Why was Taylor Swift so important to Apple?
If we’re talking in the terms of market capitalisation, Apple is the biggest company in the world. In fact, recent figures suggest that Apple’s profit could rival the GDP of a small country. Artists have been complaining to music streaming companies for years about their policies on the way it compensates its content providers, Taylor Swift recently pulled her entire collection from Spotify for example.
Yet, this week, somehow Taylor Swift managed to single-handedly change Apple’s policy when it comes to how they will pay artists during their 3 month trial period. Previously they had stated that artists would not receive any remuneration during this trial period. Yet, after Taylor Swift chirped up and decided to pull her recent top-selling album ‘1989’ from the service, Apple reversed this policy and said that artists would now get paid during this 3 month period after all. So why is Taylor Swift so important to Apple in their quest to oust or beat out rivals such as Spotify, Amazon, Google and Tidal to become the market leader in online audio streaming?
What is Apple’s new streaming service?
Apple unveiled its new streaming service ‘Apple Music’ earlier this month. Apple Music was created by the people behind ‘Beats Music’, the service that Apple acquired in mid-2014. It is initially going to be launched in 100 countries and will carry a subscription price of $9.99 for an individual plan or $14.99 for a family plan – after the much talked about ‘3 month free’ trial period has ended, of course. It will basically be a very similar service to its rivals in the field, but I’m guessing Apple will be hoping that the seemingly unbreakable loyalty of its users, as well as the massive amount of Apple devices currently in the market will give it enough of a boost to become a market leader before long. A lot of this will depend on whether they can keep artists onside, though.
Just how popular is Taylor Swift?
One of the main reasons Taylor Swift was able to hold so much sway over Apple this week is due to the sheer size and loyalty of her fan base. With over 140 million followers on social media and with her most recent album ‘1989’ having sold at a record pace, she is widely considered to be the biggest music artist in the world right now. To put her album sales into perspective, she sold 6 million albums in 2014, that’s almost twice as many as One Direction who sold 3.2 million.
To give us an idea of Taylor Swift’s popularity on music streaming services, we can look to Spotify’s own statement about the artist when she removed her albums from the streaming service back in late 2014, there they said:
“We love Taylor Swift, and our more than 40 million users love her even more — nearly 16 million of them have played her songs in the last 30 days, and she’s on over 19 million playlists.”
So we can see why Apple is so keen to keep artists like Taylor Swift on board with Apple Music.
Why did Taylor Swift fall out with Spotify?
The arguments from people like Taylor Swift against streaming services such as Spotify simply come down to the fact that the artists don’t feel that they get paid enough money for their music when they get played on one of these platforms. In 2013 Spotify revealed that it paid artists an average royalty figure of $0.007 per stream. That’s right, much less than a penny per play. Sure, the sheer amount of streams huge artists such as Taylor Swift receive on Spotify will make this figure add up to a decent amount of money, but big artists still feel that this pay-out is far too low in comparison to the amount of money they make when they sell their music through services such as iTunes. The picture can be even worse for niche artists who may rely more upon album sales as they might not receive all that many streams, a problem which was highlighted by Radiohead lead man Thom Yorke back in 2013. When Thom removed some of his music from the Spotify library at the time he tweeted:
“Make no mistake new artists you discover on #Spotify will no[t] get paid,” he continued. “Meanwhile shareholders will shortly being rolling in it. Simples.”
So it’s not just Taylor Swift who has had a problem with the Spotify business model, and this is partly why new streaming services seem to be springing up left, right and centre, most of who are claiming that they will offer a better and more lucrative deal for artists.
Why did Taylor Swift fall out with Apple?
So we’ve discussed why artists are falling out with Spotify and why Taylor Swift removed her albums from that service. But why did she decide not to stream with Apple Music? The reasons for the Apple fall out are slightly different to the Spotify one, though they do still have to do with royalty payments.
To get people to try its new music streaming service ‘Apple Music’, Apple have decided to offer a 3 month free trial to new users. Great, right? Well maybe if you are a new listener it is. It wasn’t such a great deal for the artists though, why?
Well, until Taylor Swift’s recent open letter to the company in which she wrote “We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation”, Apple had taken the stance that it would not pay any royalties to artists for music that was streamed during its 3 month trial period. So, in effect, it was basically asking artists to pay for its free trial offer, something which infuriated the artists themselves. Only when Taylor Swift publicly criticised the policy in her open letter however – and also refused to let her album ‘1989’ be streamed on the service – did Apple finally decide to reverse its policy and pay artist royalties during the 3 month trial period.
Why did Apple change things for Taylor Swift?
As we’ve seen already, Taylor swift was the biggest selling artist of 2014 by a country mile. To release a new music streaming service without her best-selling album ‘1989’ on the playlist would have been a disaster for Apple. Taylor Swift offers much more to Apple in its goal of winning new subscribers for Apple Music than most other artists do, simply because she does not have her current library available to stream on Spotify. As we mentioned earlier, Taylor Swift has amassed over 140 million social followers and many of those are extremely loyal ones – known as ‘Swifties’. How many of these fans and followers might be tempted to sign up for the 3 month free trial of Apple Music if they knew that they could stream Taylor’s music once again, which they can’t currently do on Spotify? To lose Taylor Swift would have been a big blow for Apple.
I also think that the possibility of other artists following suit really will have made Apple think. Spotify may be able to afford to lose an artist from its catalog here and there without it having too much of an effect on its business, as they are already established and are the most well-known brand in music streaming. For Apple to win subscribers away from Spotify however, it will have to do its utmost to keep as many artists in its library as possible. It only takes one influential person to start an artist revolt and I think Apple knew that, so they had to make a decision and fast. Fortunately for them they did, and Taylor Swift has this morning confirmed that she will now allow her ‘1989’ album to be streamed on Apple Music.
It just goes to show that artists do still hold power in these situations, especially now that there are credible rivals to Spotify in the market. This is something that Spotify might have to think long and hard about going forward if it wants to maintain its position as top dog in the audio streaming niche.