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Apple+ lays bare why the music model doesn’t work for other media

Updated: Apr 13, 2019

Apple finally unveiled its long awaited video subscription service, Apple TV+, yesterday, as well as similar subscription services for news and games. While there were appearances and contributions from a stellar list of Hollywood’s top tier, from Steven Spielberg to Oprah Winfrey, specifics about all the services were rather thin which is perhaps why much of the coverage has focused on the also announced Apple credit card.

Ever since the iPod, music has frequently been at the heart of Apple’s growth. From iTunes and Apple Music in content and services, to the iPhone where at launch the music player was one of its three featured pillars alongside a web browser and the actual phone functions. The App Store would come later.

While actual revenues from music have never been hugely significant, the benefits to Apple of music, from showcasing their hardware's functionality to helping them experiment and learn about media and content, have been crucial and invaluable.

But these new services show why the music model isn’t so helpful any more for anything other than music.

When the iTunes Store launched in 2003 the music industry was not in good shape. While the real declines in revenues were still to come, growth had come to a shuddering halt after many bountiful years of CD-powered riches. Napster and its file sharing successors were in the driving seat for the future of music distribution and the big music companies knew they were not succeeding in taking back the initiative.

Enter Apple. While Steve Jobs famously had to use all of his persuasive skills to get the majors on board, the truth is he was pushing at an increasingly open door. Apple was a cool company for creative types and Jobs clearly loved music. If the music industry was going to throw its lot in with anyone to help it out of its technology nightmare, Apple was always streets ahead of anyone else.

And while Apple was a big company and, courtesy of the iMac and iPod, no longer in serious financial straits itself, it wasn’t the world straddling giant it is today. While the music companies really didn’t have any serious alternative options, they could at least feel like negotiating with Apple was a discussion of almost equals. (It wasn’t, but they weren’t completely deluded in thinking that at the time).

Jump to today and the video and news media worlds are in very different places. While the Hollywood studios are undoubtedly feeling the heat from Netflix and are pursuing a whole range of strategies ranging from setting up their own rival service (Disney), selling to a bigger media concern (TimeWarner) or another film major (20th Century Fox) the studios don’t feel they are anything close to being out of options. On the contrary, they are ready and willing to take bold bets to secure their future in the digital world.

In news media, while the smaller papers continue to go through their own Permian-Triassic extinction event (which saw over 90% of all species on earth die out), the very biggest are actually doing quite well now. It’s not a huge list to be sure, but the New York Times, Wall Street Journal, FT and a few others have built very robust digital revenues and no longer feel any sense of impending doom.

All of which means that unlike the music companies in 2003, the biggest film/TV and news media brands and creators don’t feel any pressing need to jump into bed with Apple or anyone else at this time. Especially when that will mean sharing revenue with Apple and losing the direct link with the consumer.

The paradox here of course is that from the consumer perspective, Apple’s propositions in video and news sound great. Stepping back and starting with what the consumer wants or would like here leads you to exactly the point where Apple are at. In music, the vast majority of popular music is now available through a single subscription (there are still huge absences but not enough to matter at this time), but that is very far from the case in film/TV and news. As Apple highlighted in their presentation, if you want to get a good variety of video and news content, your subscription costs skyrocket very rapidly. The gap in the market for a single destination is crystal clear and huge.

But being right is no help as the biggest players in video and news feel they’re doing fine right now and aren’t going to throw open their vaults and their pipelines to third parties like Apple if they don’t have to. Right now, that’s exactly how they feel. They're experimenting, giving varying amounts of content to the new Apple services (ranging from quite a lot to nothing at all) but don't expect to see whole archives and catalogues any time soon. Personally I would predict never.

That's because of other way music is different to other media - namely that that people listen to their favourites over and over again. Any viable music service has to have everything so listeners can find what they want and enjoy it multiple times. The music companies know this obviously and so they’re happy, indeed determined, to make sure their music is available as widely as possible.

The incentives of film, TV and news companies however are the complete opposite. Most films, TV and news stories are only consumed once and so they’ll do everything they can to make sure that point happens on their platform and not somebody else’s. If they have a big enough brand and are able to build enough traffic of their own, as the New York Times say have done and as Disney are about to try with Disney+, they'll keep their content close. There's nothing from the New York Times or Disney in the new Apple services which is no surprise.

Apple has done mightily well by prioritising music over the last 20 years or so, and in the process has built up genuine feelings of respect and partnership with the music companies. Unfortunately for Apple, those learnings are of very limited use in the worlds of video and news.

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