How Apple Music Will Trick You Into Paying For Music Forever – Forbes
With the launch of Apple Music at this week’s WWDC keynote, one of the biggest ‘when’ questions around Cupertino has been answered (when will Tim Cook and his team launch a streaming music service?). Now the pressure is off, Apple can concentrate on other matters that will change the world (such as the Apple Watch).
That’s not to say there were no winners from Apple Music who are very pleased to see Apple’s streaming service finally launch.
The real winners were the major music labels and their bottom lines. With the launch of Apple Music, the triplet of Sony Music, Universal Music Group, and Warner Music Group, have covered all of the major musical streaming outputs. The executives of these companies believe that monthly subscription streaming services is the way forward to pay for music. In one recent example, Sony’s CEO Doug Morris told an audience at Midem that ad-supported streams are nine times less efficient than paid-for subscriptions in generating income for the labels.
Naturally the labels are pushing for the best deal possible from those that sell or stream their music (presumably with ‘favoured nation’ clause to maintain parity). One of the more noticeable elements about Apple Music was the cost of $9.99… a cost that matches other popular streaming services. While the small print may show some small differences between the services, the broad offering is similar.
Rather than having consumers decide what album to buy or which individual tracks to download, and therefore actually judging the music as the product, the decision will be about which service gets the ten dollars that month.
There is consumer choice on the service provider, but there is no differentiation between the service – it is ten dollars to listen to music for one month. There’s no consideration about how good the new album from Aminata is, or if you want to push out the boat and grab the classic ‘Cara Mia‘ from Måns Zelmerlöw. Much like asking a child if they want to read ’Wobble Bear‘ or ‘Big Daft Fish‘ when they get into bed instead of asking ‘do you want to go to bed?’, the decision about going with Apple Music or Spotify will be the focus, rather than wondering if you actually need a streaming service.
This layer of distraction between ‘paying’ for music and ‘consuming’ the music is vital in the eyes of the music industry. It’s telling that during Apple’s highly polished film clips at the keynote, one voiceover implied that paying to own music was a thing of the past. Right there, buried in the middle of the two-hour presentation, is one of the key driving forces for music subscription services.
It’s not about having users deciding to make a one-time purchase of one track from an album and then listening to it for the rest of your life. It’s about getting them to pay a monthly stipend to the industry for as long as you want to listen to any music. Once the monthly payments stop, no more music. In that sense it’s similar to a monthly line rental on a mobile device, utility bill, or insurance payment. It’s one more regular bill that you automatically pay from the household income because that’s what life expects you to do.
The key for any business is to have predictable and regular income. Music subscription services provide a regular income to the major labels,, and it is left to their contracts with performing artists and songwriters on how to divvy up the income from the streaming services (which, incidentally, adds another layer of diffusion between the funds received from the listener, and the funds paid out to the talent).
Unlike the major format jump from vinyl to compact disc in the past which generated a significant but one-off contribution to the bottom line of the music industry, the move to streaming means that the you’re going to be paying every month to listen to ‘Rubber Soul’ if you switch to Apple Music, if you stay with a rival, or if you shop around and try out the other streaming services to see how similar they are… your money is still going to end up with the major labels.
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