Nobody Will Tell You the Ugly Reason Apple Acquired a Classical Music Label
But you need to know, because it offers a glimpse into the dark future of streaming
Apple just made a surprising acquisition. It bought out BIS Records, a 50-year-old classical music label in Akersbaga, Sweden.
But nobody will tell you the real reason.
That’s probably not surprising, because it’s an ugly reason. But you really deserve to know it—because it gives a glimpse into the dark future of streaming.
I offer my assessment of the real deal below. (And, in this case, it’s worth reading all the way through to the shocking last paragraph.)
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Apple has previously invested in music technology, but not the music itself. Previous buyouts have focused on sexy technologies like Beats headphones and Shazam music recognition software.
And now BIS Records?
If they were going to buy a label, why did they pick such a tiny one? Apple has enough cash to acquire all of the major labels. It could devour Universal Music for breakfast, and swallow Warner Music Group for dinner.
But instead it buys out BIS Records—with estimated revenues of $7.6 million. Just one Apple Store can make that much money in a single week.
I’ve read a number of offered explanations, but none of them are convincing. The notion that Apple is buying an obscure Swedish label to get credibility is a joke. If anything, the opposite is true—Apple gives luster to BIS by making this investment.
Even more amusing is the suggestion that Apple is making this deal to show its commitment to innovation. Does Apple really need a toehold in Akersbaga, Sweden to do that? I don’t think so.
So what’s really happening?
There are two plausible theories. One explanation is encouraging for the creative culture. But the other theory is alarming.
Let’s compare them. Then I’ll let you decide which is the real motivation.
Theory #1: Apple loves music and musicians.
The company plans to pump lots of money into the music economy.
They will invest in record labels so they can offer exciting exclusive releases to Apple Music subscribers.
The goal is to grow revenues by improving the quality of its offering.
Theory #2: Apple despises music and musicians.
The company plans to buy up the rights to music so it doesn’t have to pay royalties to labels.
It will use every trick it knows to substitute the tracks it owns for competitive offerings.
The goal is to boost profits while reducing its cash expenditures for music—even if it lessens the quality of its offering.
Both of these explanations can’t be true. It’s either one or the other. So which is it? Are we dealing with a good Apple or bad Apple?
I hate to tell you this. But even at first bite, you can taste the worm.
I’d love to think I was wrong on this, but there’s simply too much evidence to support Theory #2. If Apple wanted to offer exclusive music to subscribers it wouldn’t buy a label that records so many works in the public domain. This is the first warning sign.
My favorite offerings on the BIS label are the Bach cantatas recorded by Bach Collegium Japan under Masaaki Suzuki. (I recommended them last year in my article about the cantatas.)
The BIS label has also released the full Beethoven symphony cycle—performed by the Minnesota Orchestra under Osmo Vänskä, as well as lots of Mozart, Tchaikovsky, and other core contributors to the classical repertoires. However, unlike the cantatas, these other BIS albums are seldom the most esteemed versions on the market.
But how many music fans searching for Beethoven or Mozart on streaming are picky about conductors and orchestras? If the first search results are the Minnesota Orchestra are they really going to dig deeper to find the Berlin Philharmonic?
Of course, some unique offerings can be found on BIS—especially of obscure Nordic composers. But do you really believe that Apple made this acquisition in order to corner the market on Kalevi Aho or Geirr Tveitt?
The very idea is ridiculous.
If Apple wanted to offer exclusive music, they would cut a deal with Taylor Swift. They have the cash to do it. They wouldn’t waste time on locking up Kalevi Aho. That’s so obvious I shouldn’t even have to say it, but (given all the smoke and mirrors here), I really do.
So we’re clearly dealing with the bad Apple here. And the fact that the company refused to comment on the deal, when CNBC tried to get more details, is revealing. If they really were proud of their sexy new classical label, they would take the opportunity to boast.
Just consider how they’re handling the new iPhone launch event. They can’t talk enough about that bloody phone. They don’t just hold a press conference—but create an entire experience (complete with goofy name).
But they’re keeping silent on Apple’s first record label acquisition. Are you starting to see the picture?
Hey, I’ll even help them out. If Apple needs a special event name to announce the BIS deal, they just need to remove the letter I. That was simple enough, huh?
But there’s another level to this acquisition. It gives us a glimpse into the future of music streaming. That’s not a pretty sight.
Spotify has already learned that there’s no money to be made with exclusive rights to superstar offerings. “After pouring billions into podcasts and audiobooks to little effect,” explains tech journalist David Pierce, “it seems to have largely given up on the idea that exclusive content is the path to riches.”
The more profitable move is to manipulate listeners—prodding them to choose music the platform can use without royalty payments. As far as I can tell, this is the single biggest advantage to AI music. It’s a cheap alternative.
Apple surely must have learned the same lesson. Apple Music is now eight years old, but there’s no indication that the business is profitable. They need strategies to reduce costs, and substituting cheap music for expensive music is the most obvious way of doing this.
The second way of fixing the profitability problem is raising subscription rates. I predicted this would happen years ago—you can’t give people unlimited music for under ten dollars a month.
Both of these strategies are now underway. The buffet has started serving up cheap, processed food, and the price is going up too.
And this is about more than just music. Streaming economics are ugly in video too—that’s why those platforms are also raising prices. Meanwhile Disney shares have fallen below $80 for the first time in almost a decade. And the emerging consensus is that even Barbie can’t fix the problems at Warner Bros.
These are all symptoms of a larger problem—namely the pervasive blandness and stagnation in popular culture. In a vibrant and healthy society, entertainment businesses wouldn’t be obsessed with cost cutting. They would, instead, try to grow revenues with exciting new offerings.
Alas, we don’t live in that kind of society. Instead we get retreads and reboots, AI knock-offs, and generic offerings. Even Apple—once a touchstone for visionary thinking—is moving in that same bland direction. And not just in music. My hot take is that the new glitzy iPhone—number 15, by the way (they count them, just like Police Academy movies)—is also one more over-hyped sequel.
Of course, none of this is inevitable. The cycle can turn—the cycle must turn. I’m not sure when or how it will happen. But one thing is certain: Solutions will not come from the current leadership in the streaming businesses. They are just part of the problem.
Coming soon: My open letter to the one person who (I believe) is best equipped to take the lead in solving this problem. You might find this surprising, but her name is Taylor Swift.
Great article. One caveat:
“Theory #2: Apple despises music and musicians.”
This flatters both a) musicians (and by extension writers, other artists, etc.) and b) everyone who cares about the arts, any art.
Apple, Amazon and their fellow tech lords don’t despise us. They’re utterly indifferent. They don’t care. What’s more, it rarely, if ever, occurs to them that that that might even be an option.
They don’t despise people who can do things they can’t, appreciate things they don’t or who have simply made life choices they didn’t. That would entail some level of respect and resentment.
Nor is there likely much guilt about unfairly profiting off other’s work that leads to anger (it’s not a case of ‘we hate those we exploit.’) They evidently think entirely in terms of product, processes (of distribution, consumption, monetizing, etc), consumers and long term strategies.
Not only are the actual individuals who create & cultivate art beneath contempt (being despised), they’re usually beneath even perfunctory notice.
I think the comments here and in the article are unnecessarily vitriolic towards Apple, who albeit is a trillion dollar corporation, but has plainly proven over decades that their business model is based on delivering genuine value to customers, a handful of caveats and misdirections withstanding.
Theory #1 is the obvious motive for Apple and the least riskiest approach. Apple does not take overt risks and are known to be slow to move. I do not see them making any deliberate pursuits towards AI-generated music until that market has been well proven out. Today, AI music still amounts to novelty meme content that shows up on your feed occasionally.
They have been cornering the classical music market since they bought Primephonic, the niche classical music streaming service, in August 2021. Clearly they are just trying to buy into the classical music industry by buying a reputable classical music label. It doesn't need to be fancy or even profitable - just well run, with hard-earned experience among its staff and ownership. Whats valuable to Apple here is the access to knowledge and experience of working within the classical music industry, and being exposed to every step between artist to listener.
What is likely here is that Apple is making a bet towards niche streaming services for music (and probably other forms of content) as the way to profitability. One giant music app with all artists and all tracks is starting to seem like a nebulous and herculean approach that never quite satisfies the user. However - a niche streaming app dedicated to classical music? That would invite die-hard classical fans and casual ethusiasts alike and is much more likely to retain users over time. And to build a successful niche app that satisfies the die-hard classical music listener, you need deep knowledge and expertise. That's why they bought BIS.