Apple Develops Taste For Music

| About: Apple Inc. (AAPL)
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There was a fascinating story in Friday's WSJ about Apple's new role as taste maker in music. There has clearly been a shift in persuasion, power and authority in the music business.

A void was created as Radio abandoned its listeners, and as Clearchannel took the hamburgerhelper route. Bob Lefsetz notes in a commentary Why CD Sales Are Tanking:

Despite the rags and blogs, music is just not a general topic of conversation amongst the public now.  Oh sure, young ‘uns are still music passionate.  But too often the music is just the grease, what you dance to, make love to.  As for the oldsters, they’re positively lost.  They want to buy, but they don’t know What to buy.

You used to trust the deejay.

For a minute there you trusted Starbucks (NASDAQ:SBUX).

Until there’s a trusted outlet with some mass and momentum, music sales will remain in the dumper.  Rather than wine and dine programmers, labels should develop and support new gatekeepers.  Who tell people what to buy!

The Journal piece is all about how cubicle-dwelling denizens at Apple have become "music's unlikely power brokers."

I cannot remember the last song that "broke" on the radio for me. I've actually discovered more music on Apple's commercials than I have on FM over the past 5 years. The Original iTunes commercial featured The Propellerhead's "Take California" (on Decksandrumsandrockandroll).

It is funny to look at that original commercial, only a few years old now, and think back as to how groundbreaking the concept of "1000 songs, in your pocket" actually was; today, it's a gimme. I also heard the Black Eyed Peas for the first time as an iPod advert; the same for Steriogram's "Walkie Talkie Man."

Here's an excerpt:

iTunes is housed at Apple's Cupertino, Calif., headquarters in a cluster of nondescript cubicles that could easily be confused with a software-development group but for a smattering of music posters on the walls, according to people who have visited or worked there.

The iTunes staff includes people with music pedigrees, including Alex Luke, a longtime deejay who is the director of music programming and label relations (Mr. Luke still sits in occasionally for stations like Los Angeles's Indie 103.1 FM). Bruno Ybarra, who co-founded a house-music record label, manages relationships with independent music companies. Denzyl Feigelson, a South African who was a manager for singer Paul Simon's "Graceland" tour, is a music editor for iTunes in London. In all, dozens of iTunes editors and label-relations staffers collaborate in meetings and discussions throughout the week to determine what the home page of the iTunes Store will look like when it is refreshed every Tuesday.

Apple is a rare growth story in the music business. It nearly monopolizes digital-music sales, just about the only growth area for the beleaguered industry, which saw CD sales fall for seven years running. iTunes sold 1.2 billion songs last year compared with 30 million in 2003, its first year in operation, Apple says. The company says it passed (NASDAQ:AMZN) last year to become the fourth-largest music retailer in the U.S., behind Wal-Mart (NYSE:WMT) Stores, Target (NYSE:TGT) and Best Buy (NYSE:BBY), a claim that isn't disputed by music companies. At the end of last year, Apple was selling five million songs a day at 99 cents each.

Via Wikipedia, here is an overview of nearly every song from Apple's commercials:

iPod Date Song Artist
1G 10/2001 "Take California" The Propellerheads
3G 04/2003 "Hey Mama" Black Eyed Peas
3G 04/2003 "Rock Star (Jason Nevins Remix)" N.E.R.D.
3G 04/2003 "Are You Gonna Be My Girl?" Jet
4G 06/2004 "Channel Surfing" Feature Cast
4G 06/2004 "Walkie Talkie Man" Steriogram
4G 06/2004 "Saturday Night" Ozomatli
4G [U2 Edition] 10/2004 "Vertigo" U2
4G 01/2005 "Ride" The Vines
shuffle 1G 01/2005 "Jerk It Out" Caesars
4G 06/2005 "Technologic" Daft Punk
4G 06/2005 "Feel Good Inc."


nano 1G 09/2005 "Gimme That" The Resource
5G 10/2005 "Original of the Species" U2
5G 10/2005 "Lose Yourself" Eminem
5G 10/2005 "Sparks" Wynton Marsalis
nano 1G 04/2006 "Cubicle" Rinôçérôse
5G 04/2006 "Love Train" Wolfmother
5G 08/2006 "Someday Baby" Bob Dylan
nano 2G 09/2006 "The Audience Is Listening Theme Song" Cut Chemist
shuffle 2G 09/2006 "Who's Gonna Sing?" Prototypes
5G 01/2007 Flathead The Fratellis


This site has ITMS links to every song from iPod Commercials.


Music's New Gatekeeper
March 9, 2007; Page W1