Apple Buys Spotify

The price?

A COOL TEN BILLION!

It had to happen. Apple's stock rises when it has a monopoly. And despite all the iPhone profits, Android has greater worldwide market share. This is not the iPod revolution, wherein a seamless hardware/software combination, of iPod iTunes and FairPlay DRM, ensured that no other player could gain traction. Hell, Apple is losing traction every day in music. And if you believe that Jimmy Iovine can pull a rabbit out of his hat, you believe Jay Z is gonna turn Tidal into a raging success.

That's right, Jimmy was left out of the negotiations. Tim Cook is still pissed about the U2 fiasco, wherein Iovine paid back the has-been stars and Apple ended up with egg on its face. Apple is a bigger brand than U2, and Cook feels like the company got hijacked, so therefore, just like David Geffen was left out of the MCA/Matsushita negotiations, Jimmy had no part in this purchase, it's news to him.

Actually, credit Scott Forstall. You remember him, right? Mr. Software, Steve Jobs's right-hand man? Forstall was agitating for a music streaming service so loudly that he got fired. But after promoting Jony Ive and closing ranks Cook had a chance meeting with Daniel Ek at the San Jose airport, while their respective jets were being gassed, and Cook realized the error of his ways. He couldn't bring back Forstall, but he was man enough to recognize he'd been wrong, as Steve was too, files are history, streams are forever.

So the seed was planted YEARS ago! That's why Spotify has never gone public. Projects at Apple take as long to develop as movies at Pixar and while you were looking for an Apple TV set and deriding Jony Ive's Watch, Cook was positioning the company to win, and win big.

That's right, now Apple's going to own streaming music, no one else will be able to compete, it's monopoly time all over again.

So what's the first lesson here?

Live like a king. Get a NetJet account. You can't advance your career flying coach. Just like a wannabe leases a BMW in Los Angeles, in Silicon Valley you fly private. For the hang. For the business.

Anyway, Apple is behind the eight ball in music. iTunes sales are faltering and iTunes Radio is a disaster. Sure, iTunes Radio may ultimately triumph in countries Pandora has not entered, but it doesn't look good.

And Spotify looks great.

Don't believe the naysayers. Spotify's footprint is immense, it's in almost every country with an economy. And as Daniel Ek so famously says, if they stopped expanding/investing, they'd be profitable today. Sure, the business was built on musicians' backs, but we reward superstar coders more than superstar musicians, and conception is everything. In a world of me-too music, Spotify was never a me-too music service.

Spotify had first-mover advantage.

Which is why Beats Music could never catch it. Why Rdio and Deezer can't catch it.

Along with the deep pockets to give the music away for free.

And no one has a deeper pocket than Apple. They're the only one who could overpay for Spotify, because not only do they have the cash, they're the only one who can benefit from the synergy of the acquisition!

That Beats Music service that Ian Rogers has been working on so hard?

It's the equivalent of Copland, the unworkable OS that caused Gil Amelio to purchase NeXT and gain what evolved into OS X.

That's why Beats/Apple Music has never relaunched. It's too buggy!

So, Spotify will now be Apple's default service. With a reskinning and a rebranding. They've been working on this for two years, but the software is now launch-ready. It's akin to the Mac's switch from PowerPC to Intel. By time they announced it, they were ready to do it, all the work had already been done!

But the free tier doesn't go away.

This is Jimmy Iovine's middle finger to the music industry.

That's right, Jimmy is incredibly pissed the label bosses wouldn't agree to lower the price of an Apple streaming service to $7.99 a month. And he's now getting the last laugh. Because with Apple the only game in town, Lucian Grainge has to bow to his will. It'll be ten bucks a month for all you can eat, or you can experience the ads and listen for free. Apple has money to lose as it tightens its grip on streaming music.

That's right, it's over. No other enterprise has pockets this deep, software this good and mindshare/rep of an equivalent stature.

Launch date is Friday May 15th.

Why?

BECAUSE IT'S THE START OF TAYLOR SWIFT'S 1989 TOUR!

It was all a head fake. The joke is on you. Taylor's been in cahoots with Apple for nearly a year. She removed her music from Spotify in order to drive down the purchase price! Every dollar below $10 bil was hers to keep. Alas, she was unsuccessful in this effort, but she's coming out fine. She's gonna get a dollar for every sign-up for the first twelve months. So, expect her to hawk Apple's streaming service like she hawked her album, and no one's a better marketer than Taylor, no one's got a better relationship with the press. Didn't you notice her absence at the Tidal press conference? She, of all people, should have been there. But "1989" isn't even streamable on Tidal, doesn't that tell you something?

And now you know why Mercedes-Benz was a late addition sponsor to the Rock In Rio festival in Las Vegas. That's where Taylor's headlining on the 15th. Mercedes-Benz is going to give everyone who purchases an automobile a lifetime subscription to Apple's streaming service, as long as they continue to drive an MBZ. It's a win-win.

So where does this leave Tidal?

Dead in the water, where it already is. A bunch of the artists involved were already eager to bolt from Live Nation's management division after Monday's debacle, now this sale will anger them even further. It was all masterminded by Guy Oseary, the same guy who was responsible for the U2 album fiasco. Rumor has it they're all going to march en masse into Irving Azoff's fold, now that his non-compete has expired, but that has not yet been substantiated. But the reason MSG is dividing in two is to free up money for further acquisitions by Irving, so all signs are pointing in this direction.

The other streaming services will fade away and will not radiate. Because online only one entity wins, you gravitate to where all your friends are.

All the exclusives will be on Apple. The streaming service will work on Android and Windows, but icons will not look as sharp and functionality will be hampered in order to force people to buy Apple hardware. It's all about the hardware, you know that, right? It's the reverse razor blade theory. You give away the software to sell expensive hardware!

So now Apple owns music.

They're not going to buy labels. That's ridiculous. Who needs the headache?

But they are going to release data, so that acts will know that it's the labels screwing artists, not the streaming service.

So the war is over. You can stop bitching about Spotify. You can get back to making good music, if you ever did.

As for consumers, this is heaven. And books and television are next.

Apple plans to corner the market on TV distribution, their deal with HBO is just the beginning. And despite being judged guilty of price-fixing re books, the publishers are still angry at Amazon and are willing to throw in with Cook for a subscription service. They get to set the price. Apple will just take its traditional 30%. Amazon's reading devices suck anyway, and this is just a further way to cement Apple's power in tablets, a way to goose sales, which have suddenly stalled.

So, it's been proven that Tim Cook is quite the match for Steve Jobs. Just like he green-lit the evisceration of skeuomorphism, he's pivoting the company to streaming content. He knows that streaming is the future.

DO YOU?


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