Apple's Indies
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elischiff.com
Apple is a $300 billion/yr company. They will not risk that revenue stream (which is largely based on their positive brand image) for a few points of margin on a product that will probably never be more than 0.01% of their revenue.
Kudos to Apple for recognizing that this is something they absolutely don't care about. The value of their brand is worth more than this. I just worry about the volume of new products coming out of Apple these days and wonder how much care and thought goes into them.
Anyway, it's not as if Apple and the labels have a cozy relationship -- so all's fair in love, war and contract negotiations. I'm sure Apple has plenty of other pricing / payment levers they can use to claw back most of what they're losing anyway (which probably isn't much at all).
I think you are painting her as more naive than she is. She’s been critical of streaming services in the past, I’m sure she (and her entourage/business partners) were following Apple’s announcement closely without the labels telling them anything.
Look at Apple's campaigns and you see well designed but generally very conservative creative direction that goes through so many reviews it dulls any edge.
They are risk averse enough they will finish multiple spots with the intent of choosing one (because they aren't 100% sold on creative direction) rather than risk reaching a deadline without having approved deliverables (the only account I've ever worked on that does this). This doubles and triples a campaign's production budget without any tangible benefit.
They will become even more conservative as they move more of their Ad creative in house.
The other evidence that goes against the 'hoax theory' is the fact that Taylor's 1989 album still will not be available on Apple Music at launch (from everything I've read). If they were designing this huge PR stunt wouldn't it end with Taylor agreeing to release her latest album on their service?
I think what we have now in tech in general is a long tail of products catering to different use cases. The Apple Watch is one of those -- and it's not for everyone. Apple realizes that, which is why their sales targets for the watch were pretty low by Apple standards. Will Apple sell 100 million watches? Probably not. You see this in a bunch of other areas as well; IoT, virtual reality, etc. None of the use cases is universal enough to rise to the level of a smartphone; but there's a big enough market to support innovation.
1. Apple didn't respond to a letter from Taylor swift in < 24 hours - this had been building for a week or two as large indie labels made their opinions public and let's not forget it's rumoured that Apple was having difficulty signing any indie labels. I would be shocked if Apple hadn't been considering this for weeks already.
2. App devs - of which I am one - get a decent deal. It's simple, clear cut, and quite high especially when compared with how things are in brick and mortar stores.
3. There is no comparison here anyway. When Apple TELLS developers that you can only have your apps on the store if you give up 3 months of revenue then there is one.
2. App devs get a decent deal, but restrictions like taking a cut of all purchases done through an app are very distasteful.
It might be distasteful, but it makes sense from a risk avoidance standpoint
The response was to taylor swift "and indie artists"
Apple made a new market, and is charging for access to it.
I believe that you're still free to sell your apps on Android or jailbroken iOS devices, direct over the internet.
Trying to compare jailbroken iOS devices to the pre-iOS days is nonsensical. You're limiting your userbase to those with both the technical know-how and the motivation to continually re-jailbreak their devices as Apple fights tooth and nail to prevent said jailbreaking.
Your argument re: jailbroken devices would be more relevant if iOS followed the Android model of "here's an app store, but you can check this box here if you're fine with the risks of installing things from outside of our app store". Until that happens, it's pure nonsense, as I'm sure you're already fully aware of.
There is value in the marketplace they've created. They've collected a lot of users and given them an easy way to pay. Their market is expensive to maintain - their rules mean that applications are safe enough to install without thinking twice. There is essentially no iOS malware.
It's somewhat like complaining about the right of console manufacturers to limit and profit from the software that runs on their platform. If you want different rules, use a different platform.
Is it ridiculous to limit your potential userbase to android users, or users savvy enough to jailbreak devices? That is not apple's problem, that is your problem.
One might wish for iOS policies to be different, but there is no intrinsic right for them to be different.
Yes, it is. So what? It's still crappy behavior and I can still complain about it. To paraphrase xkcd, this is almost the ultimate concession, where the best thing you can say about what they're doing is that it's not literally illegal.
Why should you get to take advantage of their work for free? You don't get to ship other closed-ecosystem software for free, like console games.
Historically, a third-party software ecosystem benefits everyone. Apple is trying to suppress that to the detriment of both their developers and their users, for their own gain.
The comparison with game consoles is ridiculous. I mean, it's accurate, but why would you bring that up? It's not like I approve of how they do it either.
I'd argue said "value" is artificial or inflated (inclusively), but whatever.
> It's somewhat like complaining about the right of console manufacturers to limit and profit from the software that runs on their platform.
Something which I do actually object to in a lot of circumstances, since it presents a significant barrier to entry for "indie" developers. Thankfully, though, at least game consoles' arbitrary restrictions are typically easier to permanently circumvent (though perhaps this is starting to change).
> If you want different rules, use a different platform.
And I do; I've been an Android user exclusively for the last few years after I got sick and tired of continually jailbreaking my iPhone just to install apps that Apple didn't approve of.
> Is it ridiculous to limit your potential userbase to android users, or users savvy enough to jailbreak devices?
I have no problem at all with the former. It's the latter that's absurd. At least in the former, one doesn't have to jump through seemingly-endless hoops to maintain a semblance of user choice.
> One might wish for iOS policies to be different, but there is no intrinsic right for them to be different.
You're right. There's also no intrinsic requirement for me to, say, let houseguests bring their own food for a party at my house. That doesn't make me any less of a dick for painstakingly inspecting and rejecting each individual platter and charging each food-bringer a $100 "food preparer fee" in order to serve said food at my party.
The walled garden is pretty and all, but all walls eventually crumble, and forests are way more fun anyway.
Care to explain further?
Yet the reply was addressing Taylor Swift personally. The fact that Apple replied to a letter by Swift in 24 hours does not change.
(Not to mention, the answer from Apple could be 'no' in both scenarios.)
1. App trial periods
2. Paid app upgrades
3. App Store search results that are actually relevant
4. Ability to respond to negative reviews
5. Mac App Store sand boxing that doesn't suck
Of course, there are many more issues but the primary problem is that Apple has addressed exactly zero of these issues and the App Store itself is virtually unchanged after 5+ years.
Edit: It's a common negotiation technique to add something that you know the other party will object to. Since there will always be push back it's good to have something you can sacrifice that you never really needed in the first place to appease the other side.
Simple supply and demand here - the demand side has to pay or otherwise they don't get in. Sure it sucks that the policies aren't very transparent and things are expensive, but them's the breaks.
Apple’s reverse in direction is interesting. Perhaps they feel the risk is not as high as they were expecting. Apple gets sued every day of the week, but something like this could be very costly. Perhaps they know the financial benefit outweighs the risk.
Claiming Apple doesn’t care about artists is absolutely ridiculous. Except for a few high-profile critics, artists view iTunes as saving the music business and allowing even small-time artists to make a living without needing to sign with a label (other than with one of the labels that specialize in this sort of thing and for which artists don’t need to qualify).
But, boy was it exciting at the start! Shed a few tears and move on...
trial versions without hacky in-app purchases;
paid upgrades;
actual working app discovery;
etc.
"Extorting money to fix their technical debt". Really?
Actually in-app-purchases quickly became the preffered monetization methods for tons of games and other apps (photo, office, etc), and made lots of developers lots of money.
As for "working app discovery" that's a pipe dream. There are > 1 million apps in the store. The developer has the responsibility for making it known and doing his marketing. Apple's Top Lists and Picks will always be cherry picking from a very small percentage.
As Rob Napier pointed out in a great blog post [1]: The app store sustainability problem is definitely not the sort of problem you can just throw money at, and thus can't be responded to by Apple with the same way.
Even in this article it is immediately apparent there is no consensus among the affected as to what the real problem is: Is it lack of free trials? Paid upgrades? Review times?
Thus it's probably going to take more than complaints to resolve them. It's going to take Apple engineers figuring out how to permit more power for good devs without creating holes for malware.
Apple is well aware of the shortcomings of the Mac App Store model, which is why they continue to provide an official, supported path for apps to be installed on Macs from outside of the App Store.
From a money standpoint, Taylor Swift is getting 1.5% more from Apple than App Store developers are...doesn't seem like that much to me. As far as I know, there is no "download and try it for 90 days" feature in the App Store.
Shocking news.
Apple's a big, powerful company, it's hard for one hand to know what the other hand is doing sometimes. All such companies have to rely on their customer base to guide them. If you think about it, Apple is far more responsive than most other companies their size or in their segment. Jobs used to answer emails ferchrissakes.
This is absolutely a correct statement, but not in the way the author intended. A writer writes, a painter paints, a musician performs. Not by choice but out of necessity.
- I have never seen the exact numbers but I assume a lot more people have a portable music player with them at all times (iPod then iPhone) than they did a decade ago. I can only speak anecdotally but I buy more music because I know I'll have it with me at all times than I did in the portable CD/tape days.
I use my iPhone for business and personal connectivity - taking calls, sharing webex, emails, SMS/imessages, etc.
Once in a while I listen to music. It's great. However, I see no reason why artists of that music should get a piece of Apple's pie here.
This argument has actually been used to tax blank CDs which is bull. Should we tax all parking lots when a game or Artists is playing near them? Taxing the ecosystem because some group determined their part of it is more important is foolish.
Apple has been shafting developers since at least 1987.
Actually Apple managed to make the iPod a huge success, and the iPhone for the first year too, without any apps. They built a market of billions without any apps. Only then did apps appeared with the first SDK.
Apple simply could not have a successful mobile platform without apps.
Now yes. In the start not.
Nobody is making money selling PCs without apps either. Are desktop app programmers demanding a pay cut from PC sales?
My point is, that they are and always have been assholes to devs, who they need.
Apple's behavior might change if the developers keeping it alive left for other ecosystems in sizable enough numbers. Unfortunately, that has yet to happen in the mobile space, so Apple continues to have no problem shafting mobile devs (the desktop space is a different story, however, since Apple is not dominant there except for very specific market segments, like hipster Ruby programmers and/or art students).
It's the same mechanism, isn't it? The iOS platform became attractive to buyers due to the HUGE investment on the part of developers who created free, freemium and paid apps for the platform. Apple has been using all of these apps in their marketing campaign since day one. The platform without apps is worthless. Ergo, the apps give them value and make them desirable.
And so, Apple created a slippery slope of an App Store model where just about the only way to have a shot is to give your work product away and hope to monetize it through paid upgrades or advertising. Failure on the App Store is the norm, not the exception. Yet, again, Apple still benefits from your free/mium app being there and they never pay you a dime for it.
Are there parallels between this and music? I think one could very well argue the case to be so.
The funny thing, it's everyone except Apple that gets a free ride from these discussions. First -- Apple is in fact offering a better deal to artists than pretty much anyone else. It's possible Amazon matches Apple in some cases -- as a book author, I know Amazon's "matching" of Apple's 70% is a sham (you only get it if you price your books low, lower than makes sense in many cases, otherwise your royalty is halved -- and even then they subtract "download fees" based on the size of your book from your 70% (or 35%)). When Apple entered the market, 70% was far and away the best deal in town. Since then it's only been exceeded by players trying to make a beach-head.
(Incidentally, Apple is going to pay the same percentage of its revenues to artists as everyone else -- but Apple Music has no free tier. In practice, Spotify and Pandora have minuscule revenues. 70% of almost nothing is nothing.)
A guy from Pandora chastising Apple for not being altruistic is simply disingenuous. Quoting that guy as an example of the industry being loath to criticize Apple for fear of ... something ... is even more dishonest. (Let's face it, at least part of the reason both Swift and the guy from Pandora couched their criticism in praise is that they aren't disinterested parties -- they're trying to make money too. Being nasty might just draw attention to the fact Taylor Swift is arguing for Apple to give her more money when they aren't collecting any. If a musician's agent or the record company has tickets to give away, do they pay for them? I doubt it.)
The bottom line argument is that Apple is offering a free trial loss leader and took the view that it would pay artists X% of what it collected, and X% of nothing is nothing. (A record label or hollywood studio would subtract accrued costs from future royalties, but hey who's counting?) Taylor Swift argues that Apple is taking more value away from the free trial than musicians -- she may be right, or it may be Ping all over again -- but she has a bazillion followers and she's Taylor Swift, so Apple immediately caves. (Hey, they named a programming language after her, what more could she want? j/k)
If you sell a CD through a record label, or a movie through a studio, or a game through a games company, you don't see royalties until production and marketing costs have been paid, and Hollywood and the Labels have become masters of padding their costs. For this reason, most artists use their albums as promotional tools for their live performances, and have done so since long before Apple.
His point, which I share, is not to chastise Apple "for not being altruistic" - it was that Apple tried to play the game with very different rules than most companies do. It's worth calling them out about it, especially because they are the Goliath.
BTW the direct quote is:
"Nothing here to suggest Apple treats artists more fairly than anyone else."
Apple was going to pay as well or better than everyone else (actually a touch more, but no big deal) before agreeing to pay royalties when it isn't collecting revenues.
And again, Apple has no free tier -- Pandora's free tier (95% of users) generates very little ad revenue and that's presumably where artists get their 46.5%. Spotify has over 25% paid users (and is losing money paying out 70% of revenues).
Here's a quote from a somewhat misleading blog post ranting about Pandora's royalties:
"Here’s an idea. Why doesn’t Pandora get off the couch and get an actual business model instead of asking for a handout from congress and artists?"
Apple created a sustainable model for musicians in the age of Napster/Limewire. Now it's trying to do something similar in the age of Spotify/Pandora, and it's doing it with a (potentially) sustainable business model that pays at least as well as anyone else. But until now it wasn't just giving money away.
Let's put it another way: Pandora, Spotify, et al are trying to build businesses by giving away stuff that isn't free, and have the temerity to complain when a company that has an actual business model (buy stuff for X and sell it for more than X) tries to compete with them.
Apple wasn't planning on doing that much, and now they are. So I think "nothing here to suggest Apple treats artists more fairly than anyone else" is an apt observation. Unless the details come to light, it's unclear if they're doing better or worse for artists than anyone.
Isn't that the big thing here? Apple is coming into a market where the established players are losing money and throwing around all their surplus cash from their hardware business to establish their own music service. Is this good for the artists in the short run? Maybe. Is it good for artists in the long run, if Apple manages to put all the other streaming services out of business? I'm not sure it is.
That said, everyone does this to some extent. It's a bit different from intentionally obliterating competitors with dumped products cross-funded from profitable businesses.
Pandora pays per play and effectively pays out 46.5% of revenues. Spotify pays out 70% of revenues and loses money. Apple is promising to pay ~71.5% of revenues. Just on that basis, Apple is paying more. (Spotify's 70% isn't worth much if it's not sustainable.)
Now, how Apple will pay for plays in the free trial period is probably by treating free trial users as though they are paying users for purposes of paying artists. I.e. they're paying for promotional tickets (which the labels do not do AFAIK -- that would be a marketing expense that comes out of your royalties). So they're still (probably?) not paying per play.
The point is, Apple was going to be 100% paid (aside from free trials), so that's a hugely better deal, and now the free trials are being paid out to musicians, which is the equivalent of a distributor eating marketing costs, something record labels, movie studios, and games companies never do.
I get your point about Apple Music being otherwise 100% paid and now eating the cost of a free trial, but the alternative was _artists_ eating the (opportunity) cost. That's not very nice, especially given that Apple can afford it.
Besides, holding up Apple against the behavior or record labels, movie studios, and game companies - that's a pretty low bar, honestly.
Totally true, no question. My point is being that all the other actors are worse.
BTW Spotify and Pandora "pay per spin" but Pandora's payment turns out to be pretty low, and Spotify's is calculated to add up to a fixed portion, so how it is really paying per spin? It's the radio stations that actually pay per spin, but they don't pay per listener, so that's also a joke.
> 2. Apple can pivot in less than a day.
I seriously doubt this happened. I think it's crazy to believe that Apple changed it minds due to this one blog post. More likely they had been planning this announcement for some time and possibly moved it up a little bit due to Taylor.
And perhaps build a new music app named 'Taylor' in Swift?
Maybe if they threatened to turn off IAP on Clash of Clans until Apple made the developer split more fair, then we'd get a response? But then again, this could be apples and oranges.