Apple is starting to act a lot like a record label.
What’s going on? Apple has already directly enlisted the help of megastars to help curate its new Apple Music service. It’s also procured exclusive content from key artists for the new service.
Apple is traditionally a digital distributor of music (and a lot of other things). But when does it cross the line into being a publisher? With Apple producing music videos for artists, it may be crossing that line.
When you think about what’s happened within Apple’s music operation during the past couple of years, the move toward becoming a label seems natural. When Apple bought Beats back in 2013, it bought a bunch of people from the Hollywood record label world. It bought a mindset that is used to dealing directly with artists on the creative and business levels.
And the Beats people — Jimmy Iovine and Dr. Dre — are extremely powerful label execs. We’ve heard from sources that while there’s a lot of affection between the Beats people and the Apple people, the Beats people haven’t exactly blended into Apple culture. They are still very self-determined and working on their own agendas, the people said.
The risk here is that Apple will anger and alienate the record label groups that it depends on for content. If the labels see Apple as a competitor, the licensing process could get more difficult than it already is.
But then again, Apple is an extremely powerful distributor. The labels need them — maybe more than Apple needs the labels. The labels, by the way, just want to have their content available wherever consumers want to stream it or buy it. It’s a killer business for them. They take seven out of every ten dollars digital distributors like Apple make from streaming.
Apple may have the leverage it needs to become more engaged directly with artists. And it certainly has the budget. It also may be an extremely appealing idea to the creative types at Apple. Apple loves the idea of being a taste leader, and what better form of curation could there be than identifying cool artists and helping them express their vision clearly?
For the time being, we may see Apple working directly with artists who have control over their own master tapes — big stars like Taylor Swift, who are less beholden to a label. This may be mainly about promotional content right now, but what’s to prevent Apple from signing acts to its own label and handling everything from A&R to recording to releases to videos?
Iovine would love it.