I'm gonna go out on a limb here and guess that the only reason Apple caved is that the dollar amount was too little to be worth any amount of negative PR.
Apple is a $300 billion/yr company. They will not risk that revenue stream (which is largely based on their positive brand image) for a few points of margin on a product that will probably never be more than 0.01% of their revenue.
Kudos to Apple for recognizing that this is something they absolutely don't care about. The value of their brand is worth more than this. I just worry about the volume of new products coming out of Apple these days and wonder how much care and thought goes into them.
That's pretty much it. It's a modest marketing investment which probably makes them look better than if they'd just done the right thing in the first place. I doubt it was calculated like that from the start, but that must be how it looks to them now.
I'm afraid I agree with the alternative sentiment, that is to say that this whole thing is a 'PR hoax'. Kudos to Apple for playing the game and coming out looking like the benevolent and merciful master, humbled by the pleas of his peons.
The Apple Watch doesn't inspire much confidence in Apple's future products. And I'm not talking about iPhones and iPads and Macs here. Those are "easy". But Apple Watch, Apple Car, Apple VR and whatever else they might want to launch in the future - I doubt they will be "Jobs-quality". And by that I don't just mean whether or not they will use premium materials. But whether the "product" package makes sense or works as well as it should.
This is pretty ridiculous. There's very little comparison.
1. Apple didn't respond to a letter from Taylor swift in < 24 hours - this had been building for a week or two as large indie labels made their opinions public and let's not forget it's rumoured that Apple was having difficulty signing any indie labels. I would be shocked if Apple hadn't been considering this for weeks already.
2. App devs - of which I am one - get a decent deal. It's simple, clear cut, and quite high especially when compared with how things are in brick and mortar stores.
3. There is no comparison here anyway. When Apple TELLS developers that you can only have your apps on the store if you give up 3 months of revenue then there is one.
It's nonsensical to compare to brick-and-mortar stores. We didn't go from brick-and-mortar to the App Store. We went from direct internet sales, where we got to build whatever we wanted, ship updates instantaneously, and keep 98% of the revenue, to the App Store.
Agreed. One other thing to note—Apple doesn't prohibit timed trials of content. In fact, Apple supports it and builds in free subscriptions. What they prohibit is apps that completely stop working after a trial period. But they allow apps to have some functionality cease after an introductory period.
This is completely true. Apple's absolute control over their ecosystem is not just a drawback -- it's also a significant benefit of them. There are far fewer apps in the Apple store than the Play store that are DOA, and the general quality of apps is far higher. Although it's somewhat contrary to the modern spirit of development, Apple's policies have proven to be a very good method of quality control.
#2 is true, but what the article points out that it's mainly an app store reform that the indie devs have been asking for for seven years now - to no avail, app discovery is still pretty much non-existent in the app store outside of the top listings and the 'featured apps'.
I've read this a few times, and I'm still failing to understand what, specifically, indie app developers have been demanding "for over six years." Apple isn't going to publicly respond to every support ticket filed in less than one day - this really are apples and oranges
(Not to mention, the answer from Apple could be 'no' in both scenarios.)
The whole thing between Taylor Swift and Apple is so obviously staged. The fact that this was done over Twitter, the most shareable possible format, the "Love, Apple" bit the wording of all of it. The need for Apple to position itself as the Artists streaming service. How are we seriously talking about this as if this actually happened unscripted?
Edit: It's a common negotiation technique to add something that you know the other party will object to. Since there will always be push back it's good to have something you can sacrifice that you never really needed in the first place to appease the other side.
Reminds me of a story of a photographer that would leave their hand in some of the shots deliberately so the client would point them out and spend less time nitpicking on the rest of the composition.
Apple wants access to Swift's market.
Devs want access to Apple's market.
Simple supply and demand here - the demand side has to pay or otherwise they don't get in. Sure it sucks that the policies aren't very transparent and things are expensive, but them's the breaks.
The likely reason for all this is Apple not wanting to be accused of engaging in anti-competitive behavior. It’s illegal to use your market power and financial position to sell products below cost and thwart real competition in the market. This is why they offered higher royalties later and no royalties for 3 months. It was designed so artists would get the same amount in the end but unfortunately have to wait 3 months to start getting in.
Apple’s reverse in direction is interesting. Perhaps they feel the risk is not as high as they were expecting. Apple gets sued every day of the week, but something like this could be very costly. Perhaps they know the financial benefit outweighs the risk.
Claiming Apple doesn’t care about artists is absolutely ridiculous. Except for a few high-profile critics, artists view iTunes as saving the music business and allowing even small-time artists to make a living without needing to sign with a label (other than with one of the labels that specialize in this sort of thing and for which artists don’t need to qualify).
"No action" you mean like them adding in-app-purchases, better monitoring, easier provisioning, faster submission and check process, unified iOS+Mac subscriptions, bundles, and tons of other things?
It's not just about Taylor Swift having way more pull than any developer, she was also presenting Apple with a problem simple enough that it could literally be solved by throwing money at it.
As Rob Napier pointed out in a great blog post [1]: The app store sustainability problem is definitely not the sort of problem you can just throw money at, and thus can't be responded to by Apple with the same way.
Even in this article it is immediately apparent there is no consensus among the affected as to what the real problem is: Is it lack of free trials? Paid upgrades? Review times?
At least some of the complaints of indie devs like Cabel Sasser relate to the technical restrictions that Apple places on Mac App Store apps. Based on statements by Apple, these restrictions are, to Apple, important from a security standpoint.
Thus it's probably going to take more than complaints to resolve them. It's going to take Apple engineers figuring out how to permit more power for good devs without creating holes for malware.
Apple is well aware of the shortcomings of the Mac App Store model, which is why they continue to provide an official, supported path for apps to be installed on Macs from outside of the App Store.
From a money standpoint, Taylor Swift is getting 1.5% more from Apple than App Store developers are...doesn't seem like that much to me. As far as I know, there is no "download and try it for 90 days" feature in the App Store.
Taylor Swift is young and wants to be richer now and not wait 50 years until streaming nets here the same. Indies will have to make they money from live events and t-shirts anyways.
The author seems excessively concerned with the language people use to interact with Apple. It would seem to me that a simple application of "you will catch more flies with honey than with vinegar" is all that's at play here, and that the author is tilting at windmills.
Apple's a big, powerful company, it's hard for one hand to know what the other hand is doing sometimes. All such companies have to rely on their customer base to guide them. If you think about it, Apple is far more responsive than most other companies their size or in their segment. Jobs used to answer emails ferchrissakes.
His criticism of Gruber (and others) is apt, and important. Even when these guys are being honest about the flaws in the things Apple makes, they offer very little structural critique of what has become the most profitable company in the world and a major driving force in the tech industry.
> most musicians do live shows out of necessity, not by choice.
This is absolutely a correct statement, but not in the way the author intended. A writer writes, a painter paints, a musician performs. Not by choice but out of necessity.
Erm... no. They mostly love what they do and would do it as a hobby even if they didn't get paid for it. However musicians absolutely despise most kinds of live shows.
A request to tweak Apple's music contracts that amounts to a rounding error on their quarterly profits is not exactly analogous to requests to change Apple's software platform strategy (which the OP leaves annoyingly vague).
"Reminder: Apple uses music to make billions off hardware. Artists see nothing from this."
- I have never seen the exact numbers but I assume a lot more people have a portable music player with them at all times (iPod then iPhone) than they did a decade ago. I can only speak anecdotally but I buy more music because I know I'll have it with me at all times than I did in the portable CD/tape days.
Well, record player companies made money off of Artists without paying them. This is a basic secondary market (hell, parking garages make money off Artists) and has nothing to do with the direct making of money on music such as a subscription service or actual record sales.
This argument has actually been used to tax blank CDs which is bull. Should we tax all parking lots when a game or Artists is playing near them? Taxing the ecosystem because some group determined their part of it is more important is foolish.
The iPod was a success, but the iPhone and iPad were mega-super-success. Those devices were not about music, but apps, email and Internet. Apple certainly leveraged their success with the iPod but I don't buy that "Apple makes all it's money off hardware because of music" line.
I buy more music today than I ever have done in the past and having a decent portable media player (iPhone) has a lot to do with this. I actually buy 99% of my music from bandcamp which is a really great service that pays musicians quite well and has lossless downloads.
And developers have been bending over with beaming smiles on their faces for just as long.
Apple's behavior might change if the developers keeping it alive left for other ecosystems in sizable enough numbers. Unfortunately, that has yet to happen in the mobile space, so Apple continues to have no problem shafting mobile devs (the desktop space is a different story, however, since Apple is not dominant there except for very specific market segments, like hipster Ruby programmers and/or art students).
So...iOS app developers band together to protest the fact that Apple uses our apps for marketing purposes and to make the platform more attractive to buyers. Yet, they don't pay us a dime.
It's the same mechanism, isn't it? The iOS platform became attractive to buyers due to the HUGE investment on the part of developers who created free, freemium and paid apps for the platform. Apple has been using all of these apps in their marketing campaign since day one. The platform without apps is worthless. Ergo, the apps give them value and make them desirable.
And so, Apple created a slippery slope of an App Store model where just about the only way to have a shot is to give your work product away and hope to monetize it through paid upgrades or advertising. Failure on the App Store is the norm, not the exception. Yet, again, Apple still benefits from your free/mium app being there and they never pay you a dime for it.
Are there parallels between this and music? I think one could very well argue the case to be so.
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.
The 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.
Look I agree with most of the points raised here but:
> 2. Apple can pivot in less than a day.
I seriously doubt this happened. I think it's crazy to believe that Apple changed it minds due to this one blog post. More likely they had been planning this announcement for some time and possibly moved it up a little bit due to Taylor.
Would it not be mutually beneficial for Apple to relinquish their 30% cut from app sales? More developers would focus on iOS (because of the money), they'd make better quality apps, and Apple would sell more hardware.
Though if Apple removed its cut it would likely be even less incentivized to fix thing like app store review times/app store discovery, as those teams would suddenly become pure cost centers.
[+] [-] exelius|10 years ago|reply
Apple is a $300 billion/yr company. They will not risk that revenue stream (which is largely based on their positive brand image) for a few points of margin on a product that will probably never be more than 0.01% of their revenue.
Kudos to Apple for recognizing that this is something they absolutely don't care about. The value of their brand is worth more than this. I just worry about the volume of new products coming out of Apple these days and wonder how much care and thought goes into them.
[+] [-] TillE|10 years ago|reply
[+] [-] acron0|10 years ago|reply
[+] [-] dba7dba|10 years ago|reply
[+] [-] higherpurpose|10 years ago|reply
[+] [-] k-mcgrady|10 years ago|reply
1. Apple didn't respond to a letter from Taylor swift in < 24 hours - this had been building for a week or two as large indie labels made their opinions public and let's not forget it's rumoured that Apple was having difficulty signing any indie labels. I would be shocked if Apple hadn't been considering this for weeks already.
2. App devs - of which I am one - get a decent deal. It's simple, clear cut, and quite high especially when compared with how things are in brick and mortar stores.
3. There is no comparison here anyway. When Apple TELLS developers that you can only have your apps on the store if you give up 3 months of revenue then there is one.
[+] [-] mikeash|10 years ago|reply
[+] [-] hahainternet|10 years ago|reply
2. App devs get a decent deal, but restrictions like taking a cut of all purchases done through an app are very distasteful.
[+] [-] jediMac|10 years ago|reply
[+] [-] magicmu|10 years ago|reply
[+] [-] Cthulhu_|10 years ago|reply
[+] [-] esolyt|10 years ago|reply
Yet the reply was addressing Taylor Swift personally. The fact that Apple replied to a letter by Swift in 24 hours does not change.
[+] [-] atmosx|10 years ago|reply
Care to explain further?
[+] [-] austenallred|10 years ago|reply
(Not to mention, the answer from Apple could be 'no' in both scenarios.)
[+] [-] hiou|10 years ago|reply
Edit: It's a common negotiation technique to add something that you know the other party will object to. Since there will always be push back it's good to have something you can sacrifice that you never really needed in the first place to appease the other side.
[+] [-] kylnew|10 years ago|reply
[+] [-] pbnjay|10 years ago|reply
Simple supply and demand here - the demand side has to pay or otherwise they don't get in. Sure it sucks that the policies aren't very transparent and things are expensive, but them's the breaks.
[+] [-] pluckytree|10 years ago|reply
Apple’s reverse in direction is interesting. Perhaps they feel the risk is not as high as they were expecting. Apple gets sued every day of the week, but something like this could be very costly. Perhaps they know the financial benefit outweighs the risk.
Claiming Apple doesn’t care about artists is absolutely ridiculous. Except for a few high-profile critics, artists view iTunes as saving the music business and allowing even small-time artists to make a living without needing to sign with a label (other than with one of the labels that specialize in this sort of thing and for which artists don’t need to qualify).
[+] [-] cpr|10 years ago|reply
But, boy was it exciting at the start! Shed a few tears and move on...
[+] [-] coldtea|10 years ago|reply
[+] [-] drham|10 years ago|reply
As Rob Napier pointed out in a great blog post [1]: The app store sustainability problem is definitely not the sort of problem you can just throw money at, and thus can't be responded to by Apple with the same way.
Even in this article it is immediately apparent there is no consensus among the affected as to what the real problem is: Is it lack of free trials? Paid upgrades? Review times?
[1] http://robnapier.net/throw-money
[+] [-] snowwrestler|10 years ago|reply
Thus it's probably going to take more than complaints to resolve them. It's going to take Apple engineers figuring out how to permit more power for good devs without creating holes for malware.
Apple is well aware of the shortcomings of the Mac App Store model, which is why they continue to provide an official, supported path for apps to be installed on Macs from outside of the App Store.
From a money standpoint, Taylor Swift is getting 1.5% more from Apple than App Store developers are...doesn't seem like that much to me. As far as I know, there is no "download and try it for 90 days" feature in the App Store.
[+] [-] bedhead|10 years ago|reply
[+] [-] bnegreve|10 years ago|reply
[+] [-] smanuel|10 years ago|reply
Shocking news.
[+] [-] seqastian|10 years ago|reply
[+] [-] vinceguidry|10 years ago|reply
Apple's a big, powerful company, it's hard for one hand to know what the other hand is doing sometimes. All such companies have to rely on their customer base to guide them. If you think about it, Apple is far more responsive than most other companies their size or in their segment. Jobs used to answer emails ferchrissakes.
[+] [-] serve_yay|10 years ago|reply
[+] [-] Yhippa|10 years ago|reply
[+] [-] mosdave|10 years ago|reply
This is absolutely a correct statement, but not in the way the author intended. A writer writes, a painter paints, a musician performs. Not by choice but out of necessity.
[+] [-] mavdi|10 years ago|reply
[+] [-] saturdaysaint|10 years ago|reply
[+] [-] jusben1369|10 years ago|reply
- I have never seen the exact numbers but I assume a lot more people have a portable music player with them at all times (iPod then iPhone) than they did a decade ago. I can only speak anecdotally but I buy more music because I know I'll have it with me at all times than I did in the portable CD/tape days.
[+] [-] protomyth|10 years ago|reply
This argument has actually been used to tax blank CDs which is bull. Should we tax all parking lots when a game or Artists is playing near them? Taxing the ecosystem because some group determined their part of it is more important is foolish.
[+] [-] mikeash|10 years ago|reply
[+] [-] josefresco|10 years ago|reply
[+] [-] mrmondo|10 years ago|reply
[+] [-] r00fus|10 years ago|reply
I use my iPhone for business and personal connectivity - taking calls, sharing webex, emails, SMS/imessages, etc.
Once in a while I listen to music. It's great. However, I see no reason why artists of that music should get a piece of Apple's pie here.
[+] [-] PaulHoule|10 years ago|reply
Apple has been shafting developers since at least 1987.
[+] [-] yellowapple|10 years ago|reply
Apple's behavior might change if the developers keeping it alive left for other ecosystems in sizable enough numbers. Unfortunately, that has yet to happen in the mobile space, so Apple continues to have no problem shafting mobile devs (the desktop space is a different story, however, since Apple is not dominant there except for very specific market segments, like hipster Ruby programmers and/or art students).
[+] [-] rebootthesystem|10 years ago|reply
It's the same mechanism, isn't it? The iOS platform became attractive to buyers due to the HUGE investment on the part of developers who created free, freemium and paid apps for the platform. Apple has been using all of these apps in their marketing campaign since day one. The platform without apps is worthless. Ergo, the apps give them value and make them desirable.
And so, Apple created a slippery slope of an App Store model where just about the only way to have a shot is to give your work product away and hope to monetize it through paid upgrades or advertising. Failure on the App Store is the norm, not the exception. Yet, again, Apple still benefits from your free/mium app being there and they never pay you a dime for it.
Are there parallels between this and music? I think one could very well argue the case to be so.
[+] [-] Tloewald|10 years ago|reply
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|10 years ago|reply
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.
[+] [-] joshstrange|10 years ago|reply
> 2. Apple can pivot in less than a day.
I seriously doubt this happened. I think it's crazy to believe that Apple changed it minds due to this one blog post. More likely they had been planning this announcement for some time and possibly moved it up a little bit due to Taylor.
[+] [-] allsystemsgo|10 years ago|reply
[+] [-] drham|10 years ago|reply
[+] [-] nr152522|10 years ago|reply
And perhaps build a new music app named 'Taylor' in Swift?