“The biggest threat to the industry isn’t people stealing music, it’s their being rendered irrelevant by a company like Apple,” Ian Morris writes for Forbes.
“Apple starts as a streaming music service shortly, and its three-month giveaway is a genius move,” Morris writes. “Everyone will sign up. You might be on Spotify now, or Google Play Music, but you’re still going to try Apple music for three months. That’s a massive trial, and you can keep your existing subscription going all the while.”
“After three months a lot of people will realise that Apple gives them everything they need, or pretty much everything, so they move to its service exclusively,” Morris writes. “Apple is now the label. The CD is already pretty much already dead, especially with young people. All that matters now is that your music is on Apple, and not having a label means that you aren’t paying someone a huge cut… In 10 years time the record industry as we know it simply won’t exist any more. If it does, it will be because it does an about-face, takes much smaller margins and offers useful services to its artists.”
Much more in the full article here.
MacDailyNews Take: What’s to stop Apple from becoming some artists’ de facto label?
Taylor Swift ‘happily’ decides to include ‘1989’ album on Apple Music – June 25, 2015
Apple Music and the future of the music industry – June 25, 2015
Apple to pay 0.2 cent per song during Apple Music free trial – June 25, 2015
Now we’re talking. This is what I thought Apple Music would really be all about. Apple should have said, “We’re going to write 70% royalty checks straight to the bands.” Better yet, just credit the band’s Apple account. 🙂 I’ll bet it will come.
It’d be kinda funny if the money the artists get would end up being similar to what they would have gotten from a record label anyway. Of course none of the niceties of promotion and touring costs would be taken care of but I’m sure these areas will fill in nicely in other ways.
Currently, the label takes around 80-85% revenue from sales (CDs, downloads, concert tickets), and the artist gets 15-25%.
It is obviously significantly bigger chunk of the money pie if the label is cut out of the equation. The only thing labels are good for is promotion (for your album, or your concert tour).
I’m not sure much will change with respect to the labels. They wield massive influence in curating music (relationships with radio networks and DJs), so whoever signs with a major label gets that promotional vehicle behind them. Without that, you are one in a million artists searching for an audience.
Having said that, the music industry is in decline in part because many independent self-published artists now sell on iTunes, and fairly successfully, I should say. This is eating into the revenue for the big five; people who used to get new music from radio and CD store are now discovering anonymous artists on iTunes and buying their tracks (instead of WB / SONY / BMG / Universal / EMI). While they aren’t becoming obscenely rich (like Taylor Swift and similar), they are successfully making a good living form selling music on iTunes (for 85% share of revenue), rather than signing with a label and getting 15%.
Artists need promotion. It’s no different than software developers submitting an app to the App Store. If there is no marketing behind it, it won’t go too far.
That being said, social networking is the true marketing powerhouse. Ping was a failed attempt, but Apple MUSIC was the missing element.
It will be interesting to see how this plays out.
I think MDN (and many of you) are underestimating what the labels do. They don’t just distribute (as we know), they don’t even just promote (which is important).
They recruit, they scout, they curate, they produce. You’re talking about artists putting their stuff onto Apple Music without a label, but what would the quality of that work be? Music production costs money. Up-front money. Who’s going to provide it? If it’s Apple, they’re going to need to launch their own version of a label to do that, and need to recoup those costs somehow.
I don’t think the labels are going anywhere. They’re a necessary (if much-maligned) part of the commercial music industry.
Wow if musicians get 70% royalty… Who else would they want to sign up with? No one.
As long as that 70% is substantial. More artists should be able to survive this way though.
Current users of other streaming services may switch, but only if Apple gives them something geniunely useful that they don’t already have. No one has actually enumerated the unique benefits of Apple’s music service other than that it comes from über chic Apple.
Isn’t this what “App Developers” get?
Hey just call your album an App and be done!
Unknown band promotion……just link up with one of the superstars and they will promote you. Kind of like warm up acts.
That would make it less than the iTunes.
From the very beginning, when your song sells for $99, Apple takes some $0.08 and your label gets $0.92. If you are publishing without a label, through one of the digital retailers (CDBaby or similar), they take additional $0.07 and you end up with $0.85 from every $0.99 Apple gets for your songs.
In other words, on iTunes, for music downloads, musician can get up to 85% of iTunes Music Store revenue. App developers get less.
Why would I want to call my album an App?
What will record executives do now for a living?
And how will we not pay musicians now?
As barriers to exposure erode, and costs to produce as well, the market explodes exponentially.
The question: How do you stand out?
T & A
Hey Apple, we need an imdb.com for music built-in. All the info in real-time.
Apple could add this to the ‘connect’ feature where people could review and rate the albums or tracks. They might also work with Ticketmaster (and others) so that people could buy concert tickets and merchandise right from Apple Music.
If Apple Music is a huge success, Apple may decide to tackle another of the music industries problems…. stalking. By creating a premium music service you could ‘buy’ a license to stalk your favorite celebrity… get access to your own video stream on your Apple TV so you could stalk your celebrity from the comfort of your own home. They could even set up multiple tiers so the most stalkers could see additional info on the ‘Connect’ page, but only a few licensed stalkers would be allowed the premium content. I mean really… if you are an artist, and you are going to have stalkers… wouldn’t you rather know that they are licensed and paying you?
I have written about this many times since the early 2000s. Ian Morris’ assertion has ben true for over a decade, starting with the release of iTunes. Independent labels popped up to take advantage of this new music distribution approach. And it became far more practical and viable for individual artists to strike out on their own without a label at all, traditional or indie.
On a number of occasions, I have also questioned why Apple has not taken the initiative to create a seed fund/process to promote the growth of independent labels with more favorable revenue sharing with artists, or even spin off a music label of its own with an approach that mirrors iBooks.
Why has the progress away from the traditional labels been so slow? One reason is that Apple could not (and still cannot) afford to alienate the labels. They have contractual control over the vast majority of the existing music. But that will change over time as the independent artists and indie labels contribute an increasing share of the music portfolio. Another reason is that artists have been relatively slow, on average, to embrace the possibilities of iTunes and electronic media distribution. It is the nature of many artists to cling to traditional approaches and be distrustful of new approaches. And that distrust has some basis in experience, given the increasing ease of stealing and distributing music and other media in electronic form. But attempting to ignore or avoid this evolution in music distribution will not stop it from progressing. New, young artists are far more comfortable with electronic music formats and distribution, and the music industry will evolve as a result.
Odd. Most analysts are already saying AppleMusic will be another Apple failure, no better than any other music streaming service. I’d say it’s a bit too early to tell. Let’s wait until the three month’s trial service is over if anything changes. If AppleMusic does do well, I hope there won’t be any anti-trust issues of Apple having too much control over the music industry or something.
“Most analysts are already saying AppleMusic will be another Apple failure” … just like most analysts have said about every other Apple service or product.
If you want an example of consistent failure on a colossal scale, you could do no better than to examine the the predictions that analysts have previously made about Apple.
The real reason for Iovine.
The role of a Label should be to nurture new artists, put them together with the right producers, help find songs, help artists to survive whilst they create and before they hit big, promote stuff, etc, etc. Sadly nowadays they seem to be there to take a cut first, and rely on tv shows to find disposable “talent”.
The author (and pretty much everyone else) overlooks that today, the record company pays to produce the record. No label means the artist must find half a mill or whatever, to hire studio, arranger, producer, engineer, musicians, backing singers, publicists, replication facility, and even an artist advance. It is in order to recoup its outlays that justifies a label taking first cut once revenue starts flowing in. Without the label, Apple (unlikely) or the artist himself (by borrowing probably) will have to finance all of this.
They already are my 100% world wide distributor. I don’t allow my music on any other download site. Apple pay me directly 70% into my bank account. Only other way to get my music is the illegal download way.