To Apple, Love Taylor
taylorswift.tumblr.com
taylorswift.tumblr.com
> Tomorrow, Apple announces that it will be introducing an "App Store Subscription." For $9.99/month users will receive unlimited access to all apps on the App Store. Developers will receive a share of each user's subscription payments in proportion to app usage. Apple simultaneously announces a 3 month free trial for all App Store accounts, and states that it will be making no payments to developers during that trial since users are not paying for it.
I, personally, would ditch iOS development for Android in a heartbeat if that happened. I can't blame musicians for having a similar reaction.
I am also not sure about Apple's model for the distribution of subscription fees. But e.g. in Spotify's model, it is largely large acts benefitting from indies, rather than the other way around.
I like that spotify pays royalties from free accounts, I dislike that I am effectively subsidizing this as a premium user. However, at the moment I am more comfortable with this than apples '3 months no royalties' system.
Another interesting point is that for a music subscription services, there is very little keeping users tied to one provider - all I need is the ability to export my playlists. I wonder if spotify's revenue will collapse for 3 months, but if they can be better than apple, they can get it all back 3 months later.
I presume Apple are trying to establish differentiation through the 'radio' service, but since the baseline market requirement is the ability to listen to practically anything all-you-can-eat, it'll be hard for them to achieve it there.
And think of all the cool new laborious, overcomplicated, and time-consuming UI designs we could look forward to!
Then what stops shady slot game app developer from keeping his app running in the background 24/7 and trashing the commons (or private garden, I guess)? Technical solutions can probably go a decent amount of the way, but there will always be a work-around...
> Apple simultaneously announces a 3 month free trial for all App Store accounts, and states that it will be making no payments to developers during that trial since users are not paying for it.
That's a terrible offer no matter how you cut it.
Indeed, you can see Google attempting to attract developers to its ecosystem and away from Apple's in some of their recent developer policy changes (no app review times, etc).
But now we're getting way off topic. :)
If they were able to track how often a person used an app then I don't think that would be too bad except for extremely niche apps which are usually enterprise already. I would take a smaller payment if I got paid $0.01 for three minutes my app was open on a phone, rather than charging $0.99 (or even $2.99)... It depends on the app though
In other words, If I only listen to 'my favorite niche band' in a month, but don't use the service much, it's unlikely that they will see anything near the full possible share of royalties from that months $10. The system instead is biased to musicians whose fans use the system most heavily on loop - ironically more likely to be taylor swift type pop megastars.
[edit - explained more clearly by http://lit.vulf.de/spotify-so-little/]
Anyone know how apple will compare on royalties after the 3 month period compared to spotify? I've been a spotify premium subscriber since 2009, but would move to a system that meets my definition of equitable.
But what if you had just ditched Android (i.e. Spotify) last year after publicly complaining about its usurious terms?
Are there? (At least for independent musicians?) From my experience, it seems like a decent comparison—you can make an app or album for $2000 or $200k.
http://www.digitalmusicnews.com/permalink/2014/11/25/band-ju...
A career in tech has a crazy pile of expenses associated (Stanford isn't giving away comp sci degrees; continuing education unless you want to end up a one-trick pony), in additional to all the unfortunateness of having to live in a hyper-expensive tech hub for as long as you want to make money at it.
Yeah, you can much cheaper degree (I did) and live in a cheaper region (I had), but that almost guarantees hitting a lower career ceiling than if you have a Berkeley diploma and live in San Jose.
Almost all careers involve tradeoffs. If you want to rise to the limits of your abilities you're going to have to make some hard decisions. Otherwise you'll be competing with the other workers who are happy to get paid less for easier work. In tech, this means a mid-range job in a small market. For musicians, this means playing gigs in Des Moines instead of clubs in LA. Them's the breaks.
I would contend that for somebody who's already going to Be Good At This, that would be a crazy expense from a bad decision. The best three engineers I know have degrees from UMass-Lowell, UMaine, and the University of Delaware. (I'm not #2, but I went to UMaine and graduated with $20K in loans. Paid off in four years, and I slacked.)
As far as lower career ceilings--each of those people (and I) are at lead/staff-level positions in the Boston area and have not wanted for challenging or well-paying work, while having expenses less than half of your average San Francisco tech nerd. The specter of the Bay Area looms large, but I think it's silly in how all-consuming it's considered.
- Different pricing. Apps can be anywhere from $1 to $500, while songs typically hover around $0.99. The wide variance in app pricing makes a subscription model challenging to satisfy all users and developers.
- Different markets. When you make an app, you're tying it to be used on a specific platform. It is additional work to make it cross-platform. That alone is limiting for an apps' market, and in the case of iOS, the platform's owner can impose additional limits. Music is open-ish in the sense that you can make music once and release it in a way that it's playable, essentially, everywhere.
- Different revenue streams. Music is a digital good like apps, but it's also a physical good (CDs, records) and most importantly it's a service (live performances). It's possible to have additional revenue streams with apps, but it's not as common as it is with music. If Apple spontaneously created an app subscription model and your app was iOS only, you would suddenly be very locked into that business model, whereas with music you will always have additional options.
This is slightly off topic, but it seems that iTunes song prices have silently increased to $1.29, which is a huge increase. There are still some $0.99 songs out there, but most of the tracks I buy are $1.29.
Seriously though, here in Australia the regular price for a track is $2.19 -- which is absolutely ludicrous to be honest. As of today, that's the equivalent of $1.70USD
All the more reason app developers shouldn't/wouldn't go for such a deal.
I don't think they're being greedy, any more than I think users are being entitled when they wait for steep discounts on Steam games or refuse to pay .99 for an app someone worked really hard on.
Price trends towards marginal cost, and marginal cost for digital IP is zero. That's true if everyone on both sides is a group of angels, devils, spoiled brats, or automatons.
They expect Apple, Spotify, Pandora etcetera to take all the risk (including the major risk of being unilaterally torpedoed by those same artists), do all the upfront investment and then whine about not getting a big enough piece of the cake.
Taylor Swift is being an outlier here in the respectful way in which she communicates. And she knows it, that's why she chooses her words very carefully.
Most of these artist just bitch and whine about their percentage, ignoring the fact that, with antiquated copyright laws firmly on the side of the music industry, technology firms are taking quite insane risk in their attempts to innovate the way music connects to the listeners.
If they hadn't, sales of music would have totally flatlined by now and those artist would be way worse off.
We're witness the bankrupting of artists over time. And it amazes me that on a forum of content creators, you can see the self-interested individuals rationalizing it as fair. We can argue about the business models all day long, but it should be in tandem with the fact that life isn't fair, and what's happening to these artists isn't fair. The way people are talking about it, it doesn't really come off that way.
Sometimes I wonder if SOPA would have gone through and achieved the purposes it was set out to do - yes, let's be ideological for a moment and talk about the purpose vs the potential abuse. A lot of websites that harbor piracy are no now no longer available, and it's way more difficult to pirate your favorite music. What would that world be like, for consumers and artists?
Maybe more artists would pull their music from the streaming services, which were formed to fight piracy. Now all of a sudden that 9.95 per month you pay for music isn't so great, because not everyone is on there. The streaming services were built as an alternative to a crime - piracy.
To me the end result would be simple: The average user would have to pay more for their content, and that money would flow more into artists pockets, and those who work in artistic industries, which would reinforce more and better artistic creation.
I am probably one of the few: I pay for all of my content, and not on streaming services. I don't buy singles, I buy the whole album. When a friend opens a business, I don't immediately ask for a deal. I go in, and pay full price, and try to support that friend as best as I can. I may be old school - I pay for things, I am happy to pay for things. I want to financially support people who create things, because I want more people to have a means to be able to go out, create, and be rewarded for their work.
Unless you're paying them directly, you're still not paying the artist. Streaming and piracy don't even come close to the drain that labels put on income flow to artists. Artists made just about $23.40 for every $1000 their songs sold for in 2010, according to TechDirt [2].
I wish the world were as you described. But it's not. SOPA came close to destroying free speech online instead of guaranteeing artists their fair share.
[1]: http://www.bradsucks.net/archives/2007/05/22/where-your-musi... (an indie/marketplace artist's view)
[2]: https://www.techdirt.com/articles/20100712/23482610186.shtml (standard industry view)
I'll do whatever I can to support content creators.
Does that make it OK for artists to get 2.34% of what listeners pay for the music they make? Or does it make TechDirt's figures wrong? If so, how?
> Or were you not paying for anything already, and then came across that info which now justified your position?
I am not striking, but I agree with everything s/he wrote. And, as it happens, I do pay for all the music and video and software I acquire. So it is simply not true that holding the opinions s/he expressed is always a rationalization for not liking to pay for things.
(And: do you actually have any evidence that striking pirates things rather than paying for them? Or do you just assume that anyone who takes a position opposing yours must be a pirate?)
TPP/TTIP/RECP leaks suggest the criminalization of non-commercial copyright infringement, where prosecution will be possible even if the copyright holder does not want to prosecute, e.g. fanzines.
Can we develop a payment mechanism which moves funds from audience to artist for virtual goods, with no exchange of music (which can be obtained on any channel), but which provides a non-forgeable "protection from being prosecuted"? This would return control to the artist.
Unbundle the music license payment from music delivery payment.
The reason labels have such high overheads is the same as for movie studios . They subsidise a lot of non-Taylor Swifts music that don't end up being profitable. The costs of the failures end up impacting the profits of the successes. The flip side is - lots of artists get studio time and songwriting time even if they haven't already proven themselves.
For Taylor Swift, sure. But there is an increasing number of musicians owning their own recording equipment and producing pro-level recordings out of their home (just like starting a software business out of your home is increasingly common).
For these people, they put up the capital. While I won't condone piracy of any copyrighted works at all, it's not reasonable to assume that all musical artists are impacted by copyright infringement in the same way.
Home producers may well be absolutely thrilled to make a few thousand dollars in sales a year, in order to continue funding their own work. Why take that away from them through piracy?
[There's also the argument that small act home producers should be thrilled to get the exposure even if nobody is paying for their recordings. As a home producer myself, I find a small amount of comfort in that, but professional-level recording and music equipment isn't cheap... I'll fund it with other income as needed, but I'd rather have my music outfit be self-sustaining.]
Maybe I'm an edge case, but I bought music until I got a Spotify subscription. Now the only time I buy is when it's not available (for instance, Tech N9ne latest album was on iTunes a week or two before Spotify)
- If artist sells music on a DRM-free downloading service like bandcamp.com, support them
- Otherwise let them starve
To me the end result would be simple: The average user would have to pay more for their content
People aren't exactly burning the money they would have otherwise spend on such content; they aren't going to stop paying their rent because they have less free music. The discretionary income of the median person is simply not that high, and a rich person won't start buying hundreds of albums to make up for the ones the working class can't afford.
And people listening to less music instead of pirating may be more just or moral or whatever, but it doesn't pay the artists' bill anymore than piracy does.
I may be old school - I pay for things, I am happy to pay for things.
I, on the other hand, am new school, part of a generation with 25%+ unemployment and many more in precarious jobs. It's not that we don't like to pay for things - it's that's often simply not an option.
If SOPA had passed, we would've just go back to sneakernet sharing.
I pay for all the movies I watch via iTunes. I never pirate movies. Most of the music I listen to is internet radio (i.e. it is free but with the artists permission). Some of my friends consider me odd, and watch more movies than I do, but that's OK.
That's not what I said, please read again.
Nobody has a human right to Taylor Swift's music. If you can't buy it then just go listen to the radio, or use Spotify's ad supported service, or do something else.
Sure. That's why I said it might be more just and moral. Please read my post attentively before replying.
But how many artists has your self-sacrifice of not pirating actually helped, compared to someone who spends the same amount but also pirates?
I do believe that in Taylor Swift's case, you can't; at least not all of it. She didn't put her latest album on Spotify either. Honestly, I've got little sympathy for her: she's the most famous and successful singer-songwriter in the last decade by far, and these sorts of stunts don't really endear her in my eyes. But she doesn't care, 'cause haters gonna hate hate hate, right?
I'm not a "content creator", I'm a developer. What I do has a lot more in common with what a plumber or an electrician does than with what Taylor Swift does. My programs are not expressions of my soul, they're well-crafted tools to solve a particular problem that I have either a) been paid to solve, or b) hope to sell to somebody else to solve their problem.
Music is always competing with its back catalog, and old music weathers the years a lot better than old video games.
Software developers aren't immune to piracy's effects, either. Whether we like it or not, we're quickly shifting into a world where art is only viable as a labor of love. Everything being digital means copying is free. Scarcity has gone out the window. Now if only our increased productivity and automations led to lesser and lesser working hours, we'd all have a lot more time for artistic endeavors on the side.
But yes, it's becoming increasingly difficult to sustain yourself solely as an artist. Life isn't fair, unfortunately.
Would the world be better if we had purely gratis art? I don't know ... the production values would certainly be a lot lower. But maybe people doing things solely because they enjoy it, rather than for the paycheck, would result in more passion and creativity; and less cash grabs. Or maybe everything would be awful.
Either way, it seems futile to rail against something none of us can possibly change, and wish for the good old days of $15 CDs with one good song on it, or $200 OS installation CDs, or $800 paint programs.
Isn't this one of the big reasons for the rise of SaaS apps, though? Developers, unlike musicians, have found a way to combat piracy in a way that both consumers seem to prefer (lower upfront costs and usage based pricing) and developers benefit from (more revenue over time in exchange for delivering real value).
Besides, being forced to provide 3 months of free usage without any say in the matter is hardly defensible due to piracy. It's even less defensible when the party enforcing the free usage is the party that stands to benefit most from it.
For two examples:
I've actually been pretty pleased with Lightroom/Photoshop as SaaS because these apps still often have new innovations that actually make my life easier as a hobbyist photographer. Thus I don't mind paying per month because I'd probably already be upgrading to the new version every year anyway and this is just spreading a similar cost out over time.
OTOH, Office's switch to SaaS is what finally pushed me over the edge to using free ("as in beer") alternatives... they can keep rejiggering the UI this way and that way but I can't imagine what they would add to Word or Excel that would make them seriously more useful to me, it was never a must-upgrade for me (YMMV if you work in an enterprise office setting or whatever) and thus the SaaS move is not good for my usage.
Compared with Office 365, you don't get the free 1TB of cloud storage, the 50GB mailbox, the full online versions of Office, the ability to stream Office programs without installing them (so you can use them on, say, a cybercafe PC), the add-ons and extensions, the cross-platform tablet and smartphone apps, the free upgrade to the next version of Office, and so on.
Office 365 is a huge ecosystem play, whereas OO/LO have no ecosystems.
Otherwise, UI changes are annoying, but the basic Office UI hasn't really changed since 2007. It changes less often than, say, Gmail.
The number of ways to sustain yourself has significant increased in recent times, and some of those don't even use copyright as a mean for revenue. They are by nature immune to piracy.
Taken Patreon and kickstarter. You can not pirate art which has not been created. An artist can decide how much wages they demand rather than find an other job, which incidental is how the job market works. If they agree to a certain amount, they get paid and do the work agreed on. Everyone walks away happy, the artist got paid, and art is created.
What is getting harder to do is getting repeatable paid for work you done in the past. Most programmers do work for hire, and they survive quite well on not being paid for every copy of work they once made. So long there is a strong interest for new work to be created, old work will be what validate the artist current pay.
I know a web comic that update twice a month and the author current gets paid $5k a month to do so. No copyright is involved, no police and no SOPA. Just an artist and their fans, enabled to be sustained by the basic model of people wanting more art to be created and a way for that to happen. When we describe the future as "people doing things solely because they enjoy it" we limit the market available to artist to how it was done in the past, and it seems artist themselves are instead choosing to find new ways rather than to close up shops.
But so has the offer; anyone with a computer can create and publish music nowadays, which is both good and bad; good for the creative industry, bad for income for said creative industry because only a small percentage will ever see money. Same with the webcomics you noted; all you need is a computer with the worst drawing software to recreate something like XKCD. Everyone can do what they want / enjoy, but only a very, very small percentage of those will be able to sustain themselves off it - especially, or mostly, in the creative industry.
In my own profession, writing compilers, you simply can't sell them anymore. That hasn't deterred me from continuing to do so, I just adapt and find other ways to make a living from the business.
A little further back than that, but not much further. Frank Sinatra, maybe. With radio and recordings, for the first time a musician could get revenue from people far away.
"In my own profession, writing compilers, you simply can't sell them anymore."
Compilers, operating systems, browsers... Maybe software as an industry only had a limited lifespan. In the early IBM mainframe era, machines were expensive, vendor-provided software was usually included, and there was not much of a third-party software industry. Now, software is very cheap, and ancillary to advertising or services.
Internet downloading removed all the friction, and prices went to zero.
However, there's still plenty of opportunity doing service, maintenance, custom work, training, etc.
The "build it and they will come" is a stupid Hollywood fantasy. Even the Beatles went nowhere until they hooked up with promoter George Martin.
So incredibly true.
And even whenever I do try and talk about my software, people usually perceive it as an attack on competing software (you can't say why someone should use your product without implicitly stating why they shouldn't use someone else's); or as shameless self-promotion and advertising (even though it's all FOSS) =(
If any file hosting service can get shut down for piracy, Apple should be held accountable to the same laws.
Telling artists to work for free while they benefit sounds a lot like asking someone to work on spec, to which I respond: Fuck You, Pay Me (https://www.youtube.com/watch?v=jVkLVRt6c1U)
I care about a world where the most useful apps are rewarded.
While it may be the case that pay-per-use would be a great model for developers (though I'm highly dubious that this is the case for anyone that isn't making a trivial $0.99 app), that isn't the main thrust of my hypothetical.
The problem with this scenario is the loss of a full quarter of revenue from every new App Store user in the interest of Apple acquiring subscribers. Do you think it would be a great deal for app developers to not be paid for three months of every single App Store user's usage?
But... to address your main point - yes absolutely, I'd happily give up a quarter of revenue to move to such a scheme, where my recurring revenue would be much higher because my apps are actually used by people and have a lower barrier for new users. It would be a mutually beneficial chance for developers, apple, and consumers.
However - I do grant that developers are more likely to be able to finance this transition than musicians.
Since nobody is paying for the music during the trial, and the intended result is higher revenues for the artists (and for Apple, but notably proportionally more for the artists), it is flatly disingenuous for the artists to position Apple as getting all the benefit.
What if Apple offered the artists an advance covering the 3 months based on current iTunes revenues, and then recouped this over three years by taking a higher percentage for that period from the artists who opted for it? That would solve the problem of the 3 month gap.
I use the Spotify app 24/7, yet I use Editorial and Pythonista (both costing around $7), an app I value to a much greater degree, sometimes just -8h daily. And the truth is, while OmniOutliner is so much usefuler than say Pinterest, people spend a lot more time on Pinterest.
Don't get me wrong, I do see why the losers are probably the 99¢ apps, after all, you probably do not use those on a concurrent basis. Yet, if we go by the hourly usage, people use social networks like Pinterest and Facebook, games like Temple Run, and music services, to a much greater degree overall.
Most services eat the cost of trial periods in hopes of snaring subscribers and making up the loss. Apple is being dishonest by claiming free trial while passing off the costs to the artists by relying on Apple's name and status so as not to have people question it. In other words, they are spinning the story faster that old 78s
But that means that if revenues rise as a result of the new service, Apple should keep all the extra profit rather than sharing it with the artists.
Is that what you really want?
Revenue rising with the new service will eat into the other revenue streams from sales. Subscription revenue has already been proven to be laughable with Spotify.
Saying that Apple gets to keep all the extra profit because they paid the artists during arbitrary terms set by Apple is incredibly short sighted, as the profit you speak of means profit to Apple, but a loss to the music industry.
True, but that's because the labels keep the vast majority of Spotify's payout.
http://recode.net/2015/06/15/heres-what-happens-to-your-10-a...
My point is not that I believe that Apple should keep the excess profit. It's that if Apple's service increases the overalls profit for the artists it's reasonable that they should share in the costs of marketing. Otherwise the artists are double dipping.
Precisely. We're talking about a company with $200 billion in cash reserves asking artists - many independent and hardly famous - to subsidize their marketing efforts.
Why? Apple negotiated that arrangement with those artists' labels, who agreed that this was a fair and equitable situation. You and I might like to think that we would have chosen otherwise, but the people involved in this contract were happy with the outcome.
Remember, Apple didn't unilaterally come up with this. They didn't just open a service and announce that they weren't going to pay anyone.
To make the analogy a little more accurate:
> Tomorrow, Apple announces that it will be introducing an "App Store Subscription." For $9.99/month users will be allowed to use one App Store app at a time. When an app is running, it will present a button allowing a user to purchase that app so that they may use it any time they want, whether or not their phone is connected to the Internet, and concurrently with other apps. During the 3 month free trial, Apple will not pay royalties for streaming apps but will pay normal royalties for any apps purchased.
This would suck for the Omni Groups and Mojangs, but absolutely awesome for tiny shops who currently make almost nothing and would now have much greater exposure. Likewise Taylor Swift doesn't need more exposure to sell her music, but Joe Garage might actually pick up a few listeners and fans. You see this is a money grab. I see this is as a necessary (and label approved!) bootstrapping for long term gain.
And in the mean time, even major artists will continue to get their current revenue stream from radio stations, Spotify, iTMS, etc. unless we really believe that Apple Music is going to gain a 100% market share immediately. Long term, even that would probably be a huge benefit to artists because it's almost certainly a better deal than they're getting from anyone else today.
How much is that worth to society? How much money should you make from that?
Consider an elementary teacher tasked with teaching 28 children to read and guiding them to becoming active participants in democracy rather than repeat offenders. $50k/yr. Compare a state university computer science professor who will teach dozens of new jacks this year how to measure and optimize algorithms-- setting them up for a life of full time employment while all their friends tread in the sea of shit and unemployment around them. $90k/yr. Consider a bus driver, a construction worker, a civil engineer, anyone who didnt have a chance to finish high school or College and still goes to work every day. Or those who went to ivy league colleges and resisted the urge to go into finance. Productive people.
We are all productive and we all add value, and we are underpaid. Our kids will have varying access to good education. We have less access to inferior healthcare. We spend too much time at work and not enough time with our kids. The lowest of us live in poverty and violence, relegated to feeding our children less healthy, life shortening diets. And thats just in the U.S., one of the wealthiest states on the planet.
Now how much is that song you sang worth?
Artists should be about art. If you dont like the fact that Apple wants you to be their slave, then distribute your music yourself. If people dont want to pay for your music, then keep doing what you want to do and starve or start doing what they want you to do and make money. But dont try to be about the art and say the faceless evil corporation should pay you more. It is disrespectful to the productive workers of the world.
In the Apple Music situation, there's likely very little opportunity cost unless we believe that it's going to be so amazingly and instantly successful that it will cannibalize all current revenue streams.
In the Apple Music situation, there's likely very little opportunity cost unless we
believe that it's going to be so amazingly and instantly successful that it will
cannibalize all current revenue streams.
I don’t think they’d be in this business at all if they didn’t think they had a shot at rendering the competition irrelevant.
If we say that musicians should be paid less because our standard as society is that everyone else is underpaid and that's fine, that's really disrespectful to the productive workers for the world.
The reality is that most of the people you're talking about will "waste" their meagre salaries on trivial stuff like streaming music services and satellite TV. Taylor Swift didn't sell millions of albums to nobody.
Music is entertainment, and it makes people's crappy lives more enjoyable, and that's a pretty valuable service, which is why it can be so lucrative for some people.
You should read KLF's The Manual. For purposes of achieving "this summer's big record", there's quite often not a lot of correlation with training, study, talent, etc.
Not saying that's always the case and in particular, it's very different with artists producing more than two or three top10 hits, over time, or producing more than one successful full album with good sales. It's that consistency and prolonged creativity that really requires the talent and training. For the #1 big summer hit, it often suffices to just be lucky, hitting the right gimmick and vibe at the right time, just like a video or meme going viral.
Sure, you didn't write anything that was going to join the ranks of "The Art of Computer Programming," but surely you wouldn't be okay just giving up the hundred thousand dollars or so in royalties you could have made? Without artists writing hit summer songs, there would be no hit summer songs. Without people writing flavor-of-the-month technical books, we wouldn't have those either. You might scoff, but people should be paid for these things.
"If you dont like the fact that Apple wants you to be their slave, then distribute your music yourself." That's exactly what Taylor is doing. What's your point?
Most artists aren't successful (if even) for more than a few years at best. The lifespan of their albums even less so.
(Some old data: http://frumin.net/ation/2008/05/climb_the_charts_schmimb_the... )
Okay, it might matter when it happens: It might be really catastrophic to release your album right when the service starts (actually it sounds like Ms. Swift is pretty smart now, eh?). Though then you might want to hold off for a whole year entirely. Hold on now, why is Apple dictating the release schedule of my albums? I thought they weren't a record label...
...oh wait.
Users frequently _cost_ money. Ask anyone who has significantly scaled freemium services.
Exposure to lots of users who might not use your service can kill your business.
If your service is really that good or serves a real need, you would recognize these potential users and market to them _aggressively_. You would even raise significant capital to do so if you did not have it. Seeing the value in your product, VCs would invest in you.
Even if your product has no inherent costs to provide as a service after it is made, you scale the money and time that invested in it based on your expected reach/profit and your profit model has just been thoroughly fked by Apple.
This definitely applies to people who produce music too because the product you're releasing has a profitable shelf-life (except for unicorns, really) and artists release on a schedule that their market (and they personally) can support.
You put a certain amount of money and time into an album based on how many people it will reach and the likelihood and timeframe before you can put out another one. Some artists release every few years, some every year and some release multiple albums per year.
If Apple is giving away your album for 3 months and you release 4 albums a year, they may be giving away 1/4 of your yearly income...(Think of it like Big O and worry about your worst-case performance.)
Using revenue streams that you don't control is hazardous. Relying on them is outright dangerous. Using revenue streams that you don't control AND marketing streams that you don't control? Suicide.
Note: this is not an argument for whether you should pay for music or not...that's a topic too hot for HN.
And that would be an incredibly productive artist. Most artists release something like 1 album every 1-2 years, at best.
Many well-known artists have released multiple hit records in the same year before though and many more are releasing their own albums and producing other peoples. In the early 60s popular artists sometimes put out two hit records a year (Bob Dylan, The Beatles '63-'65)...Led Zeppelin did that once in '68. David Bowie put out two hit records AND co-wrote and produced two Iggy Pop records in '77. CCR put out three LPs one year...
It happens a lot more than you realize.
I really want to drive home the "you're going to work just as hard, but for less money" argument to get people thinking about it the right way.
It's no different than music piracy, which actually I don't care about, just don't be dishonest about doing it as a business.
I think that all transactions _inevitably_ break down when (at least) one party has no skin in the game or when they misestimate their or the counter-party's stake. (Call it the busterarm theory of economics).
The only possible skin in the game that Apple has here is their brand. Their offering here is basically a value statement that Apple's brand and what it brings is worth more than artists will be losing in streaming dollars.
I think Apple is significantly misestimating both their risk and their counter-party risk here. _And_ the risk to their brand is effectively zero. It'll be interesting to see what happens. My impression of their music offerings was that their real value was the trust they had with both artists and consumes; they probably don't see it being that way.
One cannot operate a paid media streaming music while simultaneously proposing that the value of that media is zero. There's that old business maximum that if you want to know what a company cares about, look what they spend their money on.
> Exposure isn't necessarily good for an app. Users
> frequently _cost_ money. Ask anyone who has
> significantly scaled freemium services.
You can't just "be ready to host a 100 million users, tomorrow" in the early stages of your business.
If there are credible signs you will acquire 100m users tomorrow, and you can't walk in to a VC and walk out with a big chunk of money for a small amount of equity, it means you don't have a real business plan.
Additionally, I would be interested in any examples you have of companies acquiring 100m users overnight, or anything within two orders of magnitude of that.
But part of your argument has merit: it's the same reason that "exposure" doesn't create album sales. There's no real chance (really, there isn't) that you have a product that will reach 100m people tomorrow, so you shouldn't be producing music as if you would.
> You can't plan for it.
> The corpses of businesses that scaled past their ability
> to serve their customers are real.
> Turns out that a Rails App + someone calling themselves a "Serial Startup CEO" on LinkedIn don't necessarily equate to a business.
Rails, like any other tool/framework, works perfectly well for certain kinds of problems. I would say this is very true for the kinds of businesses that most "serial startup CEOs" are solving. Twitter gave Rails a bad reputation because Twitter's problem was exceptionally bad for Rails at Twitter's scale. In most other cases it's just poor engineering discipline, whether it's in choice of tool or how it is used. It turns out that ActiveRecord isn't really a great tool for dealing with 450M+ write transactions per day. Wasn't designed to be.
Rails is powerful and ubiquitous for very good reasons. The tools that often get the most hate end up quietly doing their jobs or, worse, growing up and becoming better and everywhere. JavaScript, PHP, Lisp, C, Java? And that's just a few programming langauges...There's a holy war over Text Editors that aren't ever going away.
It's not a "web 2.0 startup" specific problem we're talking about. Rapid growth is notoriously one of _the most common_ reasons that companies fail (regardless of if that failure puts them out of business or not).
http://blog.shiftyjelly.com/2011/08/02/amazon-app-store-rott...
> All we got was about 300 emails a day to answer over the space of a few weeks, that left us tired and burnt out. For all we know most of the people who wanted our application, now have it. To add insult to injury Pocket Casts relies on a server to parse podcast feeds (allowing instant updates on your phone), and all these new users forced us to buy more hardware just to meet demand. Hardware that we are going to have to support indefinitely at our own cost.
Can you fault Shift Jelly for not being able to see through this?
It only works if there is a high enough proportion of conversions to paid.
> It only works if there is a high enough proportion of
> conversions to paid.
From what I have observed, most people (the casual listener) will listen to the free streaming services (pandora, apple radio, etc). When people want to listen to a specific song they listen to it on youtube.
This is kind of the problem though. You might, but most iOS developers would take the lumps and continue on as normal. iOS is too lucrative a market to ditch on philosophical grounds. After all, if Apple did adopt this policy, it's not even clear that it would be their worst offense regarding the iOS app ecosystem.
And that's the lesson Apple learned from iOS. They're just applying it now to their music store.
Go to top revenue: none of those apps are paid. They're all free (with in app purchase). The market itself "raced to the bottom" to a world where, yeah, most the apps actually succeeding due in fact operate as if they're "free" for x months, and then you make orthogonal purchases. Sure, no one is stopping you from charging 99$ for an app on the store, but most of us know that relying on that model is like hoping you're a NBA-level player (or rock star, ha!).
Developers aren't complaining, well, they are, but aren't desperate because we at least have created an alternative for ourselves. Sure, we all wish we could charge box-sale rates, but at least we;ve figured out something to do instead. Maybe this is what the music industry needs to do. Maybe I should be able to listen to anything I want but be able to in app purchase taylor swift emoji or t-shirts or what have you. Maybe that looks like an innovative industry as opposed to having come up with exactly ONE new idea of how to sell music (rhapsody style streaming) in the last 10 years. These are teens we're talking about here. Put a teen in a mall and tell me its hard to get them to buy something. Come On! If they're not buying the EXACT something you're offering, maybe its worth tweaking it just a TINY amount.
If there was a subscription program for apps, I could see apple introducing a similar trial period.
http://readwrite.com/2011/08/02/amazons_growing_appstore_pro...
Oh wait.
"For $9.99/month users will receive unlimited access to all apps on the App Store. Developers will receive a share of each user's subscription payments in proportion to app usage."
is exactly what Kachingle unveiled back in 2010, and the public hated it. So, if this wasn't Apple pulling this stunt, we know how much the public would hate it.
I have an app that is "expensive" ($15) but I have dedicated users who paid once four years ago and continue to use the app today. All the major updates since have been free. While I don't know whether the pay-by-usage model would be financially better for me, I'd be pretty open minded about it and wouldn't mind the free trial.
The revenue from all users is pooled, and then divided per listen rather than per user/artist etc.
So this'd be like splitting the app store sub revenue by "app launches" or some other bullshit.
Pop junk like Taylor gets a far higher fraction of revenue than they deserve, from teens listening to it non-stop.
Artists that I like get 0% of my cash, even if I listen to nothing but their music.
The system would at least be fair in scope if artists got a share of each users subscription fee, split per listen for the songs they listened to.
That the payments involved are very small and mostly go to middlemen is a separate problem, the whole system is designed to fuck niche artists.
Not that this excuses what they're trying to pull here or anything. By trying to weasel out of paying any US taxes, they can't spend their own money. So in this case they really might be too poor to make this deal work otherwise.
Good for Taylor Swift to stand up to this kind of crap.
There are actually people who do everything they can to minimise their tax liability in order to reduce the money spent on things they consider unjust: https://en.wikipedia.org/wiki/Tax_resistance.
Every dollar not paid in US tax is a dollar that won't contribute to blowing up people in the Middle East who have the misfortune of being in proximity to suspected terrorists (tens of thousands of people over the past decade) [1]. Similarly, every dollar not paid in US tax is a dollar that won't be spent putting poor people in prison for smoking a weed that causes less violence in a decade than alcohol causes in a day.
https://en.wikipedia.org/wiki/Civilian_casualties_in_the_war...
Edit: answered above.
The conclusion:
Bolling said the United States has "the highest corporate tax rate in the free
world." He was referring to the statutory rate, meaning the rate before
deductions. On that score, he’s right: The United States does have the highest
statutory rate among developed countries. However, the United States’ corporate
tax rate doesn’t appear to be the highest once deductions and other exclusions
are taken into account.
You often see 12% or 13% bandied about as the effective rate, but that's intentional intellectual fraud: they refer to 2010 numbers, when the US was coming out of the great recession and corporations had lost a ton of money.
The corporations have the money and the drive to get the laws changed, who else does?
It seems pretty simple to me. If you want your laws changed, pool your money and go lobby the gov't just like every other corporation.
https://medium.com/@lessig/we-tried-we-learned-we-re-trying-...
A recent Senate campaign in one of the nation's cheapest media markets (Jon Tester's) was run for ~15 million bucks[0] in coordinated campaign funds, plus probably-larger undisclosed amounts of "independent" campaign funding through PAC's etc.
In the same cheap media market, Senator Max Baucus raised >$5 million[1] for the coordinated campaign in his final Senate race, in which he ran effectively unopposed. Again this $5 million does not account for his pre-existing war chest from thirty five years of Senate campaigns or the (vastly larger) fundraising of his GlacierPAC or other related "independent" political organizations.
So the minimum single-senator campaign cost is probably somewhere between those two bounds. Therefore I don't regard the core idea of Mayday PAC as a failure; instead it seems like they need to scale it before we can decide if it's workable.
[0] http://www.opensecrets.org/politicians/summary.php?cid=n0002...
[1] http://www.opensecrets.org/politicians/summary.php?cid=n0000...
Any rule set can be gamed / broken.
To keep the game going, sometimes players just need to do the right thing, thereby honoring other player's investment in the game.
And law is so much more complicated than a board game.
https://en.wikipedia.org/wiki/Gödel%27s_incompleteness_theor...
I could see a coherent tax code that taxes corporations, but not individuals, or one that taxed individuals, but not corporations (Of course with either of these there would no doubt be all sorts of new loopholes to deal with). But taxing both seems odd to me.
In Australia, my company gets taxed at a flat 30% on all profits in a year. If I want to take cash out of the company after that tax has been taken, I pay "top-up" tax that brings the total tax paid to the level of my income tax rate.
For example, if the company earned $10000, after all expenses, then it would pay $3000 in tax, leaving $7000 left that I can take out. If I earned no money in the year, my income tax rate is 0%, so the top-up tax is -$3000 (I.e. I get a tax refund for $3000). If I earned $50000 in the year, then my income tax rate is 32.5%, so I would have to pay top-up tax of $250 (I.e. 2.5% of the original $10000, which has already been taxed 30%).
Double taxation shouldn't happen, and while my company was set up for tax minimisation purposes, international corporations are able to do an insane level of fuckery to avoid almost all taxation.
1: http://assets.amuniversal.com/921b06d016420130ff2c001dd8b71c...
http://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculato...
Taxing corporate profits directly at all only accomplishes the following things:
* The profits that are redistributed to shareholders end up being double-taxed; the corporation pays tax on them, and then distributes them to shareholders who pay income tax on them.
* The profits that are reinvested end up being taxed, which reduces the amount that the corporation can reinvest. This directly reduces economic activity, since reinvestment often manifests itself in things like hiring and construction; in other words, increased economic activity. In practice, it might be possible to avoid taxes on these reinvestment activities by accounting for them as expenses and saying, "I guess we didn't make any profit this quarter".
* The profits that are held as cash are taxed, and this isn't actually as big of a deal unless the company is building up a massive stockpile to reinvest later, but in this case it would be fairer to just tax a corporation's cash holdings directly. This would also incentivize corporations to either reinvest their profits or distribute them as dividends, either of which is better for the economy as a whole.
If you are in the libertarian and/or conservative branch of U.S. politics why do you look to other countries' tax rates for guidance on what our tax rates ought to be? I have been under the impression that looking to other countries for guidance on our social policy is bad and contrary to the notion of exceptionalism.
The U.S. uniquely, I believe, considers corporations persons. Hence the Citizens United decision. Given this shouldn't the tax rate on these citizens be the same as on other citizens with like earnings?
Blaming Citizens United (certainly a harmful decision) on corporate personhood is, while popular, unduly reductive; the actual ruling was more about freedom of association. Even in the context of the debate about corporate personhood, your rhetorical question about tax rate is pure demagogy.
People who refer to taxes as confiscatory rather than as being too high are attempting to frame the topic of taxation as it being, necessarily, wrong. It's a ridiculous starting point. These same people almost always scoff at arguments that the U.S. ought to adopt some social policies because all other industrialized nations have them. It is, with this fact in mind, quite rational to ask why looking at the corporate tax rate of other countries is a good argument.
Why is it demagoguery to ask why a person in the form of a corporation should pay less in taxes than a person in the form of a human?
As for what I called demagoguery: I mean, corporations are considered legal persons in most countries - that's where the word corporation comes from - which is what allows them to own property, enter into contracts, etc., as well as to violate the law. So then the US has been more uniquely inclined to allow corporations to claim rights originally intended for natural persons (such as free speech, contract rights, property rights, rights of the accused); and there is valid criticism of that idea for various reasons, the most obvious one being that they're very different from actual people, so Congress should have to explicitly decide what privileges corporations should have rather than the judicial system tacking on existing ones. But on the other hand, it's not completely ridiculous to say that since corporations and people have similar sets of abilities in the eyes of the law, the same principles should apply, especially with respect to commerce.
Even in the case of corporate free speech, there are certainly situations where governmental restrictions on a corporation's speech would feel fundamentally wrong - e.g. suppose Congress decided political activism groups, from the EFF to the NRA, were only allowed to use corporate funds to spread their message at all if Congress liked them. Citizens United, as I said, approached this in terms of freedom of association more than corporate personhood, but neither does it seem immediately absurd to try to solve it the latter way. (Incidentally, the need to find, and the partial arbitrariness of, a dividing line between that example on one hand which should have constitutional protection, and super PACs on the other which should not, is why "corporations aren't people" is a bit simplistic as an approach to solving the Citizens United problem. You really don't want to remove protection from the former.)
Anyway, it seems self-evident that corporations and individuals need at least somewhat separate treatment by tax law (e.g. because of the double taxation issue when corporations pay out earnings to shareholders). Given that corporate personhood in general is not fundamentally and irrevocably an evil or unfair idea, merely specific implementations of it, it's not fair to be reductive and say that the person analogy must be taken to absurd extremes.
I'm uncomfortable with the line of reasoning that we "can't do anything until we change the system," but I do wonder how Wall Street would react to a company that decided for moral reasons to avoid the schemes and pay more taxes.
Amazing. We think of the RIAA, or "big music" as some kind of juggernaut force in society and politics - especially Internet politics.
But their entire industry top line is smaller than what fedex makes in a month.[1]
That debt starts to add up, even when you're paying record low interest rates on it. Right now they're losing a billion a year just in interest on their debt, that's up from nothing three years ago. At the rate they're taking on debt, they'll be losing two billion dollars per year to interest within another two years. That starts to become a lot of money to be pissing away just on interest, all to avoid taxes. Over time it'll become a net larger sum than they would have paid in taxes on the cash.
Oh, the horror.
Also likely, this isn't going to be the only or last fuck-you Apple is going to be giving artists or content producers. The ones who agree to be screwed for the 3-month opening trial will be push-overs who can be leaned on again when the time comes.
It's not about avoiding paying any US taxes, it's about avoiding paying US taxes on earnings abroad. This is why so many Americans living abroad are giving up their US citizenship. I'm a Brit living in London and I know several American born friends that have become British citizens to avoid paying both UK and US taxes on their earnings. In fact the current mayor of London, Boris Johnson, is Anglo_America and even though he has never lived or worked in the USA, because he had US citizenship the IRS hit him with a massive tax bill on his lifetime earnings in the UK. On what possible basis could anyone consider that appropriate? He promptly gave up his US citizenship.
The US Government's attitude to earnings abroad is IMHO utterly reprehensible. I'm not aware of any other country that does this. I'm not a US citizen but I do work for a US owned company.
The US Government's attitude to earnings abroad
is IMHO utterly reprehensible.
America has a system of foreign tax credits - so if the American tax rate is 35% and the company was taxed 20% in the country where they made the profits, when they repatriate the money to America they only have to pay 15%.
This is much fairer than the British approach to tax-dodging which appears to be "ignore it and maybe the crooks will donate to our political party".
So the British approach is not to "ignore tax dodging". It's to theoretically apply the same system it's always used, along with everywhere else, whilst simultaneously trying to appease populist anger over spending cuts by branding various foreign companies as socially irresponsible, although (a) there is no chance of this making any different to austerity and (b) those companies were only following rules that were considered uncontroversial not so long ago.
It's kind of a dumb strategy.
Not a US citizen here, but I think the reason is that a US citizen has more privileges than someone else: it's easier to travel and get a work permit abroad, if something goes badly they are still under protection of the US government, etc.
This is due to the fact that USA are the most powerful country on Earth, and one of the reasons for that is its military power, which is very expensive.
So the US citizen residing somewhere else would still have to pay their share to be protected by their country.
Not saying that I completely agree but I think it's a valid reason.
Not the case. I have read that the most powerful passport in the world (as in, getting into countries visa free) is the British passport.
Additionally Americans, unlike citizens of other countries, get no protection from their host government. If they get evacuated from a disaster zone they get charged for the costs. And as everything the US Gov does is horrendously price inflated, there are cases of people getting "rescued" and then wishing they'd been left behind after being served with massive bills.
The way the USA taxes citizens abroad is indefensible. There's literally not one single defence for it.
(btw: there are two different Mike Hearn's posting in this thread! I am the other one)
Citation please? The only thing I've ever heard of even remotely close to this ate the occasional local search and rescue operations that are caused by poor judgement. That has nothing at all to do with the U.S. government.
The next time there's a disaster in almost any country - look around. That's a U.S. Navy carrier providing electricity for emergency relief. Those are U.S. Marines distributing rice, ponchos, and water. Those are U.S. Navy Corpsmen delivering first aid to the wounded.
As bad as people like to make this country out to be, we are the first ones there with the biggest shovel any time another country needs to be dug out.
Click the "Will the U.S. government pay for my travel? How much will it cost?" section.
As bad as people like to make this country out to be, we are the first ones there with the biggest shovel any time another country needs to be dug out.
It's not so. Go look at Yemen. The Chinese, Indians and Pakistanis evac'd their citizens when the war started. The USA left theirs to rot.
http://www.theguardian.com/world/2015/apr/01/american-civili...
It's also about structuring earnings so that they happen to be earned abroad.
If an entity pays for an Apple product or service in the US, Apple has earned an income. This income is without doubt subject to taxes in the US. As far as I know Apple does pay US taxes on these monies. Do we agree this far?
I don't see why we can fault Apple for not repatriating income it earned abroad. They can do as they please with it as long as they don't bring it back in the US. I'm not saying they shouldn't pay a tax if/when they bring it back. I am just saying we should not demonize them for not bringing it back.
America invented the transistor and Internet with tax money, plus educated most of the engineers who built those products up to grade 12. But everyone acts like it'd be some moral tragedy for Apple to pay taxes back into that system. It's disgusting. Our society has been overrun by MBAs. Nobody thought like this 30 years ago.
Also you completely ignored my actual point about the flexibility of where money was 'earned' if you have good accountants.
Buybacks and dividends are post-tax expenses.
Paying royalties is an expense that comes before taxes. If they bring $500MM over and pay it as royalties, they would pay no taxes on it.
Maybe they could do a Kickstarter campaign?
Is this a dick move from Apple? Sure. But the day I'll be arguing on behalf of music labels and distributors is the day the hell freezes over. Their situation is entirely of their own making.
This circumstance, in which Apple essentially pre-installs the service on every device and subsequently offers it for free, isn't so different from 1990s Microsoft bundling IE with Windows to undercut Netscape.
> just not paying the content producers
Someone somewhere invested an absolute shit-ton of cash in getting Ms Swift famous, producing her records, promoting her concerts, payola, etc, with absolutely no promise of return.
So, presumably, the labels have decided that offering their content for free to Apple for 3 months will result in more revenue in the future, just as Apple has. Surely any artist understands the idea of giving away their music in order to build a paying fan base in the future.
Ultimately, any artists who lose a significant chunk of income due to these 3-month trials and never see increased income after the trials should be upset with their label's failure to represent them well.
Then again, isn't that to be expected as an artist? Your label encourages you to give CDs away, or tour at a loss, and sometimes it pays off and sometimes it doesn't? Isn't this the same idea? It sounds to me like a worthwhile risk. How many people were going to buy your debut album or come see a show and choose not to because they used their iTunes streaming account? Versus how many people easily stream (and pay for) you music 3 months later because they got hooked on iTunes streaming?
Another problem is Apple is threatening removal from the iTunes music store for nonparticipants. So it's not just that labels think they can make more money in the future if they agree, Apple is threatening to cut off their sales right now if they don't agree.
Another problem is that this is the same Apple that is pressuring record labels to cut off the free tier on Spotify, which labels get compensated for at the same rate as paid streams, because it "devalues the music." As if this doesn't.
Apple has a dominant market position in high-end smartphones (they make 90% of all smartphone profits) and they are using this to leverage other markets in ways that make Steve Ballmer look like Winnie the Pooh. They already tried to engage in ebook price fixing, now they are trying to bully Spotify out of existence.
I think anyone can agree that Apple is being shitty by not paying for something they're making money on, the people who are directly responsible for not compensating the artists are, rather conspicuously, left out of this rant.
How are they making money on the free trial, during the trial?
AOL for example printed and gave away for free, millions of CDs with free dialup access, spending as much as $35 on SAC (Subscriber Acquisition Cost) [1]:
> How much did it cost AOL to distribute all those CDs back in the 1990s?
>
> Steve Case, co-founder and former chief executive officer and chairman of America Online:
>
> At that time I believe the average subscriber life was about 25 months and revenue was about $350 so we spent about $35 to acquire subscribers. As we were able to lower the cost of disks/trial/etc we were able to ramp up marketing. (Plus, we knew Microsoft was coming and it was never going to be easier or cheaper to get market share.) When we went public in 1992 we had less than 200,000 subscribers; a decade later the number was in the 25 million range. That helped drive our market capitalization up from $70 million at the time of the IPO to $150 billion when we decided to combine with Time Warner to accelerate our transition to broadband and diversify our revenue mix.
[1]: http://www.quora.com/How-much-did-it-cost-AOL-to-distribute-all-those-CDs-back-in-the-1990sApple AND the music industry are losing money during the 3 months, but they both stand to gain money after that. Apple has invested a lot of money in creating the service and running it for free for the trial period.
We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.
She said she supports herself on tours, five more music away, you should get more people at her tours. Same for the new band, you don't get discovered on the radio, 5K and they will play your song, it's that easy. Never works.
Play shows for 5 - 10 years, you may make it, or be coached and molded like Taylor, that Canadian Kid, and the ret of them.
But I think she is very right to refuse to pay for a scheme that is supposed to increase Apple's market share and not hers.
The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free.
Besides this is based on a "physical product" model of economics and tries to apply it to digital goods. It doesn't relate that well. In an era when tons of people works in stuff that can be "copied for free", there are other models that should be applied (e.g. that you should still pay for the free-to-produce copy).
Absolutely, but that is fixed cost not unit cost. Not recouping fixed costs is bad. But losing money on top of that for every unit you give away is even worse.
The distinction matters just as much as in the past because our economies have not just become more digital, they are also more service oriented than before, and services often do have unit costs. A better analogy to giving away iPhones would be to play a live gig for free.
Isn't your unit cost = Cost of Goods Sold / Units Sold?
Wouldn't the fixed cost producing the music be amortized (over some arbitrary number of years) into the Cost of Goods Sold to produce an accurate picture of unit cost?
> A better analogy to giving away iPhones would be to play a live gig for free.
Or how about this analogy: 3 months of free wireless service with every iPhone?
What to the top artists represent in terms of percentage of sales? It's probably more than 90 percent of the sales from less than 10% of the artists. For them, your argument is probably true.
I would imagine it takes significantly longer for independent artists, especially niche artists, to recover their fixed costs, especially since music sales are basically a popularity contest.
Does anyone know how other companies like Spotify, Rhapsody, Google play and others treat the trial period?
Taylor Swift has probably personally received more than a dozen free iPhones. Even lesser-known celebrities receive multiple copies of all the latest electronics, and just regift them because they have so many.
When she wanted to upgrade to the 6, she most likely did not go to the store and pay for it.
Celebrities that big just receive free stuff shipped to their front door all the time. TVs, electronics, clothes, jewelry, luxury brands.
Apple's deal obviously makes sense for the artist otherwise the major labels would not have signed up, full stop.
What then are these independent's doing? I'd suggest since there is no money at stake in the first 3 months they are holding out to pressure for slightly better terms (and a couple headlines never hurt sales) and then will jump on in 3 months once the money is actually flowing.
You'll note that there will always be many people in the 3 month free trial, Swift isn't threatening to hold her album out forever (or her other music!) to stop the supposed bad business model, just for the 3 launch months when guaranteed revenue zero.
Kudos to these artists for knowing where their leverage is and using it though!
Apple has a couple options:
(1) just eat it, prolly what happens.
(2) they can pay up a bit but the big labels would be steamed at getting a worse deal than independents so that isn't happening.
(3) pay everyone a little bit more for the launch months. This might happen but the clock is ticking.
(4) they can make these artists sit out longer than the initial 3 months. That compromises the quality of their service though. Still they might do it, hoping it would pressure them to signing up for the release.
(5) they could weight the streaming for awhile so that holdout artists appear less than they might normally. I expect this might happen but if they do this hopefully be done openly ("we're rewarding our launch partners").
(6) go back in time and do a 3 month beta rollout so money is at stake when you do the big rollout with the new phone.
The independents on the other hand don't have this luxury.
It's very simple. The biggest portion of a records sales are going to come int he month or two after release, after the big marketing push. If an indie releases a record during those 3 months they are going to lose a ton of potential revenue. For a small record label that can be terminal. They're running on fumes they can't take the hit like the majors.
I also take issue with characterizing streaming income as a "ton of revenue" (perhaps you meant actual sales sales in which case somewhat irrelevent here?) while everything I've heard over the years is how streaming revenue is a small fraction of artist revenue, especially independents.
Here's numbers from a pro-spotify independent artist [1]:
$1,359 from spotify, that's apparently a career to date number.
http://www.popmatters.com/feature/193667-why-its-time-to-sto...
This is a big business asking the "little people" to work for free. Completely unfair.
Alternatively, a two-track system, where subscription services are consistently behind on popular hits, and artists hit record services first.
I would argue that supporting the arts is important the same way that protecting minimum wage workers from abuse is (mandatory unpaid overtime, wage theft, etc).
> ... just like the innovators and creators at Apple are pioneering in their field
> ... we admire and respect Apple so much.
> I think that is beautiful progress. We know how astronomically successful Apple has been...
> I say this with love, reverence, and admiration for everything else Apple has done.
Taylor's post reminds me strongly of this article by Eli Schiff:
"Wilcox's flattery is not accidental. It was essential that Wilcox mentioned his qualification as an Apple fanatic, because that is, of course, the pre-requisite for saying anything remotely unfavorable about Apple."
1) If you're an indie artist and you can afford to opt-out of Apple Music on principle, then clearly you can afford to opt-in for the three free months. Either way you're not making money from Apple Music. If you opt-in, you make more money in the long-term. If you opt-out, you continue to earn from your current streaming and downloads.
2) If you think that Apple Music will be so earth-shatteringly successful from day one that it will destroy your business -- then your business model is razor thin and completely unsustainable.
http://www.theregister.co.uk/2015/06/16/apple_nopayforplays_...
Apple developed the software, is footing the server, power, bandwidth, and ops bills for three months all for free. The labels are chipping in their content for three months.
Sounds like everyone is bringing something to the table. Apple is incurring real costs. The labels, not so much.
Three kinds of customers will try the service:
People who buy their music: these will either become long term subscribers or not like the service and buy the songs they want anyway. Perhaps slightly delayed.
People who currently freeload: no loss for the trial. Possible huge win if they subscribe.
People using another streaming service: this is where the labels might actually give something. If a customer cancels their existing service while trying Apple's that will reduce the label's take by up to ~25% for the year. Month alignment and a comparison period will both drop this.
I suspect the third category is not the target audience. A small loss on service switchers is worth the big win for the labels in converting freeloaders to customers.
Apple built a service that wouldn't exist without the content. The content would still exist on other services without Apple though.
no one is arguing that their costs don't exist, but that they have nothing to lose to put it on. It's not like the artist will somehow have a lower cost by _not_ putting it up.
You have zero evidence of this. We don't know and may not know for a number of years whether Apple Music is more profitable for artists (or not) than competitor services.
Apple is placing the value of artists work at $0 in a bid gain market share. It should be them who incurs the full cost not the artist.
When the music is offered on free, the prime beneficiary is Apple.
It's really weird that you specify "developing the software" as a real cost, but not "developing the music".
By your logic everyone should support The Pirate Bay because they developed the software and they foot the server bill to distribute content.
Except first features downloading and owning it and the other streaming rights through certain period of time.
In the creation of Apple Music, Apple didn't not require any musician to create more music. Apple did have to develop their delivery system.
Apple does not require any music owner to put their music in Apple Music. But if a music owner does want to be included, then when Apple isn't paid, the music owner doesn't get paid. When Apple isn't paid the music owner does not have to chip in on the operations costs, that's nice of them.
Stated a different way, during the promotional period which the music owner agrees to, to promote their music in what they believe will be a profit making venture, Apple will pay all of the distribution costs out of their own pockets.
About Pirate Bay (which I didn't really want to comment on, but HN won't let me edit the grand parent) The content owner's, by and large, did not agree to put their material on Pirate Bay. If the content owner's did, I'd use Pirate Bay all the time and pay for the privilege. Instead I have to wander the balkanized world of video content looking for which of the four services I subscribe to might have the video I want to watch. It is a terrible solution and should burn in fire, but we are stuck there for now.
Of course they do. No music, no product.
I think they'll get a pretty large amount of trial users simply by advertising it in iTunes - oh you're about to buy this album? Why don't you listen to it and the majority of our catalog free for three months instead?
Other than Android they have a lot of music use cases supported, free of charge - why would you buy?
I honestly don't know how much this will affect sales but Apple are certainly in a position to push users away from those sales and toward the free service.
I think it was Eddy Cue who said specifically in an interview that they will not do this.
Edit: from the Guardian
He also denies a recent report that Apple is planning to aggressively promote its new streaming service to people buying albums on the iTunes Store. “That’s the wrong way to look at it. You shouldn’t take a customer who’s buying an album, who’s happy buying an album, and try to tell them that what they’re doing is wrong,” he says.
“But we don’t have to, and we shouldn’t try to kill the iTunes Store or kill people that are buying music. If you’re happy buying a few albums a year and that’s the way you’d like to continue doing it … but if we can help you discover some new artists or some new albums through Connect or through listening to Beats 1 radio, great.”
A band will put in a long time creating an album: writing the songs, orchestrating, rehearsing, reworking, etc. Then they pay real money for recording, editing and mastering as well as paying an artist and photographer to create the album art. They're also creating marketing materials online and off. This is all for a usually small time period when a new album will sell. And when streaming (which generally makes them next to nothing) will hit its peak. All these costs are front loaded and then there's a usually short time period where the band hopes to make this money back. During this time, the band is spending additional money and time doing marketing and promotion as well.
Apple's deal is a raw one for these artists as they'll lose a good chunk of revenue during that small time period. And it will leech purchases away from iTunes as well. I can guarantee that Apple will have prominent notices within iTunes about which albums are available on Apple Music and suggest that would-be purchasers sign up.
Plus there's the fact that Apple is threatening independent artists with removal from iTunes if they don't agree to stream for free on Apple Music. And the fact that these artists can't just decide to sell the music themselves on their website to iOS users because, thanks to Apple's carefully-designed walled garden, iOS users can't download music from the web or 3rd party apps and add it to their music library like they can on Android.
Wrong. Apple has unequivocally stated that this isn't happening.
> iOS users can't download music from the web
Wrong. You can just add it using iTunes.
A couple different independent artists online have stated that Apple told them this.
> Wrong. You can just add it using iTunes.
Did you purposely take my quote out of context to make your answer seem correct? I specifically said that iOS users can't download a song from the web or a 3rd party app and add it to their music library like they can on Android. On Android, I can download a song while out on the go from anywhere I want and add it to my music library. Every app can add music, every app can play music. Can you do that on iOS... or do you have to go back to your home computer, add the song to your computer, add it to your iTunes library and then sync it to your iPhone/iPad? The last time I helped a friend do this, this is what we had to do.
Well I am far more likely to take the measured, legally considered statement from Apple over a single independent artist's Twitter posts. Apple would be in a for a world of hurt if they deliberately mislead people.
> Did you purposely take my quote out of context
No. I am an iOS user and half my music collection is from the web. It is completely legitimate to use iTunes to add it to your collection. Otherwise third party apps exist which allow you to download from the mobile web. I am not saying it isn't as flexible as Android but it is disingenuous to say it isn't possible.
Considering the way Apple lied... ehem... misspoke? misled people?... about ebooks, lying about music isn't that far fetched.
> No. I am an iOS user and half my music collection is from the web. It is completely legitimate to use iTunes to add it to your collection. Otherwise third party apps exist which allow you to download from the mobile web. I am not saying it isn't as flexible as Android but it is disingenuous to say it isn't possible.
So, as I said, it is impossible for an iOS user to just download a song and add it to their music library on the go. It would be technically easy for Apple to enable this, but they purposely disallow this to make it harder for customers to purchase from 3rd parties. The same way they won't let 3rd parties sell music within their apps without paying 30% to Apple (making it financially impossible).
Having to go all the way home, add your music to iTunes, plug your phone into your computer, and then sync to iTunes just to be able to add a single MP3 to your phone's music library may be "legitimate" but it's anything but reasonable. It's in this state solely to make it inconvenient to the user and push them into the open arms of iTunes.
30 years playing in and recording with independent bands. Dong just fine on understanding up front investments.
Apologies, then. Though I am curious about your take on this... specifically why it differs from my other friends. All of my independent musician friends I know online and off think this is a raw deal as soon as they learn the details. I understand why it makes sense for the big labels (they don't care about artists' incomes and likely got a sweet payoff from Apple). But I'm curious why a smaller musician/music producer would be happy with it.
Enter MP3 and suddenly musicians are looking at a hostile world where their primary consuming demographic believes it is silly to pay for music at all. Bands have traditionally felt screwed by labels, now their customers are screwing them. Apple sets up a service where the labels contribution to the free trial period results in no revenue for bands and that's the distributor screwing them. That makes it pretty much the entire industry top to bottom.
I don't see it that way. Apple Music will likely tap a huge population that doesn't currently have a streaming service which is a great thing.
As far as "losing" micropayments from song plays during the trial… If someone is forced to listen to my song by their robot DJ and doesn't care enough to come see a concert or buy something, or listen to it in the future… that wasn't really a sale I missed out on. That was some poor schmuck that wasted 4 minutes of his listening time on my song and in some alternate economic system would have paid me for the privilege, but didn't.
Also: I'm eating in August no matter how this plays out.
There's another point being overlooked regarding how music is consumed: music is listened to repeatedly over months, and the free trial is no different than a promotional period. Artists, even indies, will still receive income from the myriad other services, and will soon receive a better rate from Apple. Distribution is an enormous service to the artists, and it's value shouldn't be overlooked.
That being said Taylor Swift has every right to pass on Apple's offer, and it's great for the recording industry to have a major check/balance like Swift.
Unrelated, but interested to see if artists will ever abandon the labels and go direct to distribution. I'm sure labels provide more value than people want to acknowledge.
Edit: formatting
If that's not the primary motivation, I can think of two alternatives:
1. Apple lacks confidence in rolling this out - they don't even know if they'd make back their money using a loss leader of this magnitude. They don't feel that the service alone has any meaningful advantage over the competition, so they feel a need to compensate with an extraordinarily long trial period, and they're willing to abuse some of their market power to strong-arm content producers into (hopefully) covering the bill. As a tiny part of their overall business strategy, they are unwilling to make any large bets on it, regardless of their ability to cover a loss.
- or -
2. (probably more likely) Apple is so myopically over-confident that they believe this service will disrupt the music industry in the same way the App Store changed software distribution. They honestly feel that they are creating a new market here, not trying to steal market share from other streaming services. Consequently, they don't feel a need to justify covering any expense to content producers because in Apple's mind, content producers will give anything for the privilege of existing on Apple's revolutionary new service. This would represent a new opportunity for revenue above and beyond what the music industry has already come to expect.
Also keep in mind that parents may be willing to spend $.99 here and there for their kids' apps (which adds up fast, but not in a way that feels obvious), whereas few will be happy to sign up for a recurring subscription without at least weighing it against the well-known competition.
Honestly, $10 a month to use every app sounds pretty good for me, bad for developers.
You're suggesting a simple view where you look at the average amount people who subscribe to this (e.g. $10/month) service would have otherwise paid, and that if that number is less than $10/month the devs (/musicians) win. This is certainly true.
However, there's the additional benefit that not every user that subscribes will entirely drop their purchasing habits. Perhaps less often, but some subscribers will buy apps (/music) on top of their subscription.
Apple is a super secret walled garden, full of itself. From my experience with people that work there, I doubt any of them would even know why (let alone come out here to explain).
'As someone that knows people who've worked at Apple, I doubt many of them would know the answer to this or be allowed to post here if they did.'
(1) They bring an enormous number of new subscribers and that this 3 month trial maximizes revenue for everyone including the artist.
(2) they pay a slightly higher royaly share than spotify in part because of this longer trial.
(3) Apple shares revenue with the artist in the same 70/30 split we see elsewhere and the 30% is the finders fee they get for delivering many of their x hundred million users to the service. Since there's no revenue in the first 3 months, 70% of $0 is $0. Apple eats the bandwidth/server costs of the service in this time with no revenue coming in.
(4) Spotify paid users are fairly happy with that service and won't all switch to Apple Music overnight and the same with people who buy music and radio so it's not like all the money these artist's see turns off for 3 months. The free trial effect will be heavily staggered as a steady stream of users signs up over years.
You were probably looking for formerly.
You give away a couple of months, get people hooked and you and reap years of recurring revenues. It's a model that works for drug dealers, razor blade makers (Gilette gives away 5 packs of blades in many schools) and SaaS companies.
I don't really feel too bad for Taylor Swift. She doesn't get a dime from radio airplay as an artist. But she benefits immensely from the marketing and promotional value of having it played.
Internet radio is different, as it's not considered to be a public performance.
If software developers were compensated for their creative output the way musicians are there wouldn't be so many software developers.
I had a really innovative startup idea once where I planned to have developers work for years to create hit software products that made many people's life better and then get into a crappy van and travel the country to do 90 minute demos of their product for a few hundred dollars.
But only if they had a genuinely successful product mind you, obviously being merely competent at software development meant you didn't get paid at all, you had to actually amass significant numbers of fans of your products willing to come to these demos.
Never did figure out why I didn't get more developers interested in the platform.
The music industry has been dying for a while but this really is a fantastic example of it. Everyone who thought Apple cared about artists now has to come up with a new rationalisation.
> This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt.
What they are really doing here is asking the other side of the partnership to participate in the loss leader effort. Apple provides the platform development + storage and delivery infrastructure, the artists provide the content.
When you consider it as a partnership it doesn't seem so reprehensible, they are both forgoing income to secure future recurring income.
I think what people are upset about is the fact Apple has a big war chest when many artists do not. Fundamentally this isn't really Apple's fault though, likely this deal was brokered by their biggest partners - huge record labels. Huge record labels also have big war chests and are probably fine with the arrangement.
It makes good business sense if you are a record label or Apple, less so if you are an independent artist but maybe not no sense at all, I don't know what exposure is worth.
Unfortunately Apple can't create a 2 tier system where they have the big record labels foot the cost of the indie artists nor can their ignore the obvious good business sense of the loss leader approach.
https://junction10.wordpress.com/2015/06/21/those-in-glass-h...
It was the same situation with Metallica and Napster. They got the majority of the money from their record sales. Most artists are just interested in the massive distribution these platforms offer, so when a relatively small act shows up in your town you might have heard of them. The live show is were most acts make any money anyway.
Many years ago, I recorded a number of albums with different bands. On average, for every $10 album sold, I would get 10 cents, paid to me after the label recoups costs. When you aren't Taylor Swift, that is the deal most artist are offered through a record label.
Are you sure? Because Apple are promising to pay higher royalties. That sure seems like not nothing to me. Now, I pass no judgement on whether the financial calculus works out for 3 months of free usage, but to be honest saying there's "nothing to gain" is being dishonest.
So, Apple should pay for it, rather than attempting to enforce themselves as a middleman who takes only profit as they have done in every other sphere.
Making Apple's revenue be directly tied to artist revenue makes a lot of sense.
How? The trials would still be free. Nothing would change for the consumer, therefore you couldn't argue that.
If Apple doesn't pay the artists for the trial, then they run the trial and get $5M extra profit. The artists get $5M extra profit. The audience gets more music. Everyone wins.
If Apple pays the artists for the trial, they see that it will cost them $10M licensing to get back a mere $5M. They don't run the trial. Nobody wins.
Edit: fixed the numbers
Their competitors win. The artists make out the same or better. Apple isn't the only player on the market, even though they act that way.
There's a difference between not charging the end user and not paying the supplier.
Scum.
Likewise, any lead Apple gets here is shared with the artists.
This is rude to force on artists without asking, but only because they're not asking. It's not scummy.
For anyone who doesn't know, a loss leader is something advertised like bread for 50 cents or something, where the store loses money on each and every sale. It's a customer acquisition cost, and the goal of this is to "lead" with the loss, get people in the store, and there they will buy not only bread but anything else they need at the time, at normal market prices. Normal market prices give enough profit to offset the loss taken on the "lead." This works because people don't just go to a store and buy the one marked-down item and nothing else. (Or more specifically the extra profit for people who buy other things after only coming in due to the loss leader, covers the loss on them, and on everyone who only gets the loss leader.)
The strategy itself is to sell something at a loss, to get a lead/marketshare/conversion.
define: loss leader
Because Apple will not allow her to do so. It is not 3 universal calendar month: every user gets 3 months free when they start a subscription, depending on when they sign up for the service. Artist cannot opt-out of the free-service tier catalog and just go with the paid users.
So Taylor Swift is withholding her music because she won't get paid for all the listens by users in their first 3 months.
For those who want to get paid from the start, their work will only be available to paying customers.
I don't see this is a major change to be made by Apple, and it is a win-win.
(Still of course I agree that they should cover the cost not artists)
I guess that would explain why her 1989 album isn't there either... At least she's consistent.
I'd lean on the side of Apple eating the cost during the period, not the artists.
For every Taylor Swift there are thousands of artists just scraping by (and thousands more hoping to reach "just scraping by.")
I lose a decent amount of respect for Apple with this call. (And Taylor Swift is hardly the first artist to express disappointment and/or outrage at this "decision" by Apple.)
I imagine there are a fair chunk of artists who would take the premium only route if they could too - I guess they want to avoid that.
[0] http://www.theguardian.com/technology/2015/jan/12/spotify-60...
Apps that are "beta", "demo", "trial", or "test" versions will
be rejected
Funny, her best line and I would wager she hasn't paid for an iPhone or any consumer electronics (or any branded good for that matter) in years if ever given her family history. I find her use of the royal "we" arrogant.
I really do not understand the issue. What Apple is creating is a unified platform for exposure to music and musicians not just a streaming music service. With Connect artists take their fans into their lifestyle and the creative process to gain traction / engagement.
A "free trial" is exactly the kind of thing that would induce consumers to use it away from the hodgepodge networks out there now, all of which Swift, Inc seems to use exorbitantly to prop up her brand (web, mobile app, fb, twitter, instagram, tumblr, vine, ....) but which is next to impossible for an indie artist to maintain on his/her own.
I can understand why the economic return on her investment in Apple Music may not be in Swift Inc's best interest but not the community she is appointing herself to represent.
Seems like a no-brainer to me and also an opportunity for someone here to create some tools to create and maintain a presence on Connect for artists ready to go with content when it launches.
On one hand, the music industry tries to get higher revenue on every front but then agrees to something that has essentially one goal in mind, to kill off any competitive streaming market, which will eventually lead to them being solely dependent on Apple. Interestingly enough, all major labels have stake in Spotify (not sure about the exact number but around 20-30% in total). Why do they now apply different rules, I don't know.
Unless of course Apple demanded not to pay any royalties, in which case the music industry is really hopeless (again). The cry for "we love you Apple but pretty please, we gave you all our music, would you mind paying us" just confirms that. They feel being robbed in an era for which they've been long overdue with a business model, don't know what to do, and look up to big brother to save them.
I love Apple's products, their marketing is brilliant, and they cleverly use all their power to make the most money out of anything. But they're getting more and more hungry and arrogant every year. Microsoft, anyone?
So Taylor Swift's plead is pathetic, "Thankfully... I can support myself," deceiving "by playing shows" [1] and even condescending, "This is about the young songwriter who just got his or her first cut... who works tirelessly." Oh, come on!
You don't agree with the terms of the deal, so you pulled out. Fine. Now your fans who are going to try this new service won't have access to your latest album. That's the price of your decision. To me that's fair game, show a little muscle to your distributors, maybe get a better deal. Now, please don't try to spin this as some social injustice towards creative people. Just because you're an artist it doesn't mean you're immune to market laws. Taylor Swift is a billion-dollar business. Stop treating music fans like we're stupid.
[1] "Swift had sold over 40 million albums, 130 million single downloads and was one of the top five music artists with the highest worldwide digital sales" -- http://www.ifpi.org/news/Taylor-Swift-named-IFPI-global-reco...
a) it was a service first of its kind in a non-crowded space
and
b) some types of IP in this sector is time sensitive (airplay on pop hits is measured in months after launch and drops off, like games)
c) apple is loaded with cash
I get why you think that way, because most celebrities do indeed hire PR firms and assistants to handle their fan relationships. Ms. Swift is unique in the fact that she doesn't, and it's documented well enough that even a non-fan like me knows about it. I wouldn't have said what I did above if I didn't know it to be true.
[1] http://www.businessinsider.com/taylor-swift-is-a-business-ge...
I mean I'm sure she's great, but she's also a brand and a business in her own right. Stuff like this is too important to let an artist just go off and say whatever she feels.
As compared with whom? Ariana Grande? Metallica? Madonna? Jello Biafra? Efrim Menuck? Nicki Minaj?
Sure, she's probably market-positioned as "more authentic" than Paris Hilton. You shouldn't be blinded by the marketing any more than you should believe Iron Maiden to be devil-worshippers.
> intelligent and articulate.
Which usually translates to "White, non-Southern American accent". ("British" also applies, but usually to men.)
(it's not War and Peace FFS, it's not even written at a college level. Why are people surprised or even impressed by basic literacy?)
I think at the end of the day (or end of 3 months) more people will have subscribed to Apple Music then before and the artist will be making more money.
Personally i think the real winners are the record labels who seem to get the lions share of the money.
Also when Goole Music was released it was free for a limited time... did they pay artist/record labels?
If Apple is trying to shift to a user-subscription model and pay the labels (ultimately, artists) net-90, that's great, however it's obvious to anyone who's run a bootstrapped business that an unforeseen, 90 day break in cash flow can be an unrecoverable setback.
Not for big labels. They can weather the storm (though precedent dictates they'll pass as much of this cost on to their artists as legally possible).
The financial situation of end content creators and smaller studios is far more variable. Some will be fine. Others (especially those with content scheduled for release within this 3-month window) could be completely overwhelmed. This simply consolidates more market power into the hands of currently-large labels, and generates ill will toward Apple elsewhere.
Why would a company that seems to want to attract self-publishers into its walled garden not find a structured solution to bridge the gap?
I'm all for forcing artists to stream their music (I'm looking at you, Taylor Swift), because I see how that can ultimately make everyone more money.
Arbitrarily disrupting cash flow, though, in order to run an experiment and offload your acquisition costs is a pretty offensive, and surprising move by a company with hundreds of billions in fungible assets.
[1] https://twitter.com/antonnewcombe/status/611122009007882240
I suspect that Apple knows that the take up for the three month free trial will be huge, but that conversion to paid will be a much harder row to hoe.
This is all about Apple not wanting to foot the bill if and when people switch back to what they were doing already (Spotify, YouTube) without paying Apple a dime.
Eh. Apple Music is mediocre and that's ok.
It's instantly going to be the default music player on hundreds of millions of iPhones overnight. At worst, they're going to get the same usage as Spotify.
Apple pushing the labels to nix Spotify's freemium tier was no accident. Mediocre service + paid + Apple brand = no longer good enough.
a) Siri. With the existing Music app I can tell Siri to play a particular artist or playlist. I would expect far deeper integration.
b) Watch. The Music app is native, has a glance.
c) Desktop. Spotify client on the desktop is slow and clunky. iTunes on the Mac is anything but.
On another note, Apple have a pretty good story with Airplay - does Spotify on iOS support that fully? On Android they don't support Chromecast and I've always thought that was an advantage of Play Music over Spotify - maybe there's an analogous situation on iOS?
On the other hand, Spotify has its own streaming protocol which is supported by a few player/speaker brands (e.g. Gramofon).
a) and c) are only relevant to Apple users. Spotify pretty much runs everywhere.
b) Watch for many is just a gimmick. This is really weak.
That's what distinguishes Taylor Swift from 95 percent of acts who maybe negotiate a little thing here and there, but are mostly happy to get signed.
No, she's signed with an indie label called Big Machine Records. Big Machine Records has a distribution deal with Universal.
I guess this is also a reflection of the lack of political will for antitrust action. In my view, Apple has long been on thin ground with regards tying but there seems to be a lack of political will to use competition law.
It's almost certainly not in Apple's interest to cannibalize their existing iTunes sales for the streaming service.
Intellectual property wasn't a thing for most of human history. If you performed a song in public, anyone who heard it could write it down and perform it or do whatever they wanted to do with it. If you released something to the public, it belonged to the public, and legally that was that. And art still happened. Great art.
The idea that whoever made something owns it (and I really think it's absurd to own an idea) means that everyone else loses out. And I don't see how that can be good, even for the owner.
We do not think that software engineers should be prohibited from charging for copies of their software: neither do we think that musicians should be prohibited for getting paid for their music.
Yes, people will continue to make art for free, because they love doing it. No, that has nothing to do with whether people are (implicitly) banned from charging for their art/labour if they want to.
Many consultants may in fact be paid once. But most developers work at companies for a salary. That salary is paid for by charging for software over and over. Without being able to charge multiple times for the same piece of software, there would be no Microsoft, IBM, or Oracle, no SaaS, and no App Store, just to name a few, and none of the jobs that come along.
>Without being able to charge multiple times for the same piece of software, there would be no Microsoft, IBM, or Oracle, no SaaS, and no App Store
Good riddance.
That's not very nice.
Who do you think owns SaaS businesses, or App Store apps, or downloadable software, etc.? I own a software company. If I couldn't resell my software over and over, I'd be homeless. If it couldn't sell software over and over, I'd have to fire all my employees (dev, customer support, marketing...) and shutter my business.
Do you think artists don't have employees? Is their music not their business? There's no difference between me owning software or an artist owning music.
Also, the companies you're saying "good riddance" to defined the world of selling software as a business and as a profession. You may think we'd be fine without them now, but not acknowledging the role they played is disingenuous at best - not to mention the literally hundreds of thousands of jobs they've created directly or indirectly.
I don't think you are being deceptive, but I suspect you are being facetious (hard tot ell in the internet). If you lived in a world where you couldn't resell your software, you'd have a different job that didn't depend on that. I imagine the people you provide value to would probably be willing to fund the development of the products they use. That is effectively what they are doing now, but they do it in a roundabout manner. If not all of them would(and there are game-theoretic reason why they probably shouldn't) maybe the ones that would could pay more, or maybe your product just wasn't worth so much to begin with (please don't take this as an affront to your product, I don't even know what it is).
Different property models lead to different viable businesses. I am saying I don't like the current model because it forbids certain endeavors I would love to see, and that we had before. Of course it would be harmful to some business plans that currently work. I just prefer the alternative.
It's not that I think this model is perfect, but consuming art was difficult at best, expensive for much of history, and for large swaths of time, reserved for the rich.
If the exchange for extremely cheap and ubiquitous consumability is a model where artists get further compensated, I'm fine with that.
What I believe is that we should have a system where everyone is free to distribute any form of media they have access to, and of any modifications he can make of that. Obviously, this would require a different form of compensation than the one we are using; if anyone can distribute, then charging for distribution is not a great idea. We should instead pay the produces for the act of producing (and the performers for the act of performing). This is not some crazy scheme by the way: this is exactly how we pay employees for software. We agree on a price for your skill, and pay you for as long as you excersize that skill.
Patreon and Kickstarter also work with similar models, compensating for the creative act before it is done (or directly afterwards).
Taylor Swift is a blowhard. I'm tired of her holier-than-thou rhetoric that she's just speaking up on half of other musicians. Yeah right...my bs detector is going bonkers. This is about Taylor Swift (and the idiots involved in the laughable TIDAL) maximizing her earnings, which is perfectly fine. But spare me the music industry's equivalent of "won't someone think of the children?!"
Taylor Swift can withhold her music from streaming services because she's a PHENOMENON who can still shift albums via iTunes (and even physically) because people want her music. Artists starting out don't have that luxury and, increasingly, their music won't get the listens if it's not on streaming services.
It strikes me as similar to the situation with people only buying games that are on Steam. Consumers love the convenience of a platform that is in many ways quite anti-creator. Tough one.
Did you read the post where she explains what is her goal for doing this? Here is the relevant part:
This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt. This is about the producer who works tirelessly to innovate and create, just like the innovators and creators at Apple are pioneering in their field…but will not get paid for a quarter of a year’s worth of plays on his or her songs.
Plenty of creators currently put their music on Soundcloud, Bandcamp, Youtube and more, and get exposure that way without getting paid.
The choice is really up to the artist. I do agree that Apple has the ability to pay artists during the 3-month trial, but should they have to? I don't know..
btw not saying I have the answer here, but as parent said, the current landscape doesn't really line up with her argument much.
Unless the artist (or representative) have given them permission to use their content for free, they should absolutely have to. It's the same IP laws that Apple like to use in their own defence: you can't just use someone else's stuff without their permission and without remuneration. What do you think Apple would do to me if I started selling an OS that used Apple's graphics set?
Just because some artists put their music on free media doesn't mean that a corporation can use that music as a loss-leader to sell their service.
That's how the music business has always worked. With a few exceptions labels take a loss on the startup costs of establishing new artists.
Most likely, it's a combination of all three possible explanations: some albums are from old deals she has no control over, others (1989) she wants to make more money on, and she's also disgusted with Apple's treatment of artists and taking a stand.
People don't need a single pure motivation for their actions to be legitimate.
Without wanting triggering an argument here...would you mind giving me a 3 sentence summary of what aspect of it is anti-creator?
Otherwise, I would also be genuinely curious to hear what problems developers have with Steam.
She is VERY in touch with its shape... And she is trying to change it. She also famously ditched Spotify and has been consistent in using her fame and leverage.
What she is doing is very important...Spotify is bankrupting artists while bleeding cash with no real business model to make the money back. She was outlasting them while the vc money ran out and it was working.... Now that Apple is in the game, the danger of them using their cash to bankrupt artists with a bad business almost indefinitely is very scary to artists. She is trying to be diplomatic while making a point.
Maybe there was some sort exclusivity thing but it doesn't make sense that artists would have to take it or leave it now.
Also, someone with her streaming numbers is basically the only kind of artist that would even care. Streaming royalties are really low unless you have really huge numbers so while she stands to potentially lose significant revenue in 3 months tons of artists won't.
Fascinating how Apple can make every cent of cash end up in their own register, but the people paying for this optimisation are the “partners” in the middle between Apple & the consumer.
expected negative value of bad pr = NPR
loss of customers from artists pulling songs = CUS
Cost of running PR Campaigns combating these stories = PR
Cost of paying artists for 3 month trial = TRIAL
Other forgotten costs = COSTS
If(NPR + CUS + PR) is greater than (TRIAL + COSTS) they should just pay the artists and make this go away. Obviously this is a very simplified example, but I wonder if Apple has done this sort of appraisal. I suspect they have.
If at the end, Apple/Google/Amazon/Microsoft replace the record labels and become the new overlords of music, then nothing much has changed, right?
I still don't get it. Today's music pretty much sucks, I mean the artists mostly didn't even make their own music, they just buy the text and everything. Most music of today costs way less than it costed years before and still isn't that great, it's just for the masses and yet artists are crying cause they get not enough? Huh 10 $ per month is a lot especially when you think about it, a normal person won't buy an album every month which costs nearly 10 $ per month.. Also why should an artist live with a single hit for his whole life? That makes no sense.
People in this business don't live in the reality, I mean more and more films happen to be on streaming platforms, yet a film costs way more to produce than music and still you pay the same price for netflix / amazon instant video / etc than for a music streaming service.
Also why does an album online costs as much as an album inside the store?? Thats way out of reality.
People should stop buying everything from labels, artists, just to show them what they do today is not funny anymore.
P.S.: And i don't get it why she has so many fans. Hell her music is way worse than a lot of pop music I listened so far. Why can't we have great artists today? Nobody remembers the good old days of The Who, Queen, Redbone, Blue Swede, etc.. Too bad what happens to music these days..
[ now picture me killing myself by slitting my throat with an Air ]
It's crazy how the industry leaders are so prevalent compared to the people they employ.
If it took me 6 months of no income to produce an album, then as I release it I go 3 months with no income (assuming that Apple is the only streaming service, and that people choose to stream instead of buy). By the time the 3 months are over, people have moved on to something else. This hurts me as I don't recover my expenses.
Taylor mentioned that she can support herself, team, etc. The unknown mostly can't, so the trial hurts them.
https://junction10.wordpress.com/2015/06/21/those-in-glass-h...
music clubs of 15 years ago didn't pay artists for your "12 free CDs" either
>Apple won’t pay music owners anything for the songs that are streamed during Apple Music’s three-month trial period, a bone of contention with music labels during negotiations for the new service. But Kondrk says Apple’s payouts are a few percentage points higher than the industry standard, in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial.
I wonder if all of these complaints would go away if Apple said they weren't going to offer higher payouts overall but would pay during the free-trial?
The fact is that Apple is paying for music during the free-trial, in higher and on-going payments.
1% is a hilariously small amount to push expectations on artists without even asking.
[0] http://www.theguardian.com/music/2015/jun/18/beggars-group-s...
But in any case, now artists have two large organizations worried about themselves between the artist and the consumer.
This is better, how?
And this isn't a "new" business opportunity. It's very likely many subscribers will come Spotify or Rdio or other service, so it isn't a full net plus. Revenue from other avenues will go down.
Does she really think that she works for every digital copy of a recording? Or that there is a relation between the work needed to produce a recording and the number of copies she sells?
Then when Taylor still refuses to let iTunes sell her music she'll be seen for what she really is.
revenues with computer games and movies are going up, revenue with music is going down.
the consumer does not value music that much, plus there is so much musical content which further depresses value.
the historic anomaly of high priced musical reproduction/media is over. back to normal.
Taylor is Swift; Swift is free; So Taylor is free too.
This feels very high and mighty of Apple. Hate to break it to you Apple but you are not changing the music industry like you did with iTunes. Streaming music services have been around for years. This isn't some revolutionary new product that artists just have to be on board with. There are other options.
I am starting to doubt that Taylor Swift really is as 'representative' as she wishes to portray, and not simply greedy, considering the extent to which she avoids non-profit-maximising revenue streams (e.g. Spotify).
Like someone running a business you mean?
And slightly off-topic, I fail to see how anyone could call any of this the complaints of a spoiled child even if she would flat out say "fuck you, pay me". Are you not allowed to ask for your dues if you're rich already?
Basically, she refuses to be ad-supported, or give her music away.
It is safe to assume that max. 10% of the subscribers will be in this 3 month trial. You will make money from the other 90%.
Also, just a little industry insight: Taylor makes $1.5m+ at each concert, plus travel, hotel, technical rider. I have a very hard time understanding all this cry baby talk.
Did you read the whole article?
And if that's true, then Apple should be taking the hit up front, not the artists.
Your last point is just irrelevant and unnecessary.
Yes, obviously a lot of people must be paid from that fee (crew, management, band...), but it is still shitload of cash.
That money pays a lot of other peoples salaries too. It takes a large staff to put on a tour for a performer of her size.