As seen on The Guradian
U2 surprise-release of their new album – for free – last night for iTunes’ 500 million customers globally could be read as a band was no longer certain of their place in the paid music market and so chose to hide behind a marketing gimmick of faux benevolence. But, more realistically, it could also mark the last gasp of a major act using iTunes downloads as the main way to get their music to a mass audience.
Because it’s free until 13 October, when Apple’s exclusivity period ends, Songs of Innocence will not be eligible for the chart. By the time it goes for sale at other retailers such as HMV and Amazon, most of U2’s core fans will have got it already, meaning it is doomed to limp to a considerably lower chart placing than the band are used to.
A moderniser would argue that the charts are an increasingly anachronistic way to measure success in the modern recorded music business that has been redefined by Spotify and YouTube. A cynic, however, would suggest that U2 looked at the speadsheet for their last album sales in mounting horror and realised the jig was up. No Line on the Horizon (2009) could have been called No Sales on the Horizon because it shifted a, for them, dismal 384,954 copies in the UK. Their previous album, How to Dismantle an Atomic Bomb (2004) sold 1.25m while 2000’s All That You Can’t Leave Behind sold 1.15m.
The band make most of their money from touring anyway, and their 360°tour, which stretched from 2009 to 2011, clawed in $736m across 110 shows, making it comfortably the highest-grossing tour of all time, according to Billboard. So record sales are almost incidental to the piles of money U2 generate.
The bigger play for the band is clearly to get back on the road and see if they can break their own touring record, and getting a new album out with maximum publicity is the quickest justification for them to tour. So the iTunes deal could merely be a deft way to promote a lengthy world tour, with an announcement coming soon, because they will be keen to strike while the marketing iron is still hot.
As a man who has never seen a pound note he didn’t like, Bono was at pains to point out that U2 and Universal Music, their record company, got paid for this giveaway by Apple. Writing on the band’s official site, he said: “You’ll have noticed the album is free … Free, but paid for. Because if no one’s paying anything for it, we’re not sure ‘free’ music is really that free. It usually comes at a cost to the art form and the artist … which has big implications, not for us in U2, but for future musicians and their music.”
Precisely how much they are getting paid by Apple (a company, let’s not forget, with an estimated $200bn in cash reserves) is not clear, but this is surely a deal that significantly lessens the financial risk for U2. Why blow out a firm monetary offer from Apple and release it in the traditional way when that means taking your chances amid what Spinal Tap would call your increasingly “selective” appeal among record buyers?
Jay Z was the last major act to give away a new album totally gratis, but he put a cap on it. His deal with Samsung in 2013 offered just 1m copies of Magna Carta Holy Grail to owners of certain Galaxy smartphone handsets, collecting a cheque estimated at $5m (£3m) for doing so. If – and it is a big “if” – U2 are getting even a fraction of the same rate per album downloaded that Jay Z got from Samsung, this could potentially run into the hundreds of millions, or at least certainly the 10s of millions.
Beyoncé did a surprise album launch on iTunes in December last year, but charged a premium for her “enhanced” album. In the opening weeks, when the lion’s share of any blockbuster sales happen, iTunes customers had to buy the music and the linked videos in a bundle that was almost twice the price of a standard download album. The fact Beyoncé charged – and charged a lot – for her album but U2 didn’t charge a penny for theirs arguably says all you need to know about how confident each of them are about the fans’ willingness to put their hands in their pockets.
The U2 album is also available exclusively on iTunes Radio as well as on Beats Music, the Spotify-rivalling subscription service Apple inherited as part of its $3bn acquisition of parent company Beats earlier this year. Beats Music had really only launched in the US and it was mainly for the company’s headphones that Apple made this purchase. But Apple knows that it has to get out of the downloads business sooner rather than later and so the album launch is very likely a way for Apple to point users towards its Beats-branded streaming service.
This free-album strategy on iTunes comes at a critical time for Apple, as download sales start to plateau or even tank in certain markets, with US sales last year falling by 5.7% for single tracks and 0.1% for digital albums. Its iTunes Radio service, currently only available in the US and Australia, has not exactly been a success and it has been left eating Pandora’s dust. There is a pressing need for Apple to generate interest again in iTunes as a place for music rather than an app store, a far more profitable product line for the company in recent years).
But if U2’s long game is setting up the marketing for an imminent tour, Apple’s long game is nudging consumers away from sporadic track purchasing before it dies completely and settling them into nice recurring monthly subscription payments on Beats Music. If anything, this deal could mark the death of the old way of doing business for not just U2, but also for Apple.