Anyone else think Apple is going to become a "record company"

[kilcher]

It's kind of the impression I got during the keynote the other day. Apple now has iTunes, Apple Music, and Beats 1 (which I could see growing into an XM competitor). Their apps are on a billion devices w/ 800 million credit cards on file. They spent a lot of time during the keynote promoting the ways new artists can use Connect and how Beats was going to focus on what's good, not just what's popular. Iovine has a strong industry background so I could see him pushing for this. They've also been hobnobbing with a lot of musical "talent" lately (though that seems to be a trend w/ Apple over the last year - celebrities in general).

Not sure of the legal ramifications of this but if Apple were to sign artists directly they could presumably split the record company profits between Apple and the artist, basically removing the middle man, and leaving more money for both. One could argue artists no longer need mainstream radio play or the distribution of physical media. As far as I know that's a big chunk of what record companies provide. Signing with Apple (and all they have to offer) could also give Apple some form of exclusivity - an advantage over other services.

It's possible Apple will just use this leverage to get more money out of existing record companies but I wouldn't be surprised to see them start signing artists at some point, especially if they can get them early and promote them on their services.

May be 5-10 years off but I definitely think it could happen. It would be interesting for sure.

 

[kwokaaron]

That's an interesting thought, but I believe this move was brought on more because of the increasing threat posed by music streaming. By providing this service (as well as other additional services all in one place), they essentially remove the need for Apple users to sign up for 3rd party services such as Spotify since most users already have their payment details and accounts with Apple; Tying customers further into their ecosystem. Just my thought though.

 

[roadbloc]

Isn't there already a record company called Apple?

 

[Jessica Lares]

No.

Existing music labels don't even want to take the gamble on a lot of "great" music.

 

[Raid]

Well Apple likes to be involved as the distributor of music, as for producer or marketer... NO!

There's this long standing legal fracas between Apple Records and Apple (nee: Apple Computer). While that has cooled down to a point where finally Beatles albums are on iTunes, it was a long and winding legal road that I don't think Apple wants to travel again.

 

[ApfelKuchen]

Hope not, considering how well Sony's done at it.

Any time a retailer decides to become a producer, the retailer risks relationships with its suppliers (which includes all those developers in the audience). And if you're in competition with Amazon and Google Play, one thing you can't risk is 'selection.' It's never about what you do have, it's always about what (or who) you don't have.

None of us know what's in Jimmy Iovine's heart, but he certainly knows the perils of the content business. He's had a legendary ride as a record exec, so there's nothing for him to prove there, likely no new worlds to conquer. He doesn't seem the type to yearn for a return to the "simple life" of a startup record label. Beats, and then Apple read like "new chapter" moves, to take his established talents and contacts in a new direction.

The point of Connect is to woo the content providers; to give them a reason to prefer Apple over Amazon. For fans, it's about delivering coolness factor. I'm not convinced that any one retailer can make itself the go-to destination for artist/fan interaction (every artist/label/developer wants to be in total control of their social media platform), but it doesn't stop any of them from trying.

 

[placidity44]

I don't think so but that's a great thought! Made me think.

 

[maflynn]

Apple isn't interested in finding musicians and producing music but rather selling music. Plus apple records would not permit it, they'd head right back to court

 

[impulse462]

Well Apple likes to be involved as the distributor of music, as for producer or marketer... NO!

There's this long standing legal fracas between Apple Records and Apple (nee: Apple Computer). While that has cooled down to a point where finally Beatles albums are on iTunes, it was a long and winding legal road that I don't think Apple wants to travel again.

 

[rhett7660]

Apple isn't interested in finding musicians and producing music but rather selling music. Plus apple records would not permit it, they'd head right back to court

Do you know if they could have a "child" company that makes music?

With some of the folks they are bringing on, know quite a bit about music and the engineering behind the music (Dre, Trent) and I wouldn't be surprised if they have some other folks working with them. Not saying they will being a company, but I find it interesting.

I mean heck, did anybody think Netflix or Amazon would be doing their own content?

 

[Tech198]

I don't t think Apple wants to get into trouble.

 

[nebo1ss]

It's kind of the impression I got during the keynote the other day. Apple now has iTunes, Apple Music, and Beats 1 (which I could see growing into an XM competitor). Their apps are on a billion devices w/ 800 million credit cards on file. They spent a lot of time during the keynote promoting the ways new artists can use Connect and how Beats was going to focus on what's good, not just what's popular. Iovine has a strong industry background so I could see him pushing for this. They've also been hobnobbing with a lot of musical "talent" lately (though that seems to be a trend w/ Apple over the last year - celebrities in general).

Not sure of the legal ramifications of this but if Apple were to sign artists directly they could presumably split the record company profits between Apple and the artist, basically removing the middle man, and leaving more money for both. One could argue artists no longer need mainstream radio play or the distribution of physical media. As far as I know that's a big chunk of what record companies provide. Signing with Apple (and all they have to offer) could also give Apple some form of exclusivity - an advantage over other services.

It's possible Apple will just use this leverage to get more money out of existing record companies but I wouldn't be surprised to see them start signing artists at some point, especially if they can get them early and promote them on their services.

May be 5-10 years off but I definitely think it could happen. It would be interesting for sure.

There is a legal agreement between them and Apple Records which says they can never do so. At least not under the name Apple.

 

[Admiral]

With some of the folks they are bringing on, know quite a bit about music and the engineering behind the music (Dre, Trent) and I wouldn't be surprised if they have some other folks working with them. Not saying they will being a company, but I find it interesting.

If we see that Edgar Bronfman has joined the company we'll know it's time to bail.