The One Problem With Apple One
This week, Apple announced its Apple One subscription, which, depending on which level you choose, include varying iCloud storage, Apple Music, Apple Arcade and Apple TV+. If you go for the Big Kahuna version, it has the new Fitness+ service and Apple News. How much is this all, the individual plan which is US $14.95/m, Family at $19.95/m and Premier at US $29.95. It’s incredible value for consumers but a veritable kick in the guts for artists.
Why are we demonetising the dominant cultural force our civilisation has ever known — Music? Suppose we take a look at the individual plan. In that case, the Apple Music component equates to just US $3.73 a month, with Family and Premier plans devalue music further to US 99 cents/m per person. I don’t know the exact numbers, but if we assume one of the five users on the Premier Plan plays 50 songs per day, that works out at some 1500 songs a month which brings the per stream value to 0.06 cents Gross revenue for Apple on a per user per stream basis. There are many mouths that take from that 0.06 cent cup, the last of which is the artist.
The issue here is that technology has a habit of demonetising “stuff”. The price of Hard Disk storage per Gigabyte always goes down, because we improve manufacturing processes, increase density per inch on a metal platter spinning at 7000 rpm. The cost of computing (millions of instructions per second) comes down over time for the same reason. The cost of compute is now at the point where we expect some form of compute in every room in the same way we expect electricity. Compute is everywhere from smart speakers, smart tv’s, intelligent lightbulbs and smart thermostats. Technology is able to do it with such things because the cost of producing those units over time, costs less. In 2008, a 128 Gigabyte Solid State Hard Drive would set you back US $800, today its costs less than a carton of beer. Buying Def Leppard’s Hysteria still costs about AUD $30.00 after 33 years.
Apple, being a hardware manufacturer, apply the same economy of scale that apply to hardware on the Apple One plan. You can bundle hardware features, because the cost over time to do makes it practical to do so. But you cant apply that same logic to music for one straightforward reason. Human Capital.
Robots build computers. As far as I know, Robots aren’t writing music (all sarcasm aside). Look it is true, that people do produce hits sitting at home in Garage Band like Owl City, who had the hit Fireflies. There is some truth that you can get great results out of a home studio for less than US $2000 bucks — but that reduction of cost comes through decreased equipment costs. Add humans to that, and it gets expensive. But it still takes time, and there are still costs involved like getting it mixed and mastered professionally not to mention distribution. Sadly, the distribution market is loaded full of sharks — charging more than US $45 a month to publish your tracks to Consumer Digital Service Providers (cDSP). Most industry types will tell you its somewhere between US100k and $1M to produce an album.
Spotify, on the announcement of Apple One immediately raised a red flag, they missed the opportunity to “but what about the artist” they made it about developers. I suspect Spotify’s concern is more based on the fact it is a one-trick pony, like Deezer and every other pure music service — Apple just kneecapped competition. Spotify still hasn’t made a profit and sadly with tech companies, with music, its a race to the bottom.
OK, “But bundling music with other services might be great value for consumers,” you say. Still, in this, the music, which through streaming is commoditised enough, you’re taking its human capital worth to whole new levels of low. It’s a tough call already, don’t make it worse by bundling it.
Everything is permissible but not everything is beneficial. It’s permissible that technology commoditises music but is it beneficial? We’ve not commoditised Lawyers or Accountants. I cant pay $10/m, and have access to any Lawyer in the world or pay $10/m to have access to any accountant in the world and have my tax done every quarter. There are tens of thousands of Lawyers in the United States, but just because there are many of them, doesn’t mean the work they do is worthless. They provide a service. The same is true of accountants, plumbers, architects etc. We wouldn’t commoditise human capital like the above mentioned because it’s not beneficial to do so. Lawyers and accountants use technology not to reduce their fees but rather give you better service — a better experience. But the reason we have $1000/hr lawyers is we’ve placed a different value on the service they provide and technology cant replace them… yet. But I promise you, the artist sitting in their room writing music is equally passionate about his work as the young lawyer studying.
And here comes the sober crux of my point. Artists provide a service. We used to reward that service with buying their records. They enrich our culture, our lives. They help us express what we can’t find words for; they make great nights out memorable. They provide anchors to our most precious memories. A world without Lawyers is bedlam. A world without music has no soul.
