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  • Apple and Bone-Headed Decisions

    June 23rd, 2015

    So the meme playing out in the news media is that Apple, the $700 billion gorilla, was rapidly beaten down by a 25-year-old woman. Well, a woman who just happens to be a multimillionaire rock star and one of the most popular recording artists of the day. But still. All it took was one blog articulately expressing her dissatisfaction with Apple and the decision not to pay musical artists during the free 90-day Apple Music trial.

    The story goes that Eddy Cue, Apple’s senior VP for Internet Software and Services, awoke Sunday morning to discover Taylor Swift’s posted complaints about the policy. He got together with CEO Tim Cook and, within hours, changed the royalty structure to include payments for music streaming during the period when customers are sampling Apple Music. Chalk it up as a victory for the little people fighting against an “evil” multinational corporation.

    I suppose it’s a good thing that Swift has millions of online followers, and her decision to withhold her newest album, “1989,” from Apple Music clearly had its impact. No doubt Apple was inundated with complaints from her fans, that artists deserve to be paid for their work regardless of whether Apple is getting paid. After all, with billions in the bank, why pawn off the costs of selling this service to the entertainers?

    But there may be other forces at work here. Apple, for example, believed that, by offering higher royalty payments, it would compensate for the free trial. But the popularity of a new album may be short-lived, and a new release may be past its peak by the time payments begin, thus resulting in a huge loss of income. The cyclical and unpredictable nature of music sales may not have been considered when Apple’s bean counters looked over this deal in terms of numbers and didn’t consider the gray areas that might hurt a musical artists’s paydays.

    In this case though, the happy outcome got Apple and Taylor Swift tens of millions of dollars of free publicity, which will only draw more attention to the Apple Music launch, and her new album. Join folks, since Apple was pushed kicking and screaming into giving entertainers a fair shake.

    But this isn’t the first time Apple has done things that gave them a poor rap. Don’t forget the Antennagate scandal of 2010, just weeks after the iPhone 4 was released. Seems if you held it the wrong way, reception quality would deteriorate enough under marginal conditions to lose your connection. Steve Jobs didn’t take it seriously, saying you should just hold the handset differently. But within weeks, Apple was forced to hold a press conference where they assured customers that they tested iPhones in a $100 million facility, and that you could impact reception on any mobile handset depending on how you held it. It was all about the laws of physics.

    Besides, if you still didn’t like it, you could return the phone for a refund, or get a free bumper case that would easily resolve the problem. This was a good move, but if Jobs wasn’t so flippant about the matter when he first received customer complaints, Apple wouldn’t have given ammunition to competing companies to use it as evidence to sell their own gear. Of course, such gear had similar problems, but perceptions mean a lot.

    In 2012, Apple made a huge deal, at a WWDC, in introducing Maps. This was Apple’s response to Google, and isn’t that 3D Flyover feature absolutely awesome? It turned out that the app was strictly a rough beta, and Cook was soon forced to apologize for raising unreasonable expectations. He also discharged the fellow in charge of the project, Scott Forstall, allegedly because he wouldn’t put his name on that apology. But the failure to deliver surely counted for a lot.

    Yes, Apple has been steadily improving Maps since then, but the bad reputation still exists. Even though public transit directions are being added, it’s not enough. Only a few cities will be supported when iOS 9 is released, and Google is way ahead. But if Apple originally introduced Maps as a public beta, inviting you to submit errors, you’d become a participant and not a disgruntled customer. Don’t forget that Google keeps many features in beta for years, although that fact isn’t always mentioned in the media.

    Now even when Apple reacts quickly to a problem, the media will still pounce. Take that ill-fated iOS 8.0.1 update, which almost bricked some phones. It’s not the first faulty software update from a major tech company — Microsoft has numerous blots on their record — and Apple pulled the update in a little over an hour. Instructions were posted on how to restore the affected handsets, and the fixed version came out the very next day.

    But the media continues to make the problem far worse than it really was, implying it took a lot longer to fix, and impacted a large number of iPhone users. The truth rarely gets in the way.

    There are other examples where Apple has misjudged customers, or just made wrong decisions. That won’t change, but in reacting quickly to the complaints over not paying royalties when customers were sampling Apple Music, they did a good thing. They also set a precedent that other companies may be forced to follow if they extend free trial periods to match Apple.



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    10 Responses to “Apple and Bone-Headed Decisions”

    1. Gregg says:

      I’m not so certain that Apple isn’t smarter than you think. They are trying to move to a paid model, which puts pressure on other streaming services to do the same. They are under investigation for antitrust activity as a result. They set up three months of free streaming to entice new customers. Artists howl over not getting paid. Huge publicity about how artists deserve to get paid. It puts a big fat sign up for the antitrust investigators about artists rights as well. So, Apple “caves.” And paying artists is exactly what Apple wants the industry to do, because their business model supports paying for music better than any of their competitors. Doesn’t sound a bit bone headed to me. It sounds like a plan.

    2. SteveS says:

      I’m not sure I understand the point of this long winded rant. Yes, Apple, like any company makes mistakes from time to time. However, second guessing such decisions isn’t very productive and I don’t necessarily agree with your suggestions.

      Take Maps for example. Yes, in theory, calling it a beta might have helped set expectations. However, Apple didnt’ really have that option. In order to have a smooth transition, you’d need to have both services available, side by side with the hopes that people would try out the new service. In order to do that, Apple would have had to sign up for another licensing term with Google and it was clear that Google wanted critical Apple user data. Apple was more or less forced to push Maps out the door before it was fully baked and yes, there was some pain involved. However, it’s sort of like the pain of ripping a band-aid off. It was something that needed to be done. Apple’s Maps have generally caught up to Google in terms of quality. I still see many instances where Google gets it wrong.

      Similarly with Antennagate… In reality it was a non-issue. Apple release a software update which did nothing more than change how bars were displayed on the phone and the “problem” magically went away. Jobs was right to be flippant about it, especially knowing how much money and effort they spend on antenna research, etc.

      You suggest that Apple’s reputation would be better if such things were handled differently, but let’s be honest. There are many in the media that are simply out to throw cold water on anything Apple does. There has been a “gate” associated with every iPhone release to date. Everyone of them have proven to be non-issues… the most recent “bend gate” included. The point being, I don’t see the examples you provided as being such “bone headed decisions”. There is more to each story than you seem to acknowledge.

    3. ViewRoyal says:

      Ms. Swift is a hypocrite because she doesn’t pay for artists’ work.

      Read this article from a photographer who complains that Taylor Swift uses photographers’ photos to promote herself, without paying anything to the photographers.
      https://junction10.wordpress.com/2015/06/21/those-in-glass-houses-shouldnt-throw-stones/

    4. Kaleberg says:

      I wonder if any artist with fewer fans than Swift is getting a penny from Apple streaming sales. Most artists have pretty crappy deals with the labels. Most of the money is going to go into music executives’ pockets. Apple should have set up a streaming contest during the trial period with awards for artists in various categories breaking certain levels of music demand. A contest would let some of the money flow to the creative types.

    5. SteveS says:

      Yes, Siri was labeled as beta for a while and that’s probably a good example of how simply labeling something as beta didn’t really make any difference with regard to perception. Even though it was better than competing services at the time, it was tough to live up to the hype and expectations set by Apple. Also, not to knit-pick, but Google Maps were not an alternative to Apple’s Maps right away. It was launched several months later. However, to your point, there were other mapping options available on iOS.

    6. DaveD says:

      Glad to see Apple recovered from a stumble quickly on another lesson to be learned. There are those known tech writers who will always say bad things about Apple. It is their means for a paycheck. As long as Apple ignores these folks and listens to the many out there that will praise for good things while mentioning, with good conscience and conduct, what is wrong with a product, a service, or Apple itself.

      Apple is like the bridge that links the content creators and the active users via quality products and services. As long Apple keeps both camps happy, it is hard to see any “doom” in the foreseeable future except for those critics who say it is going to happen year after year. It would make my day, my year, if the “doom” table would turn on them instead, figuratively speaking, like moving to another more productive occupation. If not then Apple should only listen to the content creators, its users, and responsible journalists.

    7. Hawkeye says:

      Boneheaded… like a fox!

      Shrewd marketing, if you ask me.

      • @Hawkeye, I don’t disagree. Apple and Taylor Swift are both brilliant at marketing. While I’d hope this wasn’t just a World Wide Wrestling-style faux skirmish, I suppose anything is possible.

        Peace,
        Gene

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