What Apple could learn from Swift: Analysis

LOS ANGELES — Don't mess with Taylor Swift.

The world's most popular pop star thought Apple was doing the wrong thing in declining to pay artist royalties during the three-month trial period for the soon-to-be-launched Apple Music.

So she went to her Tumblr page and wrote an open letter to Apple laying out her feelings.

And about 10 hours later, Apple caved.

Just like that.

It will now pay artists, after all.

Now, if you or I penned an opinion piece about Apple, it's highly unlikely Apple would have even acknowledged the sentiment.

But Swift's argument had no counter argument. Apple had no defense.

It should be paying artists for their work. Always. We don't need to be holding any benefits for a company with nearly $200 billion in the bank.

Tim Bajarin, a longtime analyst for Creative Strategies, who has covered Apple since it started making computers in 1984, says he's never seen the company switch positions like this. "This is the biggest one, with the biggest business ramifications that I can remember," he says. "You have to hand it to Taylor Swift. She is a force to be reckoned with."

Sure Swift is a mega-rich pop star who doesn't need the money, but her words didn't sound like a rock star whine. Tech firms are generating uber-dollars based on their work, and in digital music, few are seeing many returns.

Swift has been outspoken about the meager lack of royalties, and pulled her music from streaming service Spotify in protest.

Indeed, the lack of dollars in streaming music is a common complaint among musicians.

In a recent Associated Press interview, veteran singer/songwriter James Taylor said that instead of pennies on the dollar in return, "for every dollar they bring in, they should be giving 50 cents to the people who actually recorded the music."

So does Apple's swift response represent a major change to musicians' fortunes?

Not for the near-term. Subscription services haven't hit the right chord with the general public yet — simply put, there aren't enough subscribers signed up to generate the royalties in return.

Will Apple Music turn the tide?

Swift's open letter not only got the company to change gears, it put the new Apple Music service into thousands of headlines, and helped shine a light on a new service about to launch.

"In the end, this is a boon for Apple," Bajarin says. "Now more people will try it."

Bajarin said he believes Apple Music is set to eclipse Spotify, the No. 1 streaming-music service, with 15 million paying subscribers. Apple Music, he predicts, will have more than 60 million paying subscribers within a year. "And that's conservative."

Shake that one off, Taylor.

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