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  • What About the “Other” Apple Records?

    February 10th, 2015

    I won’t get into the down and dirty details of legal entanglements that lasted for years, but most of you recall that, in the 1960s, The Beatles formed their own holding company and record label known as Apple Corps. Indeed, some of the first hits from James Taylor were recorded when he was under contract with the Beatles, not to mention Badfinger, an early Beatles-soundalike band.

    In any case, after Apple Computer came about in the 1970s, Steve Jobs and crew had to cut a deal with Apple Corps to be able to use the name. In short, they agreed not to get involved in the music. Of course, the arrival of the iPod and iTunes changed all that and new agreements had to be forged once lawsuits were fled. So in 2007, Apple settled the legal skirmishes with Apple Corps by buying up all the trademarks, and licensing the relevant ones back to the Beatles holding company.

    Yes, Apple Inc. owns the trademark for Apple Corps. In 2010, the entire Beatles catalog was brought to iTunes in an exclusive deal that exists to this very day. But while Apple offers music for sale and, with limited successm streaming, and sometimes offers exclusive content from some artists, they are not technically a recording company.

    Is that poised to change?

    There are published rumors of a greatly expanded music streaming service some time later this year from Apple. Supposedly the new service will incorporate the assets of Beats Music that Apple acquired as part of the three billion dollar purchase of that company. Supposedly it’ll be integrated with the iTunes Radio service, or presented as an additional service. Supposedly Apple will lower the monthly price from the standard $9.99 used in the industry to $7.99. Supposedly there will even be an Android version, representing Apple’s first foray into supporting another digital platform.

    Supposedly.

    But none of this is at all confirmed by anyone supposedly in the know. If Apple were to offer such a service, they’d have to get the music companies to accept either lower payments, or perhaps “eat” the additional charges to improve traffic. Certainly Apple is quite capable of marketing a service at a lower price since such a service would be designed to move more hardware. iTunes was originally set up to feed the iPod, and not necessarily as a profit center, though it certainly has turned out that way.

    Such a move would make sense because digital music sales are down. Whether that’s the result of a change in the music habits of customers — or the fact that there are fewer compelling artists nowadays to attract large sales of albums and individual songs — I will not presume to guess. Certainly other music streaming services have had some level of success, though surely far from what would be considered successful on the scale Apple manages.

    Regardless of how it all turns out, I do not think this is a market Apple wants to ignore, or play a poor second fiddle in.

    I also read an article the other day suggesting that Apple might want to create their own music label. In a sense they do that already for independent artists who don’t have a contract with a recording company. It’s also true that sales of recorded music are less significant for artists these days. The big acts earn more from concerts and merchandising. The album is just the value-added extra, same as such things as the concert DVDs, T-shirts and mugs.

    Now it’s a sure thing Apple could buy all the music companies wholesale in a single transaction, with billions of dollars in change leftover, and thus own an entire industry other than indies. Whether that makes sense is another matter entirely, and it’s not at all likely that the regulators in Europe and the U.S.A. would be warm and fuzzy about a giant multinational corporation taking over an entire industry, any industry. Or even that the music companies would accept Apple’s offer.

    So does any of this make sense?

    When it comes to introducing a new streaming music service, sure. If that’s the way the market is truly going, good artists or otherwise, then I have little doubt Apple wants to play a part in a unique way that will leverage the fact that they have 800 million iTunes accounts, and credit card numbers, on file.

    At the scale Apple operates, if there was a credible music streaming solution similar to Beats Music with an iTunes slant, and the much larger music library, Apple could come to dominate the market in short order. I could also see where Apple might launch a free public beta version to attract customers and fix glitches, and go to paid in a few months once the kinks were worked out. If you don’t think Apple wants to do betas, consider Siri and the OS X Yosemite public beta program.



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