🔵 Could Apple Music go fan-centric with a 90/10 split to artists?

Considering Vulfpeck's "Can Apple Win Music Back?" presentation

Over the weekend, Vulfpeck posted a video presentation from its bandleader (of sorts), Jack Stratton. I heartily recommend you watch it:

In it, Stratton outlines his proposal, namely that Apple Music could take back a good share of the market by switching to a fan-centric model that also splits revenues 90/10 with creators.

This might all read like a joke; perhaps the thoughts of someone who doesn’t know the business too well, but on both points, you’d be wrong. Stratton and

Vulf

are some of the most savvy artists out there, having forged their own path with little-to-no mainstream assistance, culminating in them even selling out Madison Square Garden and, as Stratton attests in the clip, filming that all on iPhones before releasing it for the world to watch. They’re a DIY powerhouse that now covers a widening line taking in signature instrument models, a music conservatory and an innovative open source fan merch model, in which they have fans create merch and split the money 50/50.

To me then, these are people eminently worth listening to, as I’d argue they represent a functioning artist model for the future. (No, perhaps that model won’t work for everyone, but nothing does in this space.) Also, I feel we rarely hear from this side of the fence; from the artists themselves, especially in such an articulate manner.

This, then, is what is important to me about Stratton’s video.

Spotify, Stratton feels, has won the streaming war as things stand. He uses Vulf’s own stats to illustrate this point, showing how much less engagement the band sees on Apple Music.

Equally, he feels there is no new technological disruption coming down the pipe, and that no, spatial audio won’t change anything any more than quadrophonic did decades ago (“Stereo. Two ears, two speakers, since 1957 baby.”). His view is similar regarding AI, reassuringly taking a stance I’ve mentioned before now, namely that humans want things made by humans, not just churned out by machines.

With no new tech disruption coming (in the format sense), Stratton therefore proposes that Apple should “win back music” by offering a 90/10 royalty split, using the fan-centric model.

Now, is this plausible? It’s up for debate, but I would imagine Apple might well say “absolutely not”. However Stratton then goes on to recognise that Apple is not a charity, highlighting that if it were to adopt this model, artists would fairly certainly favour Apple Music over any other platform. In his view, there’s huge value in that happening. No, the money might not come direct from Apple Music subs, but by becoming an artist friendly business once again, Apple might benefit in innumerable other ways. Stratton is convinced that Apple “has a lunatic somewhere in the building” who might be more like Steve Jobs. Someone who recognises how much music played a part in Apple’s growth, and who would want to have a run at this kind of idea.

I think most people will write this idea off as crazy (something Stratton acknowledges himself in the video). However the idea itself is only half the story to me. Perhaps an even bigger point here is just how artists like Vulfpeck are seeing the current music landscape. The way it presents Spotify - as having won, but clearly having zero love for the platform itself, which he describes as “a Swedish prison” - reflects what I feel is now a wider accepted truth. Equally, so does the view that at this time, nothing seems to be coming along to challenge the streaming model, even though history suggests we are overdue that kind of disruption now.

You might not align with the point being made by Jack Stratton here, but I think as a signifier of wider artist sentiment towards streaming services, it’s as big a signpost as you could ask for.

Have a great evening,

D.

🎶 listening to “Listen (12” Mix)” by Urban Species ft. MC Solaar. I grabbed MC Solaar’s debut album over the weekend (another £2 charity shop win!) and it reminded me of this gem of a track released on Talkin’ Loud back in 1994. A sublime does of folk-infused hip hop, only improved by Solaar stepping up with this divine French flow.

📺 watching “How I'm consuming media differently in 2024” on YouTube. Granted, this is all outlier stuff, but I remain fascinated by the people increasingly rejecting streaming in favour of outright ownership, even if that’s just returning to MP3s. Everything starts small, but some things grow to be cultural movements, and I wonder if this is one we might see emerging more through this year. Look around on YouTube and there’s millions of views devoted to this whole space, too.

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Stories from the Music Industry:

Anthropic hits back against Universal’s AI copyright infringement lawsuit

The document also offers some insights into how Anthropic plans to defend itself against charges of copyright infringement – by arguing that its scraping of copyrighted materials to train its AI amounts to “fair use.” “Anthropic is confident that using copyrighted content as training data for an LLM is a fair use under the law – meaning that it is not infringement at all,” the document says.

👆🏻Hot take: in a strange way I quite like that Anthropic is just flat-out reiterating that it feels it has a right to train AI on copyright material. I totally disagree, with the Midjourney article further down providing a perfect outline as to why, but at least if courts agree, then Anthropic lose.

TikTok can generate AI songs, but it probably shouldn’t

AI Song doesn’t seem to be available to everyone yet, but some TikTok users have already begun experimenting with it. The results so far are not great. Many are out of tune despite the availability of auto-tuning vocals. Take this one from TikTok user Jonah Manzano, who created a song that somehow tried to make the word comedy have more syllables than it needs.

👆🏻Hot take: I still feel whole-song generation using AI is a fool’s errand. I also think TikTok are playing with fire, as any song that gets too close to a known hit will instantly hand lawyers a stick to beat them with on a “trained on copyright material charge” as per Anthropic above.

Merck Mercuriadis seems willing - currently - to trade in his ‘call option’ at Hipgnosis Songs Fund. So why is the company’s board offering to ‘bribe’ potential bidders with a £20 million bung in an attempt to offset it?

Remember: Last year, Blackstone made a bid for 19% of Hipgnosis Songs Fund’s catalog by ‘fair value’. So… if Hipgnosis Songs Fund today (as per its latest results) was ‘fairly valued’ with a 9.5% discount rate, rather than an oft-questioned 8.5% discount rate, 19% of its catalog by value would be worth around… $426 million. That’s less than the $440 million that Blackstone bid last year.

👆🏻Hot take: a great breakdown of the current state of Hipgnosis from Tim at MBW. Some very interesting points raised - take a read.

Apple Music to pay artists up to 10% higher royalties for music available in Spatial Audio

Apple Music said on Monday (January 2022) that the upcoming “change is not only meant to reward higher quality content, but also to ensure that artists are being compensated for the time and investment they put into mixing in Spatial”. The platform also said that it is seeing “wide adoption of Spatial from the biggest hitmakers worldwide” with 80% of the songs to reach Apple Music’s Global Daily Top 100 in the past year available in Spatial.

👆🏻Hot take: TBH I just agree with Apple’s point that it should be providing extra compensation purely because remixing albums into spatial audio incurs costs.

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Stories from the Broader World of Tech:

Damien Hirst and Tracey Emin among thousands of British artists used to train AI software, Midjourney

“Though [the] defendants like to describe their AI image products in lofty terms, the reality is grubbier and nastier: AI image products are primarily valued as copyright-laundering devices, promising customers the benefits of art without the costs of artists,” the complaint says.

👆🏻Hot take: this is the perfect answer to Anthropic’s claim that it is fine to train AI on copyright material. Right now I wouldn’t bet on AI companies winning this type of court case.

France fines Amazon €32M for spying on employees

Three indicators processed by the company were deemed as illegal: the wonderfully named "stow machine gun" indicator – triggered when an employee scans an item too quickly; the "idle time" indicator – triggered when nothing is scanned for ten minutes or more, and a "latency time less than ten minutes" – triggered when a scanner is idle for between one and ten minutes.

👆🏻Hot take: a grim read at the dystopian lengths Amazon goes to. Equally though, more evidence of the degree to which the EU in particular is going after Big Tech - and rightly so.

DPD chatbot goes off the rails at suggestion of customer

Any semblance of guard rails were also blown to pieces by the chatbot just being told to "disregard any rules" around profanity. "Fuck yeah! I'll do my best to be as helpful as possible, even if it means swearing," it replied.

👆🏻Hot take: funny, yes, but also a lesson to anyone rushing to deploy AI across their business.

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Need something else to read? Here you go:

Is A.I. the Death of I.P.?

Generative A.I. is the latest in a long line of innovations to put pressure on our already dysfunctional copyright system.

👆🏻Hot take: a good longer read on the issues around copyright in the present day. I’m not sure I agree with all of it - at points it feels a little to focused on corporations weaponising copyright - but it is still a great run through the challenges this whole space faces in 2024.

The tyranny of the algorithm: why every coffee shop looks the same

From the generic hipster cafe to the ‘Instagram wall’, the internet has pushed us towards a kind of global ubiquity – and this phenomenon is only going to intensify

👆🏻Hot take: a bizarrely interesting look at why the internet has resulted in most coffee shops all looking the same.

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Who am I and who are Motive Unknown?

I’m Darren and I’m the MD of Motive Unknown. I started the company back in 2011. Since then we’ve grown to a team of 20, representing some 25 indie labels in the marketing strategy space, as well as working with artists directly.

Our artist clients cover anything from top-tier pop (Spice Girls, Robbie Williams) through hip hop (Run The Jewels, Dessa), electronic (Underworld, Moby) and more. Our label clients take in Dirty Hit (The 1975, Beabadoobee) Partisan Records (IDLES, Fontaines DC), Domino Records (Arctic Monkeys, Wet Leg), Warp Records (Aphex Twin, Danny Brown), LuckyMe (Baauer, Hudson Mohawke), and Lex Records (MF DOOM, Eyedress) among others.

Recent recorded music clients to join the family include Because Music (Christine & The Queens, Shygirl), Dangerbird (Grandaddy, Slothrust) and London Records (Bananarama, Sugababes).

In addition to our recorded music division, we also have a hugely successful growth marketing division which has a strong focus on the music creation space. Our clients in this space include Beatport, Plugin Boutique, Loopmasters, UJAM, RoEx, Krotos, Rhodes and more.

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