Okay, I’m kidding. It's probably Apple Pay. But that ground has been covered well enough by Mr Tony Poulos that I’m going to let that one sit for now.
The reason I’m interested in the U2 iCloud angle is because the reaction to it is providing a lot of useful real-time information for cloud service providers everywhere who might be considering a business model that involves pushing free content directly into their subscribers’ cloud accounts.
Twitter went ballistic as iPhone/iPad users suddenly found themselves owning a U2 album they hadn’t ordered – which was also listed as “purchased” in iTunes, to the alarm of people who thought they’d been billed for it. Part of the problem was that the album had downloaded from iCloud to devices for users who had their iTunes accounts set up to automatically download purchased items, which means the free album inadvertently cost them some data usage and also ate up precious storage space on their device.
Also, it’s admittedly a little creepy at face value – it’s sort of like a band sneaking into yr house and slipping their new album into the CD changer of yr stereo system.
To be sure, a lot of people seemed annoyed that it was a U2 album. Which suggests that they might have objected less if Apple had given them a free album by a band they actually like.
In any case, the whole affair looks like a publicity stunt gone wrong – at least for Apple. U2’s fans probably won’t mind a free album, and the band itself is getting a big paycheck from Apple for this, according to the New York Times. But I’m not sure what Apple hoped to get out of it.
One likely possibility is that Apple wants to reassert itself in the music sales business. According to CNET, analysts estimate that iTunes saw a decline in content sales in 2013 as digital streaming services like Spotify and Pandora become more popular. The RIAA says streaming subscriptions accounted for 21% of total music industry revenue in the US in 2013 – that’s up 57% year in year. Globally, paid streaming service revenues grew over 50% last year, according to IFPI.
It hasn't gone unnoticed that the U2 album is also on Apple’s streaming service Beats Music – which suggests the real strategy may have been to drum up business for Beats (for which Apple paid $3 billion in May), as well as to demonstrate Apple has the clout to strike these kinds of deals with major music artists.
Whatever Apple’s motivations, and whatever it means for iTunes and Beats, it’s fair to say the stunt backfired in the sense that Apple alarmed and annoyed many of its customers by giving them something they didn’t ask for. If they had simply used that $100 million marketing campaign – or just sent everyone an email – to let users know there was a free U2 album waiting exclusively for them on iTunes, the reaction probably have been more favorable. It’s called “opt in”. It’s been known to work.
But then I suppose Tim Cook wouldn't have been able to claim that it’s the “largest album release in history”, on the grounds that Apple’s 500 million iTunes users “purchased” it. On the other hand, Billboard has refused to recognize that metric, and won’t start charting sales of the album until its general release on October 14. So even by that measure, the promotion is kind of a bust.
Anyway, I realize a lot of this is peculiar to Apple’s specific business model, but there’s a worthwhile takeaway here for cloud service providers of all sizes, especially ones who also offer content services: don’t put stuff in your customers’ cloud without asking. Especially when your cloud service is already making headlines for not being all that secure.
FULL DISCLOSURE: I have an iTunes account, so I also have a copy of the album. I also generally like U2, though I like some albums more than others.