In the increasingly crowded world of music providers, Apple is looking to distinguish themselves from their competition by asking artists for exclusives streaming deals.
The recent request from Apple to major music artists is an effort to help their streaming music arm, which is Beats Music. Since it was bought in 2014 for $3 billion dollars, it has been dormant, but is expected to re-launch in the summer of 2015. Meanwhile, other companies in the streaming space have been making waves. Spotify continues to increase in popularity and Tidal, the new streaming platform owned most notably by Jay-Z and others, grabbed headlines with its announcement, press conference, and price point.
Streaming is arguably the most popular method people listen to music and the providers are looking for a way to increase their market share in the industry. Pandora, Spotify, Rdio, Deezer, YouTube, and Tidal, are just some of the platforms battling for prominence in the streaming industry. The Recording Industry (RIAA) report on music industry revenues shows physical sales at 32%, digital downloads at 37% and streaming at 27%. In the RIAA’s 2013 report on the music industry revenues, streaming was at 21%, digital downloads was at 40% and physical sales at 35%. Both reports show access to music through streaming and subscriptions continues to be where growth is happening for the music industry.
Recently, it was reported Jay-Z removed his music from Spotify and placed it exclusively with Tidal. Most famously, Taylor Swift refused to put her music on Spotify, but did place it with Tidal as well. The exclusivity issue also pertains the issues musicians have with streaming music and the royalties they receive from those providers. For years the battle has been waged in the media and the halls of Congress, between streaming music providers and musicians seeking a better compensation. If they have to pay more in royalties, it will damage their business model. Musicians and their representatives claim they pay they receive now is paltry. Rosanne Cash told a media outlet that despite her song being streamed 600,000 times, she only earned $114. As the streaming providers duke it out, royalties and exclusivity will be big issues in who wins the war.