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Apple: Where Next? 2 ISSUE 352 | 15 OCTOBER 2014 Contents thereport 06 Beyond music: Talking TV at MIPCOM 07 Pinboard: Stats, deals, startups and more 09 Country profile: Russia Apple: where next? 2 ISSUE 352 COVER FEATURE 15.10.14 Apple: where next? APPLE HAS, ARGUABLY, NOT he new battleground for streaming in complete control of as well as having the SUCCESSFULLY INNOVATED IN services is not catalogue size as device base to do it with. Why not try that? MUSIC FOR OVER A DECADE. they all have pretty much the It doesn’t have to be an either/or. It can be PING WAS A DISASTER, ITUNES same enormous catalogues – both. giveT or take the odd exclusive like Beats Music is compatible with Android RADIO STILL LIMPS BEHIND Metallica. It’s not on pricing either as they and Apple should take advantage of that to PaNDORA AND IT HAD TO BUY have all settled around $9.99/£9.99/€9.99 grow its market ahead of Google. It’s a huge IN A SUBSCRIPTION STREAMING a month. opportunity. It has cornered the download SERVICE RATHER THAN BUILD business – which is still a real business. It ITS OWN. ONLY RECENTLY DID THE LAWYER suitable to the Apple brand in a way that has cornered a good chunk of the device Chris Castle, Christian L Castle no one else has done. That is the biggest business and now they have a way to get IT ATTEMPT TO DISRUPT THE Attorneys (Texas) opportunity it has and it is in a unique onto all the other devices that they don’t ALBUM MARKET BY GIVING It has to figure out what it is going to do position to do so. control through the Beats acquisition. AWAY U2’s new ALBUM FOR with Beats, iTunes Radio and the streaming Transitioning from downloads to streams Rather than just stream to Android devices, FREE BUT THE PUBLIC BACKLASH reality. It has a good brand with artists for is the challenge – but Apple has the pieces why wouldn’t Apple try and find a way to pretty much everything it does and it hasn’t to do it. It would be an extraordinary waste sell downloads into that ecosystem as well? SUGGESTS IT DANGEROUSLY had to deal with the Pandora and Spotify if it abandoned iTunes, which it clearly is It’s not going to be trivial to accomplish, but MISREAD THE MARKET. THE hate element. But for the first time, I think, it not inclined to do. I personally don’t believe God knows the company could do it. DOWNLOAD BUSINESS THAT is about to cross the Rubicon. that [streaming] is ever going to land. The one thing Apple, and everyone else, IT KICKSTARTED IN 2003 AND Their rates on downloads have only It’s like Millerism and the psychological could do is open up the one piece of data gone up. People, generally, speaking, feel phenomenon of The Great Disappointment. that every artist could use more than any STILL DOMINATES IS NOW good about iTunes. They don’t feel good That is what is starting to happen with heat map – namely to make it easy for fans RUNNING OUT OF ROAD WITH about streaming services. Apple has to be streaming. There is almost a religion about to sign up directly to an artist email list. SALES FLATTENING IN SOME concerned that when it starts to look more streaming and how it’s the future – but Beside the ‘buy’ button they could have MARKETS AND FALLING SHARPLY like a streaming service that it doesn’t draw, it’s not paying off for anybody except the an ‘email sign up’ button if you are a fan. to its download business, a lot of the ire people who are promoting the idea. We Even if you get just 1% of people signing IN OTHERS. WITH ALL OF THAT IN that is directed at streaming. are beginning to experience The Great up, those would be real email addresses MIND AND WITH THINGS HAVING There is a rumour it is going to negotiate Disappointment of MOVED ON SO SWIFTLY IN THE downward for its streaming rates. I can’t streaming in the artist PAST DECADE, WE ASK PEOPLE imagine that it would cut those prices [for community. subscriptions] and not cut royalties. That Apple has a chance FROM DIFFERENT PARTS OF THE is going to be a shocker for everybody. You to avoid all that and INDUSTRY WHAT APPLE NEEDS have to use scientific notation to express find a way to integrate TO DO TO STAY RELEVANT AND what your royalty rate is today and you streaming into its TO ENSURE IT REMAINS THE want to make it even less? I don’t think download business. that is going to fly. It has to be careful with There will be some CENTRE OF GRAVITY FOR THE report that but it really has an opportunity to fall off. It has got DIGITAL MUSIC BUSINESS FOR combine these two businesses [downloads some pieces that are ANOTHER DECADE OR MORE. and streaming] that would be innovation- interesting and that it is the 3 ISSUE 352 partnerships with dance labels. company doing this and not us? 15.10.14 COVER FEATURE Instant grats are the [hot] I look forward, more in hope than thing going on at the minute. expectation, that the industry can anticipate that you could really do stuff with. If they Everyone is doing it and every change rather than simply react to it. did that one thing, that would be a huge time an album goes out on pre- differentiator for them. It’s no skin off order there is an instant grat. THE DISTRIBUTOR/ Apple’s nose and hardly costs anything. And That seems to be the main part ARTIST MANAGER if the artist doesn’t want to populate it with of the iTunes marketing. I am Scott Cohen, founder of The a link then shame on them. Let them have it not sure what impact that has Orchard and manager of The Raveonettes, for free. on marketing now as everyone The Dum Dum Girls, The Deer Tracks, The artists drive business to iTunes. is doing them and has been for Queen Kwong and Bleech Apple doesn’t sell tracks by working them at mainly until now, iTunes has never really a while. It is a good thing to get The Beats acquisition is really interesting. I radio and its ass isn’t in the studio [making figured as part of a pre-release strategy. people listening to music before the album don’t think of it as necessarily being about albums] and getting haemorrhoids. The Dance music has tended to do more stuff comes out, but I am not sure it is having the the music subscription service. Apple could artists are doing that so Apple should do with SoundCloud and that is slowly switching same impact now. It’s just becoming standard have done that itself. As we get into the them a favour and let them have the email to Spotify. industry practice. world of wearable technology, what are addresses – if the customers want to hand For some dance labels, Spotify is coming headphones if not wearables? We know that them over. Let the artists have the email up really fast for them. Then there are stores THE TECH WRITER wearables can do a lot more both in terms addresses of the business it drives to iTunes. like Beatport and Bleep, with Juno and Andrew Orlowski, The Register of what the user puts in but also what we It seems only fair to me. Amazon after that. Apple is believed to be putting in get out. There is a huge opportunity around iTunes doesn’t really figure. It is more place something akin to a hallmark for music, that. THE MARKETER important for dance artists to have tracks such as ‘guaranteed quality’, in which a new Where Apple has done really well is – and Lucy Blair, Motive Unknown on SoundCloud – that’s a huge part of the digital format plays a part. If this is accurate, this is where companies like Samsung and I have never done pre-releases on marketing strategy as it has such a large it would tell us a few interesting few things: Nokia have stumbled – is that when anyone iTunes and maybe that is because I am not dance music community. Dance music fans that Apple believes that music can enhance buys anything [on iTunes] they get registered working on artists who are big enough! Jay Z are more likely to want to go to Beatport or the quality of Apple’s gear; that it believes and it is connected to their credit card. Nokia and Beyoncé are the kind of acts who do that stream the track on SoundCloud – or even that music has value which is not being tried it with Comes With Music but it’s a much because they have such a huge audience and Spotify – than necessarily download from tapped today; and that Apple can exploit this easier proposition with, they don’t need to do all the pre-marketing iTunes. value gap to enhance the music experience hypothetically, “Beats stuff. Often iTunes wouldn’t be interested in You don’t hear about many dance acts for its customers. Comes With Music”. promoting [small acts]. doing stuff with iTunes. They tend to think This promises to change the landscape in You have headphones, Because I have worked with dance acts about what they can do with their own some interesting ways.
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