Though details are still sketchy at this point, U2 and Apple disclosed to Time Magazine that they’ve been working on a new Digital format that would spur people to buy more music, hence boosting revenue for struggling artists.
Bono mentioned in a Time Magazine interview that this new digital music format will prove so irresistibly exciting to music fans, it will tempt them into buying music – whole albums as well as individual tracks – once again.
This is definitely no easy feat when free-to-access music is readily available from illegal download piracy sites to plugins that allows you to rip the tracks off music videos on websites like YouTube and Vimeo into mp3 formats.
It’s no secret that music downloads have been declining in recent years with the rise in popularity of streaming services like Pandora and Spotify. These services allow users to stream tracks to their desktop or mobile devices for USD9.99 a month, the cost of which is less than that of an album in iTunes. In fact, the first half of 2014 has seen an increase in music streaming by an astounding 42%, reports iDownloadBlog.
At 99 cents a track on iTunes, after the digital stores and record labels take their cut, artists are usually left with pennies for their work. Streaming services like Pandora and Spotify have the least payouts. A survey undertaken by Business Insider on cellist Zoe Keating’s earnings in 2013, reveals that her tracks were streamed 2.8 million times but received a paltry USD6,301 from them.
Hence, artists still rely on the significant revenue generated through concerts to sustain a livelihood, with fans paying to see the artists live and buying their merchandise.
Speaking to Time, Bono (U2’s lead singer) also said that the new digital music format in the works will help artists who don’t have a large enough audience to fill stadiums for live tours. “Songwriters aren’t touring people,” says Bono. “Cole Porter wouldn’t have sold T-shirts. Cole Porter wasn’t coming to a stadium near you.”
Apple, being notoriously tight-lipped and ultra secretive about future plans, has not divulged further information regarding the new digital music format or the new business model that accompanies its monetization.
However, this isn’t Apple’s first foray into developing new digital formats. Apple Insider reports that the late Apple co-founder Steve Jobs was apparently keen to the idea of a new high-definition digital music format, and Canadian rock legend Neil Young revealed in 2012 that the two were working together on such a project.
Young said the new format would have offered fans uncompromised studio quality sound in the form of digital music downloads, but he apparently decided to go in his own separate direction later on, releasing the Pono music player and a accompanying download service earlier this year.
U2 has had a long history with collaborating with Apple on consumer-facing products like the U2-edition iPod, Product (RED) accessories, and the recent “Songs of Innocence” album release on iTunes where Apple put in a whopping USD100 million in marketing expenses, plus an undisclosed royalty for the privilege of giving away the album to all iTunes users to October 2014. Thereafter, the tracks will get released on other platforms as a paid download, as reported by iDownloadBlog.com.
Their latest collaboration brought mixed reactions. On one end, U2 saw their new album on the iTunes charts when more than half a billion iTunes subscribers woke up one morning and found an entire album in their playlist gratis.
Some U2 fans expressed their gratitude on twitter, simply stoked with the freebie.
Others felt violated.
Even Bin Laden (Parody) had something to say.
Until Apple had to release self-destruct instructions for those that wanted their U2 tunes dismantled worldwide.
This would probably make an excellent example for content marketing, as the campaign has succeeded in building buzz, both online and offline. This buzz will likely see it translate into more of their old albums sold and more concert tickets purchased, as new listeners discover the pleasures of U2 through this new album giveaway.
Come October, when the tracks get released to mobile users of other platforms, I’m pretty sure there would be a good number of people curious enough to want to buy “Songs of Innocence“, after being shut out of this media circus.
As for the new digital music format? I’m guessing Apple is looking to release a new form of compression that allows you to store this new format at the fraction of the a size of a mp3. The new format will of course be readable only by iTunes and iOS mobile devices.
This move might migrate streaming music fans from Spotify and Pandora, whose users have an advantage in avoiding space constraints on mobile devices. But that’s just my guess.