In one-day battle against Apple, pop star shows her power

Singer has rare ability to influence music business at time of deep anxiety about value of music in digital age

In an age of depressed record sales, her albums sell by the millions. Her tours fill arenas around the world. And a complimentary tweet to her nearly 60 million followers can help kick-start another singer’s career.

But as Taylor Swift's victory in a one-day battle against Apple this week showed, she also has a rare power to influence the music business itself, at a time of deep anxiety among artists big and small about the value of their work. These days, the concern is about the value of music in the digital age, and by taking on Apple – and Spotify before it – Swift has emerged as perhaps the most effective negotiator in the business, for her own benefit as well as others'.

"She is the most powerful person in the music industry," said David Lowery of the bands Cracker and Camper Van Beethoven, and an advocate for artists' rights. "She is able to bring the debate to the mainstream."

Swift reaches the masses through her adept use of social media, whether teasing a new album on Instagram or taking on industry economics on her blog. On Sunday morning, Swift wrote a diplomatic but stern Tumblr post taking Apple to task for not paying royalties on test drives of its new streaming music service, set to open on June 30.


“We don’t ask you for free iPhones,” she wrote. “Please don’t ask us to provide you with our music for no compensation.”

By midnight Sunday, Apple – one of the most powerful companies in the world – had capitulated to the 25-year-old pop star, saying it would pay royalties on all music for the three-month trials. One of its senior executives, Eddy Cue, even said he called Swift personally to give her the news.

Quick exchange

The backdrop to that decision was much more complex than the quick exchange might have indicated. For more than a week, independent labels around the world had been complaining about Apple’s proposed terms, saying that even for 90 days, a big drop in revenue from Apple – by far the music industry’s largest sales outlet – could be devastating.

But even though Cue carefully noted in interviews that the company’s decision had been made with those labels in mind, its hurried announcement late Sunday night suggested that it was Swift’s shaming that led Apple to change its tune.

Dorian Cundick of CEB, a business advisory firm, said that Apple's response to the situation was remarkable for the language of Cue's public statements, which matched Swift's informal but sincere tone. "We hear you @taylorswift13 and indie artists," he wrote on Twitter. "Love, Apple."

“They were speaking a language that people hear as being extremely human in nature, not this big lumbering corporation,” Cundick said.

In her post on Sunday, Swift said she was withholding her latest album, 1989, from Apple's streaming service. Neither Apple nor a spokesman for Swift responded to requests for comment on Monday.

Early grumbles

The company’s new music app, Apple Music – which includes a subscription streaming service, a free internet radio station and a media platform on which artists can upload songs and videos – has been highly anticipated in the music industry. But its announcement this month was also met with some early grumbles from commentators that its many parts failed to add up to a cohesive whole. Then came the resistance from Swift.

It was not the first time that Swift has spoken out about the economics behind streaming music. Last year she withdrew her songs from Spotify, a move that ignited a still-burning debate over how much music should be given away free online.

“I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of this music,” she said in an interview at the time with Yahoo.

The dispute with Apple follows another messy public debut for digital music: earlier this year Jay Z took over the streaming service Tidal with a plan to make a majority of the company owned by artists, but it stumbled after an awkward public announcement and has been on a PR defensive ever since.

By quickly addressing Swift’s complaints, Apple may have found a way to save face and appear flexible.

"Discussing this at all is very good," said Jim Griffin, a digital media entrepreneur and former major-label executive, "reflecting a growing transparency, a view behind the velvet rope."

While Swift's comments follow in a long line of activism, few artists have enjoyed her success in challenging the industry's establishment powers. In the 1990s, Pearl Jam battled Ticketmaster, saying that the company had a monopoly on ticket sales, but eventually dropped its opposition. Frank Sinatra lobbied for years to change the licensing laws over royalties for radio play.

The record industry is still fighting for that radio royalty. But in 2012 Swift's label, Big Machine, struck a deal with the country's largest broadcaster, Clear Channel, that would pay those royalties for the first time; other independents and even a major, the Warner Music Group, followed Big Machine's lead. (Clear Channel is now known as iHeartMedia.)

Subscription plans

Executives at several independent labels, who spoke on the condition of anonymity because their talks with Apple were private, said on Monday that it was still not clear how they would be paid under the free trials. Apple is said to be preparing a per-stream royalty during the free trials that would apply to everyone, these executives said. When Apple’s $10-a-month subscription plans kick in, the company has said it will pay at least 71.5 per cent of the revenue in royalties.

Part of the reason Swift has been able to challenge the music status quo is that she holds an unusual amount of control over her music: Big Machine is independent, and her family owns part of the company. It is a different situation for most artists signed to bigger labels, which often control distribution rights to their recordings, music executives said.

“It’s fortunate for Taylor that she has the kind of deal where she has that control,” said Irving Azoff, a longtime artist manager. “I have a slew of artists that would love to have done it, but their label deals wouldn’t allow it.”

Some of Swift’s supporters believe that her success may partly be a result of the force of her personality – as well as her command of online communication.

"There have been other artists that have spoken up, but it never really got to the masses," said Martin N Bandier, the chief executive of Sony/ATV, Swift's publisher. "They were stifled or not heard.

"But Taylor has been heard," he added, "just by an Instagram or a tweet or a blog." – (New York Times service)