Pay me to Play me

Even when you have 750 million clients and 200 billion in the bank, you can’t play around with celebrities like Taylor Swift! Believe it or not, the power of superstars is even bigger than the power of Apple, and yes, Apple has power!

The reason I am writing once again about Apple is because the company is now double the size of Exxon, worth 769 billion dollars and about 5% of the S&P capitalization. How is it that a company can grow so large? Innovation, new products, and new markets. The way information is shared today affects business.

I feel that Apple is headed to become a trillion dollar company, and still this 25 year old girl managed to quite easily force this giant to its knees in order to apologize. Now, don’t get me wrong. Apple was never afraid of a good fight, and they wars they had with Microsoft’s Bill Gates are legendary. But sometimes you have to know how to choose your battles.

Once launched, Apple’s new music service will eclipse Spotify, the number one streaming music service, with 15 million paying subscribers. According to some reports, it is believed that Apple Music will attain over 60 million paying subscribers within a year. Now try and crunch the numbers, at $9.99 a month per user. I would say it’s quite a substantial revenue stream.

Apple’s first step in the right direction was actually taken with their left foot. They originally announced that they intended to withhold royalties of all artists for the first three months once the streaming music service was launched.

Tim Cooke stepped on the foot of Taylor Swift, who flatly declared - PAY ME TO PLAY ME. Taylor’s outcry was so loud that the whole world heard it. 

Apples Tim Cook is a smart cookie, and acted swiftly with Taylor Swift. He immediately declared that Apple will pay Swift and all artists the royalties due inclusive of the three month trial period. Cook is great strategist, even better then the legendary Steve Jobs was. When a mistake is made, as clearly saw here, he did what was needed to correct it. Tim seems to almost see the future and does quite a great job at helping shape the direction Apple is headed.

Downloading music with your cell phone is just a drop in the ocean of Apples projects for the next generation of business. The huge power of the cell phone isn’t even fully explored yet. It will eventually be used for all commerce shopping, far more than the little bit of mobile ecommerce we see in today’s market. It will far more than an information exchange and navigation tool.

The average American spends more time today with his cell phone than watching television. Obviously, this change in consumer behavior is changing the way people are shopping. Also the allocation of advertisement expenses still invested in TV and newspapers will be all moved to mobile.

 

There is no bigger cell phone branding the world than the iPhone. The short exchange of fire between Apple and Taylor Swift, which Tim Cook had to quickly resolve, only gave the company yet another opportunity to make the headlines. His quick and strategic pull back gave a powerful back stage push to Apple’s newest venture.

It is hard to say if the bad publicity negatively affected Apple's image at all. One thing is for sure, having appeared together with Taylor Swift standing on the side definitely helped introduce Apple's new venture to the whole world -free of charge.

So bad publicity is sometimes as good as positive ones. The main thing is that they are all talking about you.


Leibish Polnauer

 

Best regards,

Leibish Polnauer, President and Founder of Leibish & Co. Fancy Color Diamonds

 

 

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