Apple and the music business

As of early August, Apple Music, the company’s long-awaited on-demand streaming service, seemed to be a success: Overcoming technical glitches and complaints about a complex interface, Apple announced 11 million trial-subscription sign-ups in five weeks — more than half of chief competitor Spotify’s paid international user base. But the music industry was at least as happy about another aspect of Apple’s musical efforts: the company’s free Beats 1 online radio station focusing on new music, which broadcasts live 24/7. “It’s exciting,” says Glassnote Records president Daniel Glass. “Everyone’s watching them on music discovery.”

When Drake wanted a high-profile debut in late July for “Charged Up” — a salvo in his beef with rapper Meek Mill — he chose his own Beats 1 show, a venue that hadn’t even existed the month before. Beats 1 is meant to promote Apple Music’s on-demand streaming, which debuted alongside it on June 30th, but the station is becoming a force in its own right, starting to break songs (“New Americana,” from rising alt-pop star Halsey) and raising excitement with a new approach to a very old medium — though Apple hasn’t released listenership numbers, and terrestrial and satellite radio aren’t going anywhere. “It’s really simple,” says Beats co-founder Jimmy Iovine, who sold the company to Apple last year. “All the people of the world listening to the same song at the same time.”

“It’s a nice hybrid of the past and the present,” says Vampire Weekend’s Ezra Koenig, who has his own show, as do Beats co-founder Dr. Dre, Elton John, Pharrell Williams, Queens of the Stone Age’s Josh Homme and St. Vincent’s Annie Clark.

Beats was working hard on playlists tagged to users’ musical tastes – an approach that continues on Apple Music, which offers targeted suggestions under its “For You” header – when Nine Inch Nails frontman Trent Reznor, who was Beats’ chief creative officer, decided it needed something more universal as well. “I realized it would be cool to hear someone talking,” says Reznor, “to turn on the radio and feel a part of something.”

Beats 1 is meant to help build what Iovine calls “an ecosystem” around Apple Music. “The [other streaming services] feel like they were designed by engineers,” says Reznor. Adds Iovine, “Why use the word ‘service’ if you’re not a service? If you’re just a utility, what’s the point?”

The station’s vibe was designed by U.K. DJ Zane Lowe, who garnered a reputation as a tastemaker during a 12-year career at BBC1. The combination of hip-hop, indie rock, pop and EDM that Lowe has brought — along with heavy doses of U.K. grime artists — lend the station an unapologetic hipness. “It’s not concerned about what’s charting,” says Reznor. “And we don’t do research. Just go with what we think is cool.”

The third segment of Apple Music’s “ecosystem” is the Connect network, which gives artists home pages where they can release content directly to fans. Apple is already scoring major exclusives, with artists from Dre to Keith Richards using Connect to debut new music — striking at a chief selling point of Jay Z-owned competitor Tidal. Apple even helped make music videos for Drake, Pharrell and Eminem. Drake, meanwhile, has reportedly struck an exclusive deal to release new music with Apple for as much as $20 million. “They’re extending themselves aggressively,” says Glass, “to A&R people, to managers, to record companies. They want to collaborate creatively.”

Apple is already the world’s largest music retailer. With its aggressive plays to dominate streaming, not to mention artist development and promotion, the world’s most valuable company seems poised for even more decisive domination of the industry. But no one is ringing alarm bells just yet. “I don’t think they have too much power,” says Miguel manager Troy Carter. And the players inside Apple see a chance to remake a struggling industry. “With the scale, power and resources that Apple has,” says Reznor, “I can think of no company better to be a part of to try and pull this off.”

Additional reporting by Steve Knopper


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