Battle over Digital Delivery to the Consumer
Times of India reports that Apple's abrupt about-face on paying royalties for songs during a three-month free-trial period for its new music service was a symbolic victory for superstar Taylor Swift and other artists, and a shrewd business move by Apple, at a time when the streaming phenomenon is causing major changes in the music industry. The olive branch extended by Apple comes as music is increasingly being consumed on streaming services like Spotify and Deezer "to the detriment of album sales and iTunes downloads" heightening tensions between artists, labels and service providers over who gets paid and how much.
Apple had already agreed to share revenue from the new Apple Music service once users start paying a $10-a-month subscription fee for the service, which it plans to launch June 30. But the technology giant wasn't planning to pay artists and labels directly for the use of their music during the free, 90-day trial period that it's offering to get fans to try the service. That changed quickly, after Swift posted an open letter to Apple opposing the lack of royalties during the free period, and declaring she'd be withholding her latest album "1989" from Apple Music because of it. Apple senior vice president Eddy Cue reversed the company's trial-period terms, which had gone out to thousands of independent labels, including Swift's Big Machine Label Group, after the technology giant reached a deal with major label groups Universal, Sony and Warner in early June.
Now that digital consumption is becoming the norm in the music publishing business there is a battle as to the digital delivery or distribution method that consumers will prefer to receive their music. Amazon seems to dominate the eBook market and the publishing houses are struggling to fight back. We have not yet seen a book author do to Amazon what Taylor Swift has done to Apple. It is clear that now the battle will be on consumer preference of digital delivery for products/services that can be digitised.
Also in other news it is reported that Facebook is now apparently worth more than Walmart which is the world's biggest retailer.