Apple Inc. (NASDAQ:AAPL) has successfully and decisively averted what could have been a major face-off between the tech giant and the music industry.
Apple is planning to launch its Apple Music platform on June 30. Apple Music is designed to be the firm’s attempt to challenge and probably displace music streaming services such as Pandora and Spotify. The company hopes that its platform will be able to reimagine how people listen to and pay for music just as iTunes did in 2003.
Before now, Taylor Swift and other artists had been against free music services or even free-tiers such as the one offered by Spotify. Hence, Apple didn’t offer a free tier for Apple Music but the firm allowed subscribers a three-month free access. After the three-month free access, users will subscribe for $10 per month or $14.99 for a family plan that covers six people.
It sounds fair doesn’t it? The plan allows users to test the service for three months after which they must become paying customers or leave the platform. The only problem with the plan was that artists would be bearing the cost of Apple’s 3-month customer acquisition freemium.
Taylor Swift Reacts
Yesterday, Taylor Swift wrote an open letter to Apple in a blog on her Tumblr page. She says Apple didn’t think deeply on the decision to provide a free 3-month trial without paying royalties to artists. She says,
“I’m sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the service. I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company.”
Early this morning, Eddy Cue, Apple’s senior vice president for internet services responded in a series of tweets that Apple has reconsidered its position.
Why Apple Listened
The first reason Apple listened to Taylor Swift was that the firm really wants to get Apple Music rolling. Apple doesn’t really need the potential revenue (if any) from Apple Music. The company only wants to include Apple Music in every iPhone in order to give consumers a better experience on the phone. A better experience with an Apple product makes consumers loyal to the brand. Their loyalty will encourage them to buy additional Apple products such as iPads, Macs and Apple Watches.
Secondly, Apple likes to keep public opinion on its side and Ms. Swift has a huge following. She has about 60M followers on Twitter and her “1989” album sold about 1.3M copies in the first week. A protracted public battle would have people debating the pros and cons of Apple’s decision. In the long run, Apple would have been on the losing end because many people would have wondered why it wants artists to suffer despite its bulging financial muscle. Instead, Apple Music changed its position and will pay the royalties the artists have earned.