Apple's Swift Reaction To Taylor Shows Content Is Queen

Apple ’s tailored and swift reaction to Taylor Swift’s request for royalties to musicians during Apple Music’s upcoming three-month trial shows that Swift has more power than she probably realizes. But the theme behind the specific issue she addressed – that more industry battles will loom as content creators (artists) meet producers and distributors – are applicable across all types of media and entertainment. Who owns and gets paid for the content in the digital space? Swift’s move and Apple’s response is only one of many events that we will witness until the dust of the digital storm settles in media and entertainment. But this one stands out because of the reaction that Taylor Swift triggered.

Next Tuesday, June 30, Apple will launch its new Apple Music streaming service with a generous three-month trial period. Last Sunday, Swift graciously but pointedly called the bluff on Apple’s apparent generosity on Tumblr: “I’m sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the service. I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company.”

Swift’s stated concerns were for “the new artist or band that has just released their first single and will not be paid for its success…the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt…the producer who works tirelessly to innovate and create…”

Apple quickly backed down. By 8:30 p.m. last night, Apple's Senior Vice President of Internet Software and Services Eddy Cue tweeted that, “We hear you @taylorswift13 and indie artists. Love, Apple.” In case there was any confusion, Cue also tweeted that, “#AppleMusic will pay artist for streaming, even during customer’s free trial period” and “Apple will always make sure that artist are paid #iTunes #AppleMusic.”

As some of my colleagues noted [1, 2], it’s really amazing that one artist can have the leverage and power that Taylor Swift has. A few months ago, she single-handedly gave a PR nightmare to Spotify, claiming that the royalties musicians get from Spotify are peanuts. Given this precedent, was Apple’s swift and tailored response to Taylor Swift planned in advance? Kudos to Apple either way. If it was planned, it shows the value and merit of anticipating power moves in social media and tailoring a response as swiftly as this medium demands. And if it was unplanned and instead discussed and decided on Father’s Day, I just witnessed the most nimble decision by a giant player in digital transformations since I started researching them 15 years ago.

Normally, in digital transformations, suppliers and distributors fight several battles and power plays until the new industry structure settles in. In media and entertainment, we are seeing these power plays abound these days. TV networks are making moves to go direct-to-consumers, led by HBO’s new streaming service HBO Go, and pay-TV providers like Dish and Verizon are fighting back with their own lower-priced bundles. Movie producers are also investing in their direct-to-consumer sites; for example, see Sony ’s facelift of its direct-to-consumer site Crackle, which had historically featured low-rated content. And then, we have music producers and artists pushing their way into streaming, with the recent launch of Tidal by Jay Z and his A-list supporters.

Power plays between content creators, producers, and distributors are the norm in today's digital transformation of media and entertainment. As these battles loom, expect to see more artists flex their muscle to ensure that content, and not content distributors, remains king. And Taylor Swift may have just shown that, at least in the music industry, content is queen.