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How Apple Hopes to Win the Streaming War

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How Apple Hopes to Win the Streaming War

Drake's "Hotline Bling" video, Taylor Swift's tour movie and the Weeknd's "Can't Feel My Face" have something in common: They've all been funded by Apple. The world's most valuable company has thrown its immense resources into making music videos, concert documentaries and documentaries and, above all, scoring album exclusives. The tech behemoth's top execs are involved in pop-star projects: Apple CEO Tim Cook had a hand in the production of M.I.A.'s "Borders" video.

"Tim weighed in on that one in particular," says Larry Jackson, who is in charge of Apple's original-music content. The most recent major exclusive was Chance the Rapper's Coloring Book, which customers could hear only on Apple Music because Chance has no label and was not selling a download version. "We'd like to be a home where artists can do their thing," says Jimmy Iovine, the longtime record mogul who took over Apple's streaming service after he and partner Dr. Dre sold Beats Electronics to the tech giant for $3 billion in 2014.

Jackson, who had a quick rise in the music business, has been a force driving the company's innovative approach. He credits his time with Apple Music boss Jimmy Iovine at Interscope Records for some of the inspiration: Jackson signed Lana Del Rey, and says that because Del Rey was an artist made for and by the Internet, so rather than spending money on radio promotion, he convinced Interscope to channel her budget all into videos. "We were like, fuck it, let's just make movies. So we made long-form films – that's why [Del Rey's] 'National Anthem' is eight minutes long. Without any singles in radio rotation, Born to Die debuted at Number Two on Billboard and went platinum, which Jackson saw as a vindication of his vision. 

Apple Music has embraced this content-focused approach – but the company is a long way from dominating the music-streaming business, which has grown from $1.4 billion in music revenue in 2013 to nearly $2.4 billion in 2015. According to reports, Spotify has roughly 30 million paid subscribers to Apple Music's 15 million, and while Tidal has around 3 million, Jay Z's service has put out high-profile exclusives from Beyoncé, Rihanna and Kanye West. But Apple, worth more than $586 billion, has something neither of those companies can match: cash.

The two-week Apple exclusive for Drake's Views, in late April, was part of a reported multimillion-dollar deal that included funding the huge "Hotline Bling" video. The company also paid for two versions (one never released) of the Weeknd's "Can't Feel My Face" video last year. Apple had an exclusive for Future's album EVOL in February, launching it with an appearance by Future on DJ Khaled's Beats 1 radio show. "It's a brand that is just undeniable," says DJ Khaled.

"Apple is sexy," says Monte Lipman, head of Republic Records, home to the Weeknd and Ariana Grande. "They are prepared to do things no one has done before. Lately they've been very clever in coming to us with what we consider groundbreaking opportunities." Jackson says that the goal is to put Apple Music "at the intersection of all things relevant in pop culture." Jackson says that the model is "MTV in its Eighties and Nineties heyday. You always felt that Michael Jackson or Britney Spears lived there. How do you emotionally conjure up that feeling for people?"

With Larry Jackson signing deals from his perch at the SoHo House restaurant in Los Angeles, Apple has funded Eminem's "Phenomenal" video and built partnerships with the likes of Keith Richards, the Black Eyed Peas and Selena Gomez. He also cut the deal to produce Taylor Swift's The 1989 World Tour film. Swift says that she and Jackson "brainstormed together, made plans together, edited together." The relationship extended to an ad that featured Swift rapping along to the Drake-Future hit "Jumpman." ("Jumpman" sales increased 431% as a result.)


There have been some misses: Jackson lost a bid to sign Kanye West to a deal for his album The Life of Pablo. Iovine says that West pulled out of the talks and gave the album to Tidal, which he co-owns with Jay Z and other stars. "He wanted to work with his friend, in the end," Iovine says. "It's that simple." (The Life of Pablo appeared on Apple and other music streaming services six weeks later, prompting anger – and a lawsuit filed by a fan.) 


Apple's star-focused playbook goes back to Iovine's tactics with Beats headphones, which included signing LeBron James to a promotion deal in exchange for a stake in the company. "It certainly worked then. But they're not getting the same kind of publicity on exclusives," says Larry Kenswil, a former Universal digital exec. "So the jury's out."

For now, though, top artists and managers are the beneficiaries. "It's just a partnership to do cool shit," says Anthony Saleh, Future's manager. "It's almost like getting paid to wake up and eat breakfast – you're going to do it anyway."


Lipman admires Apple's "sense of adventure, their aggressiveness." To illustrate that, Jackson likes to repeat a story from Iovine: "There are two buzzards sitting on a wire; one buzzard's sit- ting up there waiting for something to die; the other buzzard's saying, 'Fuck this waiting-to-die shit, let's go kill something.' That's the philosophy. You just have to go and get it done." 

 

Topics: Apple

 
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