The Apple Scam

This only works if they get rid of CDs and files.

Here's the skinny... Jimmy Iovine and the major labels are conspiring to get rid of free. Not only the free tier on Spotify, but YouTube too. Apple writes a check to the labels on 40 million subscribers for years, whether they reach that number or not, and everybody pays for music.

Or do they?

This is why the European Commission is investigating Apple.

Brilliant end run or delusional rearguard effort? A way to make a boatload of bucks or a road back to piracy?

Spotify kills piracy, that's been proven.

Once upon a time there was piracy in the cable business. You could steal not only HBO, but the whole damn service. Because the cable could be split and the way they prevented you from getting premium channels was to mount filters in the chain, which anybody with a screwdriver could then remove and get HBO, Showtime and Cinemax, et al, for free. I knew almost no one paying full price, if at all, for cable in the eighties. But everybody pays now, because cable went DIGITAL!

You can't steal it. The premium channels are scrambled. Maybe some superhacker along the lines of a young Steve Wozniak can figure it out, but mere mortals can't, so everybody pays for cable, at least until recently, when the internet allowed you to cut the cord and you could sign up for standalone HBO.

Believe me, the content providers are up in arms. At least the cable companies are selling internet, which they just jack up the price for in order to meet their numbers. But when we go a la carte, and the game has begun, marginal channels will disappear, the cable companies will refuse to pay for them.

And people have been refusing to pay for music for fifteen years. All that hogwash that piracy increases sales, what a crock that was. But can we ever get people to pay again?

If we get rid of the aforementioned CDs and files. Renting an evanescent product, there's no there there. But as long as there's a CD, as long as there's an iTunes Store file, piracy will reign.

Is the music business willing to kill the CD and file?

Of course not, because they're not in the business of taking big risks. Shut down YouTube and people will just use BitTorrent or IM or hard drive/USB stick to swap, assuming they want it at all. That's what's ignored, the promotional value of all these services. Who's gonna check it out if they have to pay for it?

A lot fewer people.

Some will stick with Pandora. Back in the pre-internet era most people did not buy music regularly, radio was enough. Is everybody going to sign up for a music subscription?

Certainly not if there are files to transfer. But what if there are no files? Who is going to capture a stream and then transfer it? It's doable, but a huge pain in the ass. Convenience argues for payment.

And payment could be baked into a cable or cell phone bill, so it doesn't feel like you're paying.

Now you know why Jimmy wanted a lower price. He was right.

Is he right about killing piracy/getting everybody to pay?

First and foremost, he's leveraging his industry relationships for exclusives. So you've got the Apple brand and the content and you can kill Spotify if it's got no free tier.

This is about money. It's got nothing to do with art. That insane Taylor Swift post about respecting art is b.s.

Jay Z is reacting to Apple with Tidal.

And we're sitting home wondering if our whole world is gonna change.

Never underestimate the ability of fat cats to stack the deck, to put their thumb on the scale to their advantage. The recorded music business has lost half its revenue and it wants it back, and fast. Labels don't care what artist hits, whether anybody hits, as long as they get paid.

This is their strategy.

You've been forewarned.


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