to the majority of music put out today, that is an accomplishment. Getting people to pay $10 a month is not and crying about the end-days because a few artists with leverage and established careers signed exclusive deals with companies that are not major record labels is hilarious. I believe some of the albums that were Apple music exclusives were also available for download? Please correct me if I’m wrong.
Apple, Tidal, and Spotify are not altruistic. That much is obvious. But the major labels have a vested interest in Spotify. If we’re going to call Apple out for using exclusives by popular artists as a promotional tool for their products, then we have to equally call out the “music industry” for its bias, 360 deals, and unwillingness to develop new and unique talent in favor of plastic pop stars digitally manufactured by a team of producers and songwriters.
All exclusives do is garentee I pirate my music. I’m not going to go out and buy an iPhone and pay an additional 10$ a month for a particular set of artists music. All this does is block off half of the potential consumers. Making the only option to either skip the album entirely or to hunt down a pirated link. It’s a no brainer…
Well Spotify isn’t playing with Apple Music exclusives either. When Florida Georgia Line made their new album a two week exclusive at Apple, Spotify removed all FGL singles from their playlists. At least that’s what HDD says and I’ve noticed the same thing a few days earlier.
What is HDD?
This is total monopolisitc action and should be illegal. If world government had any nuts to stand up to tech companies anymore (they don’t, they’re all bribed), then all these major aholes would be shattered into a million pieces. Apple, Amazon, Google would all be detonated, as they should be.
Why is the music business determined to block artists from making more money, so they can promote the doomed interactive music streaming model?
Why has congress failed to repair legislation that supports piracy?
Why isn’t every new release windowed to stimulate sales?
Why have record labels allowed interactive
music streaming services to allow unlimited free access to nearly every song ever recorded?
Why were the labels allowed to negotiate in bad faith by taking an ownership stake in a key vendor?
The exclusive music on Apple is not “unavailable” to Spotify subscribers. It’s available for purchase at Amazon, iTunes, and on CD etc.
There are issues with exclusives but this is not one.
Exclusives do not spawn piracy.
There will always be pirates, just like there will always be criminal thieves.
Streaming has contributed to the demise of music sales. It has genericized popular music. It says recorded music is not worth owning.
There is at minimum a 30% overage of fake artists with fake music in the market place. This contributes to the value proposition of music. Raise the standards of music artists….get rid of the fakes, sooner than later, because life’s too short
Iconic artists deserve exclusive opportunities. They have worked their asses off to reach the top, and should reap the benefits, before they have to step aside, and make way for next big ones. Just like with athletes, actors, movies, games, CONSUMER GOODS etc.
This is such a weird warped view of the industry…
interesting subway read. splendid comments section 100% on topic. as if dmn has suddenly grown up.
Statutory reminder: Spotify were very keen on exclusives when they were the biggest bully in the schoolyard. Not so much now. Joke for UK readers: to quote Corporal Jones, “They don’t like it up ’em”.