Sunday, September 21, 2014
How Apple can turn the U2 fiasco into a business model
I've been somewhat fascinated by watching the whole Apple / U2 fiasco over the last few weeks. In case you missed it, as part of the iPhone 6 announcement, Apple worked a deal with U2 to give every iTunes user a free copy of U2's new album, Songs of Innocence, by automatically placing it in the user's iTunes library and allowing them to download it for free before a certain date.
Now, I've been a U2 fan ever since the mid eighties, so I was quite grateful to Apple and U2 for doing this, but many people were not. I get this. If they put a Jay-Z album in my account, I probably wouldn't want it either, and would probably find a way to delete it. It would probably annoy me.
Seeing this article about how this whole move prompted a huge sales bump in U2's back catalog, though, it got me thinking about my whole music consumption and purchasing experience these days. As where I just used to just walk into a store and pick something that seemed to be marketed to me and would take a chance, these days I typically listen to something on either Spotify or Google Play, and if something grabs me I'll usually still buy it, and in many cases I will buy a bit of the back catalog. Sometimes in one sitting, sometimes bit by bit over time.
Putting these two things together, Songs of Innocence is just and ad for the rest of U2's back catalog, and for those that like U2, it seems to have worked. The problem was that the ad was totally untargeted, and users generally don't like ads that aren't targeted to their interests, or their purchase intent.
The thing is, Apple also has this thing called iTunes match, where I can upload my entire library to iCloud. This allows them to pitch me music I might like. For bands that are similar to what's in my music library, why not allow me to opt-in to having Apple sell my music library as targeting to bands whose albums I don't own, and putting in albums from those bands that might make me buy the back catalog?
So the money would flow like this: the music label would pay Apple to target me and put their album in my collection for a month, and if I download it I get to keep it. Hopefully, I would buy more of that band's back catalog and then the band would make up the cost of the placement and more. Hopefully they bought a fan.
I don't know all the numbers to actually work out if this would be a viable money maker for any of the parties involved, but it feels like there would be something there if done right.