I am neither cynical nor hopeful about U2. I have given Songs of Innocence a couple of shots since Tuesday and the album seems to be neither a toss off nor a masterpiece. The song that is ostensibly dedicated to Joey Ramone I probably won’t listen to again. The one after it, I most likely will. Albums take time for me to digest, particularly albums by bands I grew up adoring but have since lost interest in. This one will need another week for me if I even decide to return to it. However, as you will soon realize, that choice may not be mine alone.
Before we pass judgment on U2’s audible efforts, let’s get one thing clear: this isn’t about you getting an album, let alone an album for free. There is no free. This is the beginning of a billion dollar plus business cycle strategy. The strategy becomes clearer once you begin to understand the five major items that Apple and U2 get out of “giving” you so called free access to their eleven new songs.
1) Everybody’s Talkin’ — Given the expressions of rapture and contempt that flashed through my Facebook feed for close to 72 hours, let’s consider the promotional aspect of this money in the bank. However, this is only the beginning of the promotion. It’s merely a catalyst for your curiosity or annoyance or both.
2) Welcome to the “Forced Exposure” Mode of Marketing - Remember, distribution is not simply getting your product into the marketplace, but letting people know about it, i.e. marketing. In music and other media goods, this aspect of distribution is THE most significant problem. Because this involves a struggle for your attention for a small amount of a product that may tempt you to listen to/buy more, the competition is fierce because fighting for attention is always a win/lose proposition. In pop music this best understood as a struggle to find time on radio with the idea that a single song may spur on future consumption of albums, downloads, and tickets. U2, now into their fifth decade of performing, has slowly become the choice act of newly-minted grandparents, a demographic no one wants, particularly FM radio. And without a decade with a significant North American radio hit, U2 has learned that this is no longer the option it once was. This is where Apple’s iTunes app comes in. What Apple's technological synergy allows is U2’s label, Universal Music Group (UMG), to exploit the iTunes app by coordinating the streamable-yet-not-necessarily-downloaded Songs of Innocence onto shuffle playlists and genius mixes of many a user. More than one student has already complained to me that U2 effectively snuck their proverbial Sally through the alley of more than one mix this week. And complaint is the operative word. To quote one student, “If I wanted to hear Bono warble, I would take long road trip with my dad.” This isn’t a Trojan Horse. The world’s most famous wooden equine was a “gift” that was at least willingly accepted by the Trojans. Indeed, for any Apple user, Songs of Innocence is not a gift because you may not be able to effectively refuse it.
3) Buying Beats - The reason behind the acquisition of Beats is slowing coming into focus. Jimmy Iovine’s connections within the industry are legendary (more on this later) and his ability to provide a streamable interactive service with significant content and the number one name in headphones means that the Apple Watch you will covet in January will likely be able to provide you Bluetooth enabled sonic stirrings to your tympanic membranes. But connect the dots and it becomes clearer that perhaps the most powerful aspect of this acquisition for Apple was Jimmy Iovine. Until May, Iovine was CEO of Interscope, one of the many labels controlled by UMG, as well as Dr. Dre’s main co-conspirator at Beats music and technology. Iovine’s undisclosed position at Apple is clearly that of part deal broker, part ears, and part liaison with one of three major labels left. With access to some of the world’s most significant talents and musical recordings, Iovine is in a unique position within the tech world to find acts that may allow Apple to experiments with musical product cycles for years to come. For example, let us consider UMG’s control of EMI’s recording catalogue. The ownership alone of The Beatles masters is an almost priceless asset that could allow both the Jobs and Beatles Apple varieties to ripen when another inevitable re-release of that legendary catalogue occurs. Indeed, iTunes will have access to countless amounts of data that let’s Apple and UMG know and locate those most likely to re-purchase — or purchase for the first time — a new remaster of Abbey Road or who might want to simply want to listen to Ringo sing about Octopi and Yellow Submarines. Better yet, Iovine’s leadership and team would be able to take the Beats Music service and measure conversions from streams to downloads and other purchases. These abilities could — most inevitably will — be developed in the near future. However, they will need to be carefully coordinated and Iovine is the key link.
4) Data, Data and More Data - In a way U2 may have been the only band that Apple could have procured to do this experiment. They may no longer sell as many albums as they once did (no one does, by the way), but smart money has that their next tour will clear $1 billion gross. As the band with the largest grossing tour in history (110 performances of the 360 Tour for a total of $736 million), the band’s global presence is unequaled. People who download and play the songs will be targeted must set up an iTunes account (you can stream it without one, or so I am told). In exchange for your email you will be assured of reminders that Bono and company will swing by and make once-a-five-year three-hour musical stop in your metro area. Those that play the album more than a few times will be solicited to upgrade their album experience by purchasing a deluxe retail version from iTunes or the Target of their choice. And even if some of the over 500 million iTunes users do not wish to download U2 or interrupt one of the "songs of innocence," then you will have generated data about who will be less-than-likely to shell out $120 for lawn seats at your local Multicorp Branded Pavilion.
5) Priming the Pump for the Christmas Upsell - As big-box retailers and Amazon clamor for product, their wait until October will be rewarded with CDs loaded with extra tracks, LPs with 180 grams of somethingoranother, and box sets with everything that Universal Music Group decides to sell you. Apple’s “free music”, then, is intended to spur the desire necessary to get those who don’t have iTunes or some variant networked computers (tsk, tsk… not fulfilling you cultural obligations to feed the data farms. For shame!) to wait until their local Wal-Mart (I just love writing “local” and “Wal-Mart” next to each other. So perverse) gets their hands on Songs of Innocence while their obnoxious brother in-law complains that he has these files he hasn’t even paid for. And for those fans who love U2, who have streamed/played Songs of Innocence, will likely have one of these upsell goods suggested to them their Christmas lists through email or some other form of digital communication. Physical goods may seem somewhat ancillary in this strategy, however the margins will be wide and their distribution will be better targeted than before.
So let’s be clear: U2 fan or not, the release of Songs of Innocence is the beginning of what is most likely an almost three year product cycle of global tours and licensing deals that have both nothing and everything to do with you. And while a “with or without you” joke would seem appropriate here, the song most appropriate may be “Two Hearts Beat as One”. With the release of the Apple Watch, their most beautiful and expensive version of a fitbit with a face, Cupertino may know whether or not you are in synch with U2 or any other version of their iTunes/Beats catalogue. And, yes, they will have plenty of suggestions that they hope you will hope enough to download, stream and listen to on the walks to and from your gym, your workplace and your restaurant. If they can get you to buy an Apple Watch for your husband or wife then Apple may indeed find out where they go and what they listen, whether or not you are willing to follow.