Apple and ‘boneheaded’ decisions

“So the meme playing out in the news media is that Apple, the $700 billion gorilla, was rapidly beaten down by a 25-year-old woman. Well, a woman who just happens to be a multimillionaire rock star and one of the most popular recording artists of the day. But still,” Gene Steinberg writes for The Tech Night Owl. “All it took was one blog articulately expressing her dissatisfaction with Apple and the decision not to pay musical artists during the free 90-day Apple Music trial.”

“The story goes that Eddy Cue, Apple’s senior VP for Internet Software and Services, awoke Sunday morning to discover Taylor Swift’s posted complaints about the policy. He got together with CEO Tim Cook and, within hours, changed the royalty structure to include payments for music streaming during the period when customers are sampling Apple Music,” Steinberg writes. “Chalk it up as a victory for the little people fighting against an ‘evil’ multinational corporation.”

“In this case though, the happy outcome got Apple and Taylor Swift tens of millions of dollars of free publicity, which will only draw more attention to the Apple Music launch, and her new album,” Steinberg writes. “Join folks, since Apple was pushed kicking and screaming into giving entertainers a fair shake.”

Read more in the full article here.

MacDailyNews Take: Setting yourself up for oodles of free publicity just prior to a massive 100+ country worldwide launch, aligning yourself with a prominent, chart-topping, highly-popular artist, and, in the process, dooming your soon-to-be obliterated rivals to looking like non-paying cheapskates to both consumers and musicians was well worth expending a little political capital upfront in order to to prompt the requisite artist “outrage” (especially since you’ll rack up many times that in return with the “capitulation”).

If that’s “boneheaded,” we’d love to see what genius guerrilla marketing looks like (hint: you’re seeing it in action).

This wasn’t “boneheaded,” it was choreographed.

As we wrote yesterday:

Apple can now claim they did not plan any of this. They had deals in place to stream without paying for the trial period. So, there was no collusion here. They simply did the right thing, thanks to Taylor Swift.

If you think the dominant leader in paid music download sales made a mistake that had to be rectified thanks to Taylor Swift a week before launching a high profile music subscription service, we have an absolutely beautiful bridge for sale in Brooklyn, cheap!

Legality is one thing, PR is another.

What’re Spotify et al. going to do, whine that it’s unfair that Apple is paying the artists* and complain that they’ll have to pay them now, too? The other streaming music services will lose that argument with the artists and with the paying public. Spotify and the rest are between a rock and a hard place.

*in effect, Apple is actually paying the labels who then pay out some percentage of that to the artists.

Metallica’s Lars Ulrich backs Apple Music after its Taylor Swift moment – June 23, 2015
How Taylor Swift became music’s most powerful voice – June 23, 2015
Apple Music to pay rights holders on a per-stream basis during three-month free trial – June 22, 2015
Taylor Swift wins streaming battle as Apple backs down on royalty payments – June 22, 2015
Apple responds to Taylor Swift, indie label complaints; will pay royalties during Apple Music 3-month free trial – June 22, 2015


  1. As usual, MDN can’t let go of their Apple pacifiers long enough to see that not paying the artists was a huge mistake, they were rightfully called out for it, and caved.

    To make this sound as if apple planned all this as some sort of a pre-launch media play is patently ridiculous.

    1. Streaming is inherently unfair to artists. It pays a lot worse than downloads and most of the money goes to the record labels, not to the singers and songwriters. This is a made up issue. If we’re really concerned about artists, then Apple shouldn’t follow after Spotify and the others that are ripping artists off and just stick to download sales. Unfortunately, the record companies insist on moving everyone to streaming, including Apple.

      The 3 month free trial issue is a distraction from the truth. Streaming is bad for artists.

      1. Why is streaming “inherently unfair” to artists? You might say the same thing about radio. It all depends on the musician’s status. Powerful independent musicians can chart their own courses. Startup musicians are generally (at best) stuck with an unfavorable contract with a label Many of them would love to make it to that point.

        Streaming does not have to be bad for the artists, but the labels have taken the lion’s share of the profits for decades, and that has not changed during the transition from vinyl to cassette to CD to digital download, or from classic radio to satellite radio to internet radio to streaming. The revenue sharing inequity is a contract issue, not an inherent problem with a particular distribution technology.

        You could make a case that libraries are unfair to writers.

      2. In the early years of radio, artists used the radio to promote themselves for THEIR PUBLIC PERFORMANCES. They made their money on public performances and concerts. Records were only made for promoting themselves.

        Today, artists think that they don’t have to perform and will make millions from the sale of their recordings. I say that they are lazy and self entitled. I listen to and support local artists only and will not pay for the big name music. I also support local venues that hire artists. This is my way of creating art in my community.

    2. FWIW, it was my understanding that the original plan was that the artists would be reimbursed for what was played during the free period, except that payment would occur after the free period, rather than along the way. That was just the impression I got during the WWDC presentation, but I have talked to others who heard or inferred the same thing. Not paying the artists indeed would have been a big mistake, not to mention a huge violation of copyrights, and so I doubt that such was actually the plan. But I am just an outsider, not an Apple “analyst.”

    3. “If you think the dominant leader in paid music download sales made a mistake that had to be rectified thanks to Taylor Swift a week before launching a high profile music subscription service, we have an absolutely beautiful bridge for sale in Brooklyn, cheap!” – MDN

    4. Yeah, no surprised to see that one particular editor at MDN continuing his consistent felatio of all things Apple does.

      Claiming that this was a choreographed screw up is probably the height of apologist behavior. Apple screwed up (or whoever decided on the initial non-paying structure, most likely Iovine) and Eddie Cue had to fix it. This could have been avoided with a minimum of strategic foresight – and is symptomatic of at least a dozen similar, and costly, strategic failures over the past 4 years.

      Like I said, not surprised at MDN’s felating attitude, and as usual this particular editor will hide, unresponsive. Really getting sick of that part of MDN.

    5. Apple could have offered them the same 70ish% of the fees they were receiving during the initial 3 months 😉

      It’s not like Apple was going to make a pile of money and not share it like some were asserting.

    6. MDN’s take is very plausible.

      Compare Apple’s response to this “screw-up” and Apple’s response to it’s antenna-gate.

      Apple’s quick fix here demonstrates either a recognition of an honest boo-boo or choreographed PR. Either way, us shareholders are better off.

  2. Gene Steinberg expressed a troubling trait of the media who pounce at any sign of weakness, and profit from their hit pieces. The rumors are passed from writer to writer like a bucket brigade getting more gasoline to the fire. “The truth rarely gets in the way.”

  3. “Boneheaded” is the appropriate term. The second phase is “CYA.” “Guerlla marketing” ? I call BS.

    What I want to know is… 1. Who wrote the plan 2. Who read the plan 3. Who did not read the plan 4. Who approved the plan.

    Of these, #1 is the least important, albeit the dumbest. #2 and 4 are more important because that’s their job –> to find anything wrong in the plan.

  4. I believe Apple knew this would likely happen from the outset, but the free publicity was not the primary goal. If Apple paid the labels for the three free (and ad free) months they would be accused of anticompetitive practices. Now that the demand has come from the artists, and Apple is “forced” to pay, this will be less likely and if occurs, much easier to defend. This will also put pressure on competitors to match it with ad free, three month revenue losing trials.

  5. ok MDN, put up or shut up.

    if you are to be believed, you have already let the cat out of the bag – so now it is time to spill the beans… what do you actually know ? lets have the details on the guerilla marketing strategy.

    either that or retract !

    1. The MacDailyNews Takes are opinion. There will be no “retraction.”

      Over many years, I’ve found that MacDailyNews is right far more often than they are not.

  6. So, the big question that everyone wants answered is, now that Apple has complied with Taylor Swifts requests, will the album “1984” be on Apple’s stream? Quid pro quo.

    1. Spotify is hating life even more today. Just wait until Swift announces that “1989” is exclusive to Apple Music. – MacDailyNews, Monday, June 22, 2015

      So, will Apple Music now have Swift’s “1989” tracks among the its catalog of over 30 million songs? Exclusively, of course? Or, is that the cherry on top, the “news” that comes even closer to, or just after, Apple Music’s June 30th launch in order to guarantee another round of free publicity for the service (and Swift)? If so, kudos for that flourish, too! – MacDailyNews, Monday, June 22, 2015

  7. My theory. Apple could not start out of the gate with “Paying” the artists, during the free period. I think if you are to look at it as undercutting the competition, and making a case for anti trust complaint, this would be on the checkoff list.

    What I think happened, weather planned or not, they needed Taylor Swift to say what she did. They needed her to withhold her music. That way, they can justify a market response motive to paying more, where other streaming services pay less.

    It all happened out in view of the public. They get Taylor Swift, they get publicity, they have transparency, and they have a darn good excuse for it all.

    This is amazingly brilliant, when you think about it. And here some of you think, Apple is being a putz.

  8. The day when a talentless micro-celebrity like Taylor Swift remotely equals the talent of such luminaries as Billy Holiday, Sarah Vaughn, Ella Fitzgerald et al, is the day I consume my hat garnished with a small Greek salad, and a lemon and pepper dressing.



      1. Someone who would be equally comfortable comparing a rising start in baseball, such as Bryce Harper, to Joe Dimaggio, Ted Williams, Hank Aaron, et al.

        At least compare achievements in similar time frames.

  9. Makes you wonder about “bend-gate”. The funniest part of that episode/possible marketing scheme was inviting the media to see the bend test machines. Cupertino had to be rolling with laughter seeing news clips of those mechanical press-down things trying to bend the phone.

  10. MDN is getting conspiratorial on this one!

    Yeah, um, no, it wasn’t choreographed, and yes, it is all going to be fine. I think it’s somewhat refreshing to see a “big man in charge” actually reconsider their position after hearing from the artists (It wasn’t just Taylor Swift, y’know). THAT NEVER HAPPENS. Trust me, I’m an artist in the world of publishing, and publishers just LOVE to tell the artists what to do, and pay them very, VERY little for it. It makes them feel alpha, and covers up their jealousy for not being intuitive/smart enough to be able to create for a living.

  11. If apple thinks that it got free publicity and they had to resort to such gimmicks, then they are out of fresh and new ideas. Apple’s strategy going into the streaming business is going to do more harm to the musicians and the music industry at large.
    ITunes music store was a breakthrough because it made buying music easier for a large section of buyers who otherwise wise would never have bought a record of the stores.
    Apple Music is nothing like that, what they are providing is nothing different and whatever else they are doing they are trying to kill the competition which unfortunately is sad to see.
    Can’t understand the desperation to get into Streaming business by apple?

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