The power dynamic between music and tech has changed. We should be more bullish at the negotiating table.

In the following MBW op/ed, Ran Geffen (pictured), founder of OMA XR content agency and the CEO of Amusica Song Management, suggests that, although the music industry has shown a steady recovery since the launch of iTunes in 2003, music’s value continues to be undermined by the tech platforms it relies on…

At the end of the 19th century, Thomas Ava Edison invented a sound recording machine with a tinfoil format. Alexander Graham Bell took the idea one step further, invented a wax format and patented it. The manufacturing of gramophones didn’t pick up because of the resistance of stenographers, who were accustomed to recording spoken word via the use of shorthand. The game-changer for big tech at the time came in 1888 with Louis Glass’ nickel-in-the-slot ‘entertainment’ cylinders.

Emile Berliner, who invented the microphone and the helicopter, created the disc record and the ability to create mass copies of a recording at a relatively low cost. Later, Berliner established Victor Talking Machine Company and created music record label ‘His Master’s Voice’ to promote the sales of this talking machine.

While the big tech recorded music business was booming, the US Supreme court refused to recognise the rights of composers and publishers in its ruling on the White-Smith Music Publishing Co. v. Apollo Co. in 1908. It wasn’t until the Copyright Act of 1909 – 30 years after the first sound recording was made, and millions of sound carriers and devices were sold, that the US Congress recognised the rights of music creators.

In November 2001 Apple, a boutique hardware company, released the first iPod and offered a niche community of Mac users a way to carry their music everywhere with no compensation to the rights-owners. A year the device interacted outside of Apple OS, a year later iTunes was launched and then came the iPhone. Apple had the world in the palm of its hand. And it all started with music. 

For centuries, music has been the perpetual loss leader for new technology. The landmark moment with Apple at the start of the millennium is perhaps the most famous example in recent history – having been the favoured fodder of online piracy platforms, a badly bruised music business more or less signed away its value in exchange for life support.

We cannot pretend that this complicated, often combative relationship is a thing of the past. Still today, every time a new social media platform takes the world by storm, much of its viral content relies on music, which is used without clearance or compensation. And, when the eventual waterfall of licensing deals are reluctantly signed, they are hailed as hard-fought breakthroughs rather than the standard practice they should be.

Even those platforms that are now considered fully licensed partners of the music industry find myriad ways to discount their offering and therefore undermine the ultimate value of their product – which, let’s not forget, is music.

Of course, all of these platforms – from Spotify to YouTube to TikTok – must build scale before they can deliver revenue. Sometimes discounting can be considered a smart and necessary strategy for achieving that – whether that’s through Family Plans, student offers or low price points in emerging markets.

If music’s value is to be diminished by a tech platform, it must be as an investment with a view to establishing a wider customer base and greater revenues for rights-holders in the long run. The end goal cannot serve the tech company in isolation, with no benefit to the music ecosystem.

In November 2021 Apple – whose interests lie in mobile and wearable tech as well as content – introduced a new ‘Music Voice’ plan, limited to Apple’s voice-activated devices. For half the price of  Apple Music’s premium plan, consumers make certain sacrifices such as stripped UI, no third-party platform support, no music videos, and no lossless audio, spatial audio, or lyrics.

But let’s take a closer look…

Stripped UI: “Apple Music is also adding hundreds of new mood and activity playlists created by Apple Music’s editorial experts that are fully optimised just for voice. Subscribers can ask Siri to ‘Play the dinner party playlist’, ‘Play something chill’ or even ‘Play more like this’ for a truly personalized music experience”. This extract from Apple’s press release clearly states that voice subscribers will get an enhanced experience over the users of the full price plan. Apple added a dedicated section called ‘Just Ask Siri’ where subscribers can learn tips to optimise Siri for Apple (Music) users.

No third-party support: It may not work with Google or Alexa devices, but Voice Plan gives access to Apple Music’s full catalogue across all Siri activated devices. Apple scores a big win against Amazon’s ‘Music Unlimited Echo Plan’ for Alexa users, which provides one license for one device for 3.99 USD, giving another reason to buy or switch to HomePod.

No Music Videos: This essentially means the plan equates to Spotify for half the price.

No lossless audio: This may sound like a concession, but lossless audio on Apple Music’s standard does not work with Bluetooth devices and requires special installation, meaning it isn’t a widely used feature, to begin with.

It seems to me that Apple is offering a new premium music service, and using the Music Voice Plan as a loss leader to train its userbase on its new, state of the art voice UI.

Voice is the future of human-machine interface. Streaming is the main source of income for copyright owners. Has the music business just agreed to halve that revenue where Apple is concerned going forward? Others will surely follow. Is anybody getting a sense of déjà vu?

Crucially, this isn’t the turn of the 19th Century. Nor is it 2001. In the 21st-century, major label groups are turning over billions a quarter and publishers and writers have banks and hedge funds banging on their doors, desperate to talk about their catalogues. The music industry has a bit more weight to throw around – the power dynamic between music and tech has changed. That’s why I feel the music biz should be more bullish at the negotiating table with our tech partners. As many are well aware, the deals we make today will have a grave effect on future income and market value.

In October, Apple declared in its filing to the CRB: “For the sake of the industry, this proceeding must make sure all of the participants in the music ecosystem benefit from the healthy growth in interactive streaming in a fair and balanced way.”

Who will raise his voice and revisit the reduced rate of Apple’s Voice Plan?Music Business Worldwide

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