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Apple accused of pressuring the record industry to abandon freemium streams

By Chris Cooke | Published on Tuesday 5 May 2015

In this busy world in which we live it can be hard to keep track can’t it? For example, who is the bigger cunt: Apple or Google?

I mean, they’re both adept at the “look at us, all cuddly and quirky and innovating” shtick, when you know what they really mean is “give us your money, give us you money, give us all your fucking money, we’ve got pies to eat”. But Google boss Eric Schmidt is more prone to wear a jacket than Apple chief Tim Cook, meaning you’re more likely to glimpse the inner cunt at the former than the latter.

But that doesn’t mean Apple’s core isn’t a bit cuntish too. And as proof of that, there were more credible reports this weekend regarding what many have suspected for some time: that the IT giant might be putting pressure on the major record companies to bail on freemium streaming services.

Because while it seems certain that, ultimately, the freemium levels of services like Spotify and Deezer will have to be stripped back – to enable a ‘medium’ paid level to emerge between freemium and premium – initially it seemed unlikely that the majors would rock that boat too much this side of any IPO at the streaming start-ups.

And not without first addressing the bigger problem facing the evolving streaming sector, ie those services that sit in the grey zone between legit and non-legit, aka YouTube, SoundCloud and Grooveshark (may it rest in peace).

But then the chatterboxes started saying that Universal was driving a very hard bargain indeed with Spotify, whose licensing deal with the mega-major was up for renewal. Was the record company annoyed that a new round of fundraising at the Spotify company meant the widely anticipated stock market flotation had been pushed back a year or two (putting off the day the major can cash in its shares)?

Or were the cunts at Apple meddling? After all, the top guard at the IT giant are presumably desperate to ensure they don’t fuck up their second go at streaming music (ie iBeats, the follow up to the lacklustre iTunes Radio).

And while the iTunes platform still has massive market penetration when it comes to digital music at large, launching a fully on-demand streaming service without a freemium option – into a streaming market dominated by the free platforms – is always going to be tricky.

The team at Beats know this – you can have all the Ellens you like, gurning during every Super Bowl in existence – it’s still hard to get premium sign-ups without a loss-leading freemium service to hook people in. It’s why paid-for Spotify has grown faster than more or less all the competing premium services.

But running a freemium level at loss is expensive, even when you negotiate tiny royalty payments with the rights owners. And while Apple has very deep pockets indeed, it doesn’t want to dig too deeply into them just to prop up its new music platform.

And so we come to the reports this weekend that Apple is under investigation in the US by both the Department Of Justice and the Federal Trade Commission over allegations it has been using its market power to pressure the major record companies to force Spotify et al to abandon freemium. Presumably in a bid to totally overhaul the streaming market so to make it a much more friendly place into which to launch an iBeatsRadioStreamTunes (or a new piracy platform for that matter, if any of you have one of them in the pipeline).

According to The Verge, the DoJ has already interviewed high-level execs at the major labels about Apple’s business practices, and now the FTC is taking the lead. The New York Post had already claimed that the European Union’s Competition Commission is probing the tech firm regards its alleged meddlings in the streaming music space. And The Verge now cites one label source as remarking regards Apple’s negotiating tactics: “All the way up to Tim Cook, these guys are cutthroat”.

Though on the upside for Spotify et al, they do have an enemy in common with Apple in the form of the aforementioned YouTube. We know that whenever you tell Spotify to cutback freemium it points to the fact that doing so will simply send users to the Google video platform, where the royalties are even lamer.

Apple’s solution to that problem? Well – gossipers say – the IT giant would just pay the majors whatever YouTube gives them to have the labels’ content pulled off the Google site. Though it’s not clear whether that would include the cost of managing the record companies’ Content-ID accounts to keep music off the video platform and/or paying the most expensive of Washington’s lobbyists to get copyright law rewritten to screw up YouTube’s entire business model.

So there’s your silver lining, Spotify fans. The cunts at Apple could use their cuntishness to stop the cunts at Google from being so cunty. Good times.