I think the most logical explanation is that Cook missed out on the word "just". "It isn't just about money". That makes more sense.
That works for me, and I'd even argue that profits are their primary concern as a company, which means they could have a have a loss leader* in play in one small area, like Apple Music, so they generate even more significant sales in other areas of their company, like iPhone sale, as I mentioned earlier.
* Since this is Apple I'm applying the term very liberally to mean gross profits that under 20%.
As a corporate executive, this is the kind of thing he is 'programmed' to say.
Just like he will never give an earnings call for good results without using 'thrilled' or 'delighted' as key adjectives. There's a formula that these people find hard to escape from.
The problem is when the comments fly in the face of reality so much that they come as wholly empty. Lacking 'soul', to use his own word.
Well, I wish it were true for me - I like Brian Eno, Peter Gabriel, Talking Heads, Philip Glass, Steve Reich, King Crimson/Robert Fripp, and Aphex Twin among others, and 90% of the "For You" offerings each week suck beyond belief. Why am I still being fed hip-hop or rap which I can't stand? I've set up Apple Music multiple times for genres and artists, and use the Like and Dislike buttons frequently... So the human curators are not doing a very good job of artists and genre matching - or I listen to fairly unique artists!
I also think the For You kinda sucks… In the beginning of the service, I got a few lovely suggestions, but now it's just commercial garbage. I'm starting to think it has to do with my listening habits, and my dislike for the concepts of "genres". I've therefore started to "dislike" songs that I don't like, to kinda teach Apple Music more about what I like and don't like. But "love" and "dislike" would be better off if presented on the face of the playing song, rather than in the sub-menu, if it has a big influence on how music is presented to me.
Making lovely playlists is so much more than genres and popularity. I think what Apple should be doing is to open up about the identity of their curators, and create a whole new category called curators/ DJ's/ music programmers or something. Then we can find our favourite curators and stick with them. I'm finding it a bit fuzzy how to find playlists on Apple Music. Once in a while I'm finding someone I like, and try to follow them, but it's a bit mysterious.
does that mean apple will distribute all profits directly back to the artist.
There likely isn’t much profit if Apple were to account for all the many inputs to the service. Some portion of Apple’s server farms are consumed by music streaming, some portion of its engineering, marketing, sales, legal, PR, etc workforce spends time on it. Plus the royalties, advertising costs, etc. If you want to see how profitable music streaming is, just look on Yahoo Finance for SPOT.
Not to disagree with Tim but as the head of Apple, yes, you ARE in it for the money. As we are all aware, in the past Apple almost went under because they had run out of the stuff and Microsoft made them a deal. Just make sure that never happens again, right?
Just because that happened in the past doesn’t in any way imply that forever Apple’s management team needs to be ‘in it for the money.’ It does not logically follow; just sounds like reactionary and simplistic analysis. We’ve already got enough of that from the financial community, thanks.
Life was sucked out of Rock and Roll by people like Lee Abrams who launched the Superstars format in the 1970s that concentrated on a rather smallish list of established artists and their most popular songs rather than let the audience discover and decide what they wanted. Prior to his consultancy, stations used program directors that listened to the Club DJs, talked to the concert promoters, tabulated local call in requests and their own judgement to determine playlists and rotations. This resulted in a Rock station in New York sounding different from one in Philadelphia and one in Memphis sounding different from one in Atlanta. It also helped keep rock vibrant and similar things happened with country and Soul.
After Superstars delivered large audiences content to hearing mostly the same stuff over and over, the same thing was applied to other formats.
In streaming land, the tech geeks think they can predict what you will like from a relatively short playlist. That may work for some, but not for everyone- especially those with broad and eclectic tastes. We would all be better off returning to a more regionalized playlist where local artists and favorites can gain traction before breaking out nationally.
The one thing that bothers me the most about streaming from whomever is that the artists are not adequately compensated for their work. Peter Frampton recently tweeted this: "For 55 million streams of, ‘Baby I Love Your Way’, I got $1,700".
Apple should pay artists more or get out of streaming.
I pretty much disagree with most of your antiquated views on music and disagree with the notion of Apple getting out of the streaming music business when they're one of the highest payers (looks like third behind Napster and Tidal (neither of which seem very popular which means that Apple is probably a much higher earner for musicians than those two simply by being on Apple Music), but I will say that if Tim Cook is serious about his not being in the music streaming business for the money it would go a long way to prove that by, at the very least, paying artists more per listen than anyone else out there. Personally, I use Spotify and I look forward to it (and SiriusXM) app to show up on the Apple Watch later this year, but if Apple came out with a statement that they were going to, say, triple how much they pay artists I'd sign up right away.
Hmmm, that works out to 0.000030909 cents per stream. Per BGR, this NYT article claims Apple will be paying artists 0.2 cents per stream which works out to $1 for every 500.
Something seems off here. I recall Frampton was a long time holdout to letting his music go digital. Perhaps he’s trying to make things appear worse than they are to justify his holdout stance. Going by The Times’ figures he would have gotten $110,000 for 55 million streams (on Apple Music).
I think I read that Apple was trying to negotiate their rates down, so maybe this isn’t accurate, but I doubt they dropped as far as Frampton claims in that tweet.
Two corrections:
0.2 cents per stream was reported to be for the free tiers (Spotify ad based and Apple's first three months). Paid tiers should be slightly higher, but are frequently renegotiated.
Peter Frampton was apparently tweeting about songwriting payments, not artists, which is much lower per stream (ASCAP is the composers organization).
Life was sucked out of Rock and Roll by people like Lee Abrams who launched the Superstars format in the 1970s that concentrated on a rather smallish list of established artists and their most popular songs rather than let the audience discover and decide what they wanted. Prior to his consultancy, stations used program directors that listened to the Club DJs, talked to the concert promoters, tabulated local call in requests and their own judgement to determine playlists and rotations. This resulted in a Rock station in New York sounding different from one in Philadelphia and one in Memphis sounding different from one in Atlanta. It also helped keep rock vibrant and similar things happened with country and Soul.
After Superstars delivered large audiences content to hearing mostly the same stuff over and over, the same thing was applied to other formats.
In streaming land, the tech geeks think they can predict what you will like from a relatively short playlist. That may work for some, but not for everyone- especially those with broad and eclectic tastes. We would all be better off returning to a more regionalized playlist where local artists and favorites can gain traction before breaking out nationally.
The one thing that bothers me the most about streaming from whomever is that the artists are not adequately compensated for their work. Peter Frampton recently tweeted this: "For 55 million streams of, ‘Baby I Love Your Way’, I got $1,700".
Apple should pay artists more or get out of streaming.
How much more? That’s a popular song, from 1975. He’d get paid the same per play for, Figtree Bay, for example. The rates are set not by Apple or per song; all the streamers are in the same ballpark on rates per play, aren’t they? So maybe you’re saying all the streaming services should have to pay artists more. Why single out Apple?
And how much work did Peter Frampton do to stream that 43-year-old song 55 million times? And how much in royalties did he get for the same song from traditional broadcast (over the air) radio stations in the same period during which that 55 million streams were played? Is he willing to tell us that information for comparison? So we can see the whole playing field and how things are in the world outside of streaming?
And the whole hole point of business is to make a profit.
Lets have a bit more honesty and a little less of whatever this is.
Knock knock... when a person says they aren’t in it for the money that’s a way of saying they are passionate about their craft. They aren’t saying they are completely altruistic and would turn away the money that comes from doing something well.
I can only assume that Tim is basing his “not in it for the money” to be a relative term versus the margins that Apple expects from other products in their portfolio. If Apple were to triple (or whatever) what they pay artists for streaming and pass the cost along to subscribers they would see a mass exodus of subscribers to other, cheaper services. I guess they could eat the difference by not passing along the additional cost to subscribers, but then they’d face the wrath of shareholders, many of whom are less financially altruistic about Apple's generosity to musical artists, content owners, and songwriters.
As far as having humans in the music curation role is concerned, Apple is obviously promoting it as being significant because that’s where they’ve invested their money and are trying to differentiate from other streaming vendors. I think I love music as much as Tim Cook does, it’s a huge part of my life, it’s very personal, but Apple’s music curation has never influenced my musical choices or discovery process in any way. No big deal. It’s not a factor for me, but if other folks find it useful, good for them. No harm, no foul. Rock on.
If Apple pays Music Producers a lot more than other services, how on earth would be people go to "other services" when those services would not have all the music that they have. Apple's cost structure will provide an unbearable pressure on the like of Spotify' going forward and I'm pretty sure I know who will crack.
How arrogant to say you’re not in it for profits if you’re one of the major music streaming players.
If that’s indeed true, why does HomePod not support Spotify and why does Siri not accept third party music streaming services? Correct... to push ‘m out.
Wth are you blathering about, go back to your cave bud.
How arrogant to say you’re not in it for profits if you’re one of the major music streaming players.
If that’s indeed true, why does HomePod not support Spotify and why does Siri not accept third party music streaming services? Correct... to push ‘m out.
iOS is a one of the major mobile OSs. Updates every year are free. Same of MacOS. Where again is the arrogance?
And the whole hole point of business is to make a profit.
Lets have a bit more honesty and a little less of whatever this is.
You'd have a point if music streaming were they're WHOLE BUSINESS.
They don't need to make money off this services, AKA profits; breakeaven is enough.
It's slightly desingenous cause they're making money elsewhere and bringing people to AM from all the rest of the company. But, in essence he's not wrong in what he says if you actually listen to it in context.
1. SpamSandwich -- boy you almost couldn't get your fantasy about Microsoft and Apple more wrong if you tried. Microsoft did not rescue Apple with money -- the pittance they paid was a settlement for a court case they were about to lose. Where MS did genuinely help out was to guarantee versions of Office for another five years, but the (little) money MS paid was not a gift or a loan -- they bought non-voting stock (and sold it at an enormous profit years later). You should probably do some more reading on that period generally, and that Microsoft-Apple agreement specifically. Apple Confidential would be a good place to start.
2. Talest Skil -- you're right that HomePod has no local storage and can't (yet) access songs on other networked devices via Siri (though you can push them via AirPlay), but I expect that will be fixed before Christmas (and iTunes Match is a good workaround). If you don't want to use iTunes Match, it will also (directly, via Siri) play any song you've purchased from iTunes. So while it is correct to say that HomePod's version of Siri doesn't play local files, it's incorrect to infer that your only other option is to pay for a streaming service.
3. Soli -- Apple Music does in fact pay the most of any of the streaming services I'm aware of/still viable competitors. Spotify is in court for not paying people, and Tidal is about to go under. Streaming pays less per play than buying a CD and playing it a few times, but streaming pays royalties (however small) every time you play the song, whereas the CD pays bupkis after the initial sale. The rate is what the labels negotiated with the streaming providers, and Apple pays the most of all of them.
4. Everyone -- Cook did not say "Apple Music will never make any money." What he said was that money isn't the primary force behind Apple Music, and that's demonstrably true -- don't forget Apple pays royalties during the entire three-month free trial period where they're not getting a dime from you. He also didn't say it will never be profitable, he said that they didn't get into it solely to make money. You're misinterpreting his remarks, IMO. What I believe he means is that the primary reason for Apple Music to exist is to a) add value to iOS/Mac users, b) drive continued loyalty/adoption and yes sales of Apple products, and c) make a huge variety of music available in an affordable way on demand, solving the ever-increasing problem of storing music locally and getting users to pay artists for said music legally (don't pretend you haven't stolen music ever, please).
I'm not a big fan of how little streaming pays, but when I think about how much artists were getting during the previous era (essentially nothing, since everyone was stealing music), I think I may have some understanding of why more artists aren't protesting the present arrangement very much.
Life was sucked out of Rock and Roll by people like Lee Abrams who launched the Superstars format in the 1970s that concentrated on a rather smallish list of established artists and their most popular songs rather than let the audience discover and decide what they wanted. Prior to his consultancy, stations used program directors that listened to the Club DJs, talked to the concert promoters, tabulated local call in requests and their own judgement to determine playlists and rotations. This resulted in a Rock station in New York sounding different from one in Philadelphia and one in Memphis sounding different from one in Atlanta. It also helped keep rock vibrant and similar things happened with country and Soul.
After Superstars delivered large audiences content to hearing mostly the same stuff over and over, the same thing was applied to other formats.
In streaming land, the tech geeks think they can predict what you will like from a relatively short playlist. That may work for some, but not for everyone- especially those with broad and eclectic tastes. We would all be better off returning to a more regionalized playlist where local artists and favorites can gain traction before breaking out nationally.
The one thing that bothers me the most about streaming from whomever is that the artists are not adequately compensated for their work. Peter Frampton recently tweeted this: "For 55 million streams of, ‘Baby I Love Your Way’, I got $1,700".
Apple should pay artists more or get out of streaming.
I pretty much disagree with most of your antiquated views on music and disagree with the notion of Apple getting out of the streaming music business when they're one of the highest payers (looks like third behind Napster and Tidal (neither of which seem very popular which means that Apple is probably a much higher earner for musicians than those two simply by being on Apple Music), but I will say that if Tim Cook is serious about his not being in the music streaming business for the money it would go a long way to prove that by, at the very least, paying artists more per listen than anyone else out there. Personally, I use Spotify and I look forward to it (and SiriusXM) app to show up on the Apple Watch later this year, but if Apple came out with a statement that they were going to, say, triple how much they pay artists I'd sign up right away.
Hmmm, that works out to 0.000030909 cents per stream. Per BGR, this NYT article claims Apple will be paying artists 0.2 cents per stream which works out to $1 for every 500.
Something seems off here. I recall Frampton was a long time holdout to letting his music go digital. Perhaps he’s trying to make things appear worse than they are to justify his holdout stance. Going by The Times’ figures he would have gotten $110,000 for 55 million streams (on Apple Music).
I think I read that Apple was trying to negotiate their rates down, so maybe this isn’t accurate, but I doubt they dropped as far as Frampton claims in that tweet.
Apple is currently paying around .007 cents per stream, less than half the rate you thought. Last year it was closer to .006, and shockingly Google Play Music was paying out more per stream, tho they've taken a big step back this year. Napster is the only one even close to .02/stream at the moment.
does that mean apple will distribute all profits directly back to the artist.
I dont't think so: a CEO never make a controversial statement without a very specific reason
I understand the comment of Cook as follows: we make a very low profit (or even a loss) with Apple Music, and we are preparing the public for an announcement about it in the near future.
Of course I can be wrong, but history has shown that CEOs typically come with such statements if they do not make a profit with a product.
I can only assume that Tim is basing his “not in it for the money” to be a relative term versus the margins that Apple expects from other products in their portfolio. If Apple were to triple (or whatever) what they pay artists for streaming and pass the cost along to subscribers they would see a mass exodus of subscribers to other, cheaper services. I guess they could eat the difference by not passing along the additional cost to subscribers, but then they’d face the wrath of shareholders, many of whom are less financially altruistic about Apple's generosity to musical artists, content owners, and songwriters.
As far as having humans in the music curation role is concerned, Apple is obviously promoting it as being significant because that’s where they’ve invested their money and are trying to differentiate from other streaming vendors. I think I love music as much as Tim Cook does, it’s a huge part of my life, it’s very personal, but Apple’s music curation has never influenced my musical choices or discovery process in any way. No big deal. It’s not a factor for me, but if other folks find it useful, good for them. No harm, no foul. Rock on.
If Apple pays Music Producers a lot more than other services, how on earth would be people go to "other services" when those services would not have all the music that they have. Apple's cost structure will provide an unbearable pressure on the like of Spotify' going forward and I'm pretty sure I know who will crack.
The only way subscribers wouldn't leave Apple Music is if the content owners were able to exert the same concessions on other streaming services that they get from Apple. From the looks of things it doesn't appear that the context owners truly have the kind of control they desire over the content if people on the royalty collection side of the equation feel like they're getting screwed. I'm assuming that the streaming services like Apple must have negotiated payment structure and someone with authority on the content production side of the deal has signed off on the deal. Why are artists like Peter Frampton taking their grievances to the court of public opinion and trying to legislate for change instead of hiring high priced lawyers and slapping down subpoenas on those who are unfairly taking their earned profits? They are obviously not negotiating from a position of power, but is this because of Apple/Spotify/et al, or because of other music industry specific factors?
There's a certain stink around the whole music streaming business. Something doesn't quite add up and fingers of blame are pointing in every direction. I have no idea who is really calling the shots on compensation. When it was iTunes and 99 cents a song or $9.99 for an album music acquisition, for me at least, was straightforward and felt transactional. I had some sense of ownership of my music library, although that was probably a myth. With Apple Music I have a massive selection of music at an incredibly low cost to me but at what cost to those who produce it? As an outside it appears that the music industry has turned into a winner-take-all game and only the top 0.001% of artists/producers have to means to personally negotiate. They rest of them are at the mercy of someone else. Who is that someone else?
does that mean apple will distribute all profits directly back to the artist.
I dont't think so: a CEO never make a controversial statement without a very specific reason
I understand the comment of Cook as follows: we make a very low profit (or even a loss) with Apple Music, and we are preparing the public for an announcement about it in the near future.
Of course I can be wrong, but history has shown that CEOs typically come with such statements if they do not make a profit with a product.
They didn't go to Ireland because of the favorable tax treatment either.
3. Soli -- Apple Music does in fact pay the most of any of the streaming services I'm aware of/still viable competitors... The rate is what the labels negotiated with the streaming providers, and Apple pays the most of all of them.
No, if you're talking about the royalty rate. They waver a bit, right now at number 4 in payout per stream
But probably pretty close to accurate if talking total payouts. They have a very significant market share.
Comments
I think the most logical explanation is that Cook missed out on the word "just". "It isn't just about money". That makes more sense.
* Since this is Apple I'm applying the term very liberally to mean gross profits that under 20%.
Just like he will never give an earnings call for good results without using 'thrilled' or 'delighted' as key adjectives. There's a formula that these people find hard to escape from.
The problem is when the comments fly in the face of reality so much that they come as wholly empty. Lacking 'soul', to use his own word.
I wish he could bite his lip for a few seconds.
Making lovely playlists is so much more than genres and popularity. I think what Apple should be doing is to open up about the identity of their curators, and create a whole new category called curators/ DJ's/ music programmers or something. Then we can find our favourite curators and stick with them. I'm finding it a bit fuzzy how to find playlists on Apple Music. Once in a while I'm finding someone I like, and try to follow them, but it's a bit mysterious.
0.2 cents per stream was reported to be for the free tiers (Spotify ad based and Apple's first three months). Paid tiers should be slightly higher, but are frequently renegotiated.
Peter Frampton was apparently tweeting about songwriting payments, not artists, which is much lower per stream (ASCAP is the composers organization).
How much more? That’s a popular song, from 1975. He’d get paid the same per play for, Figtree Bay, for example. The rates are set not by Apple or per song; all the streamers are in the same ballpark on rates per play, aren’t they? So maybe you’re saying all the streaming services should have to pay artists more. Why single out Apple?
And how much work did Peter Frampton do to stream that 43-year-old song 55 million times? And how much in royalties did he get for the same song from traditional broadcast (over the air) radio stations in the same period during which that 55 million streams were played? Is he willing to tell us that information for comparison? So we can see the whole playing field and how things are in the world outside of streaming?
iOS is a one of the major mobile OSs. Updates every year are free. Same of MacOS. Where again is the arrogance?
1. SpamSandwich -- boy you almost couldn't get your fantasy about Microsoft and Apple more wrong if you tried. Microsoft did not rescue Apple with money -- the pittance they paid was a settlement for a court case they were about to lose. Where MS did genuinely help out was to guarantee versions of Office for another five years, but the (little) money MS paid was not a gift or a loan -- they bought non-voting stock (and sold it at an enormous profit years later). You should probably do some more reading on that period generally, and that Microsoft-Apple agreement specifically. Apple Confidential would be a good place to start.
2. Talest Skil -- you're right that HomePod has no local storage and can't (yet) access songs on other networked devices via Siri (though you can push them via AirPlay), but I expect that will be fixed before Christmas (and iTunes Match is a good workaround). If you don't want to use iTunes Match, it will also (directly, via Siri) play any song you've purchased from iTunes. So while it is correct to say that HomePod's version of Siri doesn't play local files, it's incorrect to infer that your only other option is to pay for a streaming service.
3. Soli -- Apple Music does in fact pay the most of any of the streaming services I'm aware of/still viable competitors. Spotify is in court for not paying people, and Tidal is about to go under. Streaming pays less per play than buying a CD and playing it a few times, but streaming pays royalties (however small) every time you play the song, whereas the CD pays bupkis after the initial sale. The rate is what the labels negotiated with the streaming providers, and Apple pays the most of all of them.
4. Everyone -- Cook did not say "Apple Music will never make any money." What he said was that money isn't the primary force behind Apple Music, and that's demonstrably true -- don't forget Apple pays royalties during the entire three-month free trial period where they're not getting a dime from you. He also didn't say it will never be profitable, he said that they didn't get into it solely to make money. You're misinterpreting his remarks, IMO. What I believe he means is that the primary reason for Apple Music to exist is to a) add value to iOS/Mac users, b) drive continued loyalty/adoption and yes sales of Apple products, and c) make a huge variety of music available in an affordable way on demand, solving the ever-increasing problem of storing music locally and getting users to pay artists for said music legally (don't pretend you haven't stolen music ever, please).
I'm not a big fan of how little streaming pays, but when I think about how much artists were getting during the previous era (essentially nothing, since everyone was stealing music), I think I may have some understanding of why more artists aren't protesting the present arrangement very much.
https://informationisbeautiful.net/visualizations/spotify-apple-music-tidal-music-streaming-services-royalty-rates-compared/
There's a certain stink around the whole music streaming business. Something doesn't quite add up and fingers of blame are pointing in every direction. I have no idea who is really calling the shots on compensation. When it was iTunes and 99 cents a song or $9.99 for an album music acquisition, for me at least, was straightforward and felt transactional. I had some sense of ownership of my music library, although that was probably a myth. With Apple Music I have a massive selection of music at an incredibly low cost to me but at what cost to those who produce it? As an outside it appears that the music industry has turned into a winner-take-all game and only the top 0.001% of artists/producers have to means to personally negotiate. They rest of them are at the mercy of someone else. Who is that someone else?
But probably pretty close to accurate if talking total payouts. They have a very significant market share.