4 ms·
I see a new trend emerging in response to the Swift letter / Apple response -- the idea that Apple is exploiting artists and is no better than anyone else in ho
by Tloewald 11y ago
I see a new trend emerging in response to the Swift letter / Apple response -- the idea that Apple is exploiting artists and is no better than anyone else in how it treats people.
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.
- tfigueroa 11y agoThe Pandora guy, Tom Conrad, retired from Pandora; though I'd guess he still holds shares, I wouldn't say he's "trying to make money too". He's ex-Apple, pro-Apple, and was CTO of a tenacious music streaming company - all very relevant experience to comment on this. 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.
- Tloewald 11y agoThanks for the correction on his status w.r.t. Pandora. I'll give him the benefit of the doubt and suggest he's disinterested then. But, calling them out for having straightforward royalties? 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.
- tfigueroa 11y agoTypically royalties aren't tied to revenue; they're tied to plays. Play a song, pay out. That's how the system tends to work. 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.