Business News Labels & Publishers Retail

Labels keep close eye on revenues to assess impact of Apple Music and incoming New Music Fridays

By Chris Cooke | Published on Monday 6 July 2015

It’s set to be an interesting month for record labels as they assess the impact of two big innovations, the launch of Apple Music and the arrival of New Music Fridays.

Because, of course, while there is nothing hugely innovative about Apple’s new music service (even if Beats 1 is doing a very good job of getting people talking), it is the first time the option to stream rather than download a new track or album has been so overtly offered right next to the place where most people go to buy new MP3s (or, technically, AACs).

And, as Peter Robinson asks on Popjustice, when the two options are offered quite so close to each other, why would people chose to pay to have a track on their Apple devices rather than just have it stream from Apple Music, especially while the latter is still free for all

Of course, this was the main reason the indies were so adamant that Apple’s proposed royalty free trial period couldn’t work, because while the rise of the streaming platforms is already hitting download sales, the direct impact of Apple streams on iTunes downloads could be much more pronounced.

Though even with some nominal per-play royalties being paid by Apple during the free trial, the labels will still be watching carefully quite what impact the tech giant’s new musical venture has on their traditional iTunes income and, longer term, whether new revenues from the subscription element of Apple Music properly compensate for that potentially big hit.

And then there is the global release day. As much previously reported, from Friday all new singles and albums will go on sale worldwide at the end of the week, Monday having traditionally been the release day in the UK, of course.

Some labels and retailers still worry the shift to Friday will kill the double spike that some artists and releases benefited from – whereby core music fans shopped on Monday to get the latest releases, with more mainstream consumers, and possibly core fans for a second time, following on Saturday. Will merging these two big pushes into one result in a slip of sales overall? In tandem with a significant new slump in iTunes download income, that could be challenging.

Still, ahead of all the royalty statement dissection that will likely take place in the coming weeks at the labels, record industry trade group BPI published figures from the Official Charts Company on Friday that showed that “consumption” of recorded music was up in the first half of the year, with the streaming boom and slowing CD sale declines resulting in a 4% increase in consumption overall.

Of course, the overall “consumption” metric, replacing old school units sold figures, makes for interesting year-on-year comparisons, though seems even more removed from crucial revenue figures (let alone actual profits, the key numbers often missing from the debate). But with a recorded music industry increasingly dependent on repeat listening to make money, it’s good to know there’s plenty of listening going on. Let’s just hope the monetisation bit can work too.