It was the scene of jubilation and celebration. Apple had just pulled off its most significant product launch in years and Irish band U2 was just gifted the biggest album release in music history.
More than 500m iTunes users have the opportunity to download U2’s new and 13th album Songs of Innocence for free between now and its release on 13 October.
Yesterday in Cupertino, California, Apple did not only reveal two new iPhone devices – the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus – and a whole new device category with the Apple Watch, it cemented its position as the biggest arbiter of e-commerce on the planet.
Think about this for a second, not only does having iTunes make Apple the biggest processor of credit-card transactions on the planet but bringing in physical payments using smartphones as a wallet with Apple Pay will provide Apple with unquestionable power and influence in the world of commerce.
Security is key and Apple has made it very clear it does not have access to the credit-card numbers. The system uses a dedicated near field communication (NFC) chip called the Secure Element. A unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on the user’s iPhone or Apple Watch.
But let’s go back to iTunes and U2. The late Apple CEO Steve Jobs worked tirelessly to get the music industry to back iTunes and its iPod music player 13 years ago and after much negotiation, deals were hammered out that remain solid to this day.
Music has never been the same again. The notion of buying physical copies of albums or singles (remember them?) is quaint in the era of iTunes, Spotify, Rdio and Beats Music. That is unless you are a hipster who likes the smell of vinyl or record sleeves.
Music industry needs a miracle
On stage last night after U2 belted out a stirring version of its new song The Miracle (of Joey Ramone), the show consisted of frontman Bono negotiating playfully with Apple CEO Tim Cook about releasing Songs of Innocence for free on the biggest music platform on the planet, iTunes.
You can be assured, folks, that was show business and the fanbois in Cupertino lapped it up. The real deal was no doubt the product of long and protracted negotiations between Apple and U2’s label Island Records, with a lucrative outcome for U2 – to the tune of US$100m reportedly – and marketing gold for Apple, which needed something to lift iTunes back into relevance.
“We’re not going in for the free music around here,” Bono quipped. It was a telling remark, and poignant when you consider success stories like that of U2 – the hardworking artist and band who through a combination of creativity, insistence on excellence and a DIY ethic reached soaring acclaim – may sadly be a thing of the past.
Songs of Innocence, cited as U2’s most personal work to date, charts its journey from Seventies punk, Eighties electronica and the story of its members – a towering triumph. It was tightly produced, has very heavy bass lines tempered with life-affirming melodies and sets the stage nicely for a 2015 tour. I listened to it three times back-to-back. It may be U2’s finest work to date.
And then I woke up this morning and thought that if I was a musician in 2014, at a time when the chances of making any money at all from online music sales are virtually nil and when multimillion-dollar record deals are a thing of the past, I would be even more daunted.
The biggest technology company on the planet effectively underwrote the next chapter in the success of the biggest rock band on the planet. Will the same be possible for other artists or is this just a one-off?
Music industry’s structure
The structure of the music industry has undergone massive change in the intervening years since iTunes arrived. Sites such as Napster didn’t break the model for music, the model was broken long before the iPod came along and if anything before that point the record industry’s model was one of tyranny, with arguably little share of the pie left for artists.
In many ways you can argue that the online medium has made it possible for artists to sell directly to their fans, cutting out the middle man and wasteful packaging, and indeed credible bands such as Radiohead have experimented, albeit with mixed results.
Increasingly artists and bands are making more money through the festival circuit, sponsorship and merchandising than actual music sales.
It is even questionable as to whether streaming services such as Rdio or Spotify are delivering any meaningful incomes – yet – for artists.
Last year, David Bowie initially released his album The Next Day for free on iTunes and it eventually became the fastest-selling album of 2013.
So Apple has either struck upon a new business model that established artists such as U2 and Bowie are happy to embrace, or the future of viable music creation is more troubled than ever.
“Music runs deep in Apple’s DNA,” Cook said on stage in Cupertino last night.
We exist at a time when technology has never been more powerful and useful to humanity. Music, literature and art, which run deep in all of our DNA, however, have in fact never been more threatened by technology.
If Apple is willing to revolutionise communications, commerce, media and art, then it is time serious thought went into the business model, otherwise that DNA will run dry.