When Steve Jobs knocked heads to get record labels on board with Apple’s new digital music store in 2002 and 2003, he had a huge negotiating advantage. Music sales were being hammered by online piracy, and the labels’ own competing attempts to build online music stores had been a disaster. What Jobs offered was something new and different.
Recalled Doug Morris, then the head of Universal Music Group (he now has the same job at Sony Music Group): “He proposed this complete system: the iTunes Store, the music-management software, the iPod itself. It was so smooth. He had the whole package.”
That’s from Walter Isaacson’s “Steve Jobs,” which tells the story of how first the enthusiastic Morris and then his more reluctant peers at other companies fell in line with Apple’s grand plan for music. They did because there was no alternative.
Nowadays, there are lots of alternatives. The iTunes Store is still the main way people buy digital musical downloads, but music has been moving to more of a rental model, and there Apple is just one of a bunch of also-rans trying to gain ground on Pandora and Spotify. Apple can no longer call all the shots, which explains why the company’s head of software and services, Eddy Cue, made this remarkable about-face Sunday night on Twitter: “AppleMusic will pay artist for streaming, even during customer’s free trial period.”
This was in response to singer-songwriter Taylor Swift’s “To Apple, Love Taylor” Tumblr post, in which she explained that she was holding back her album “1989” from the new Apple streaming service scheduled to go live June 30. She was doing this, she explained, because Apple wasn’t planning to pay royalties during the three-month free trial period it was offering customers. Swift didn’t need the money, she wrote, but she worried about “the new artist or band that has just released their first single,” the “young songwriter who just got his or her first cut” and so on.
Quick results
Swift’s message had the desired effect. Cue called her up in Amsterdam, where she was on tour, then announced the shift in royalty policy. Swift tweeted: “I am elated and relieved. Thank you for your words of support today. They listened to us.”
This clearly speaks to the power of Swift — “our future president,” as rocker Elvis Costello put it. Today, Twitter is full of suggestions for other injustices she should take on. But her success is also a side effect of the happy reality for musicians that there’s no longer just one game in town. Swift has already been waging war with Spotify, pulling almost all her material from the streaming service last November because she felt it devalued her music. That hasn’t changed Spotify’s approach, but it does mean that Apple — which has benefited from Swift’s favoring of iTunes over Spotify — really wants to keep her on board.
I’m pretty sure this is good news for music listeners as well as musicians. As Bloomberg View writer Leonid Bershidsky put it back in November, “No two artists’ fan bases are the same, and no single distribution method is universally good for all the artists and all the fans.”
As Guns N’ Roses guitarist Slash, who just released a “bundle” of new music on the file-sharing site BitTorrent, put it in an interview with TechCrunch: “It’s sort of like the Wild West out there. There is no main avenue that everybody is using. Everybody’s just sort of going out and trying different things, trying to figure out what works.”
The Wild West did eventually settle down, and in the future there probably won’t be quite as many different services competing to deliver music from artists to listeners. Let’s hope that there are at least enough that Taylor Swift will still be able to push them around from time to time.
Justin Fox is a Bloomberg View columnist on business.
