Wednesday, September 24, 2014

Apple, U2, and Hubris

By most accounts, Apple and U2's release of the new U2 album during Apple's Watch announcement was a disaster.

Now, a few weeks later, we can safely approach the wreckage. Surveying the smoking ruins, one comes away thinking "It didn't have to turn out like this."

Instead of being excited and grateful about a surprise free new album from one of the world's biggest bands, the media and public responded with a sense of outrage.

Instead of thanking Apple and U2, people demanded ways to purge the gift from their collections, and Apple dutifully responded.

10 years ago, Apple and U2 had a similar team up and event, based around the announcement of the U2 iPod. It was sort of weird, but still made sense, and was far more successful.

What happened? What's changed?

10 years is a long time for a person. It's even longer for a pop act or a company. In that 10 year period of time, Apple went from being a scrappy underdog having success in the music business to being the music business. Apple rose to be the best-funded company in the world, and has become the dominant market leader in a number of categories. And Steve Jobs died.

U2 went from being a band with a promising late-career comeback (started with 2000's "All You Can't Leave Behind) to a typical late-period band appealing only to its hardcore followers while mainstream audiences move on.

Perhaps more importantly, the world changed around Apple and U2, and they were both blind to the implications. They've both become out of touch with the world around them.

The result was that Apple and U2 made some obvious, avoidable mistakes.

Mistake: No reason for this collaboration other than promotion.

When Apple and U2 collaborated last time, there was a new U2 album and a special hardware product. That sort of project would have been perfect for an album giveaway, especially back 10 years ago when purchased downloads were less commonplace than they are today.

This time around, there wasn't any clear connection. Apple announced some software upgrades and a watch. There was no U2 edition of the watch, or anything else. It was just bizarre: "here's the exciting product you've been waiting for...oh, also, here's U2 playing live and a free album."

People instinctively understood this was empty spectacle. Apple probably expected the performance and free album giveaway would attract lots of attention (and it did, just not the kind they wanted). U2 probably expected everyone to be grateful or thrilled they were getting a free album, and U2 could claim they shipped 500 million copies, just like Jay-Z went immediately platinum thanks to Samsung.

But there was no obvious connection between the two events, and that made it seem cheap.

Mistake: They didn't ask permission. 

Both Apple and U2 assumed that people would be thrilled with having the new U2 album inserted into their collections. 

People weren't thrilled. People felt violated and creeped out, as if Tim Cook and Bono had broken into people's homes and left a copy of the album on their pillows with a note that said "We are watching you. Enjoy!"

Early on at Rhapsody, it became clear people considered their virtual collections and disk space (PC and mobile) to be their property. People became really angry when that property was tampered with. I find it astounding that Apple, with all their research and "understanding what users want", did not see this coming.

That forcing of the gift not just onto people, but into their library, chafes. It's like coming back to your car and finding flyers under your windshield wipers. Or having people on the street pushing brochures at you. You feel as though your personal space is being violated, and you immediately discount whatever's on offer.

I likened it to how many San Franciscans feel about the SF Examiner, a paper that seems almost maliciously delivered every Sunday, and cannot be stopped, short of legislation.

The easiest solution is also rather simple, and what's known in the industry as an "opt-in": They should have offered the album to people for free, and had users that wanted it to click on a button in order to get it.

They didn't do this. Probably because they wanted the bragging rights of "moving" 500 million albums. Or possibly because they were just tone-deaf, and assumed "of course everyone would want the new U2 record!"

Mistake: Insufficient Messaging

I actually like U2, and was really excited to hear the new album. I am also something of a digital music business expert. I started iTunes and went to the store to look for the album. It wasn't available in the store. I couldn't even find it on the home page of the iTunes store.

It took me about 20 minutes of poking around before I realized that Apple and U2 had literally just "added it to my collection", and on my work machine, that's over 6000 songs. There was no playlist or badging or other indication. It just magically appeared, and then got lost with all my other music.

And if you weren't someone who actually followed Apple's press announcements (but left your iPhone and iTunes at default settings), the album's songs would be mixed in with whatever else you were playing in shuffle mode.

This is a terrible experience, across the board. Why give someone a gift without explicitly handing it to them, wrapped up, with some ceremony? Did Apple and U2 really believe they were so important that all 500 million people would be paying attention to these announcements?

This could have been mitigated with email, in-store messaging, and perhaps some other in-iTunes guidance for how to find and play the new record.

Mistake: Totally Free * 500 million copies = 0

There are plenty of artists and pundits who claim the "music business" has been devaluing music for years.

Here comes Apple and U2 - a company that represents about 2/3 of the music business now, and one of the world's biggest bands. They immediately take a record with clear, tangible value - 5 years of work, from a major artist - and dump 500 million copies on the world. That's like 5-10 times the number of copies Michael Jackson's "Thriller" sold. Should be great, right?

Well, for one thing, they immediately demolished the concept of scarcity. There was nothing to be gained by saying you heard the new U2 record. You literally couldn't get away from it. It's already on your phone. Just like everyone else's. If everyone has something, it is literally commonplace, unexceptional, mundane.

It has been said that what is free has no value. Apple and U2 took a new album by a major artist and made it feel about as valuable as a piece of junk mail. This is devaluing music taken to a new level. If U2 won't charge people for its new album, why will anyone pay for anyone else's record?

Rumor has it U2 was paid about $100 million for the album. At 500 million copies, that's 20 cents a copy. Think about that, all you struggling artists. That's the bar now, lowered by these 2 industry titans. How's Spotify looking now?

I'm not sure what the bigger mistake was: giving it away for free, or giving away 500 million copies.

Mistake: No matter how good the album was, it felt disposable.

All of this completely obscures any reasonable comment one could make about the album. U2 instantly forces people to grade them on a curve: is it good or bad "for a free album"? Is it even a real record? Most of the charts services say no!

Regardless, since this was delivered to people unasked, it feels inconsequential and trivial, perhaps not even worth the time it takes to listen to it once.

The result here is that the only people who will buy this new album are the die-hard fans...and U2 has even alienated some of them, because many people buy their music in digital form. And those people already have a free copy.

Most phones and other devices people buy come with some free intellectual property. Phones often have 10-30 songs by no-name aspiring artists, or credits to download or stream some barely recouped almost-blockbuster movie.

People typically recognize this for what it is - cheap content filler designed to raise the perceived and marketable value of the phone. But nobody cares, because it's unasked for and inessential.

Courtesy of this promotion, Apple and U2 immediately made U2's new work feel just like that.


Both the teams behind Apple and U2 were likely convinced they were going to succeed, that these big expenditures were worth it. They never questioned whether or not the rest of the world felt and thought like they did.

Apple is no longer a scrappy, rebellious, cool company. They've grown up, and become a kind of fascist gray monolith. Their recent acquisitions of companies like Beats and fashion designers suggests they are moving in some very different directions. For one thing, they believe they can talk you into wearing a $350 calculator watch because they say it's cool.

U2 is also long past their prime. I am sympathetic. It's hard to have a long career being creative, relevant, and popular. They've done about as well as anyone could. As a fan, I'd love to hear new music from U2 that excites me, since the last record of theirs that I really loved came out in 1997. Still, their last several moves (including relocating for corporate tax purposes) seem really at odds with the image they'd like to project.

I can see how Apple and U2 thought this would work out, as they sat in fancy conference rooms hammering out their spectacular deal. A combination of "aren't we clever and brave", Shelley's Ozymandias, and a genuine desire to do something fun and cool.

Instead, it felt like your out-of-touch grandparents giving you a terrible CD for a birthday present because they heard you're into rock music.

I watched the whole thing live. With the sound off, it looked like a bunch of old white men desperately trying to remain cool.