2021年6月8日 星期二

On Tech: YouTube isn’t the music villain anymore

YouTube seems to have shown that it's possible to both upend an industry and help make it stronger.

YouTube isn't the music villain anymore

Timo Lenzen

YouTube has long been the most popular music service in the world. What's changed is that YouTube isn't the Darth Vader of the music industry anymore.

For years, some artists and suits at record companies loved the zillions of clicks that music videos got on YouTube, but they complained that the site, owned by Google, didn't generate enough money for them or didn't do enough to stop rip-offs.

Those grievances haven't gone away entirely, but they have mostly gone quiet. Why? A big reason is that YouTube figured out ways to generate enough cash to make many people in the music world happy — or at least content enough for now.

The question is whether YouTube has achieved a lasting peace or a temporary one. If it persists, YouTube might have achieved something that few internet companies have: a relatively healthy relationship with an established industry that it simultaneously helps and disrupts.

Let me step back to the years when YouTube was in the music industry's doghouse. The industry powers regularly trotted out a public relations shorthand, the "value gap," for what they said was YouTube's paltry financial contribution to the music industry relative to the popularity of music on the site. They were fond of pointing to figures showing that vinyl records generated more income for the music business than YouTube did.

ADVERTISEMENT

Mostly, YouTube made musicians, songwriters and record labels money the Google way: It sold advertisements in or adjacent to music-related videos and split the cash with the people and companies behind the songs. The power brokers in the industry said it was peanuts.

Fast forward to last week, when YouTube disclosed that it paid music companies, musicians and songwriters more than $4 billion in the prior year. That came from advertising money and something that the industry has wanted forever and is now getting — a cut of YouTube's surprisingly large subscription business. (YouTube subscriptions include an ad-free version of the site and a Spotify-like service to watch music videos without any ads.)

The significance of YouTube's dollar figure is that it's not far from the $5 billion that the streaming king Spotify pays to music industry participants from a portion of its subscriptions. (A reminder: The industry mostly loves Spotify's money, but some musicians say that they're shortchanged by the payouts.)

Subscriptions will always be a hobby for YouTube, but the numbers show that even a side gig for the company can be huge. And it has bought peace by raining some of those riches on those behind the music. Record labels and other industry powers "still don't looooove YouTube," Lucas Shaw, a Bloomberg News reporter, wrote this week. "But they don't hate it anymore."

ADVERTISEMENT

The YouTube turnabout may also show that complaining works. The music industry has a fairly successful track record of picking a public enemy No. 1 — Pandora for awhile, Spotify, YouTube, and more recently apps like TikTok and Twitch — and publicly browbeating it or playing one rich company against another to get more money or something else they wanted.

It's not YouTube's turn in the hot seat anymore, but I don't know if it's for good. Mark Mulligan, a music industry analyst and consultant, and my colleague Ben Sisario told me that some of the same old gripes are bubbling below the surface. Music power players still believe that YouTube pays far too little per click compared with other digital music services. And they fear that YouTube devalues songs everywhere because it doesn't do enough to stop pirated versions.

But just maybe, YouTube has shown that it's possible for digital companies to both upend an industry and make it stronger. That's a rarity. Think about the resentment that many news organizations and websites have about Facebook and Google, restaurants' uneasy reliance on food delivery apps and Netflix's awkward marriages with entertainment companies. Maybe time and cash can achieve a measure of peace.

If you don't already get this newsletter in your inbox, please sign up here.

ADVERTISEMENT

SUBSCRIBE TODAY

If you've found this newsletter helpful, please consider subscribing to The New York Times — with this special offer. Your support makes our work possible.

Before we go …

  • The end of "too good to be true." Uber, DoorDash and Airbnb have for years had the cash to subsidize the cost of their convenience services. Now, writes my colleague Kevin Roose, those youngish companies need to turn a profit and this, along with pandemic-related oddities in the economy, is pushing up the prices for Ubers, scooters and Airbnb rentals.
  • A peek into how the richest Americans aren't like the rest of us: ProPublica got its hands on data on the tax returns for some of America's richest people, including tech billionaires, and identified those who used legal means to pay income taxes that were a tiny fraction of their growing fortunes. Amazon's Jeff Bezos, for example, paid no federal income taxes in 2007 and 2011, and Tesla's Elon Musk did the same in 2018, ProPublica reports.
  • It pioneered ways to make a living online: Wired writes about the legacy of Twitch, the livestreaming service that created ways for people to collect money from doing stuff online through tips and subscriptions in return for acknowledgment and connection. For better or worse, without Twitch there may have been no "creator economy" of Substack writers, Instagram influencers or Patreon podcasters.

Hugs to this

Happy birthday to good dogs Charlie and Silas, who look adorable in their sparkly crowns.

We want to hear from you. Tell us what you think of this newsletter and what else you'd like us to explore. You can reach us at ontech@nytimes.com.

If you don't already get this newsletter in your inbox, please sign up here. You can also read past On Tech columns.

Need help? Review our newsletter help page or contact us for assistance.

You received this email because you signed up for On Tech with Shira Ovide from The New York Times.

To stop receiving these emails, unsubscribe or manage your email preferences.

Subscribe to The Times

Connect with us on:

facebooktwitterinstagram

Change Your EmailPrivacy PolicyContact UsCalifornia Notices

LiveIntent LogoAdChoices Logo

The New York Times Company. 620 Eighth Avenue New York, NY 10018

2021年6月7日 星期一

On Tech: Why all the fury at Apple?

Plus, what you need to know about Amazon Sidewalk.

Why all the fury at Apple?

Shuhua Xiong

Apple's annual conference for app makers, which starts on Monday, is usually a lovefest. This year it's going to be awkward.

Some developers are angrier than ever at Apple's dictatorship over iPhone apps, accusing the tech giant of imposing unfair costs and complexities on them and iPhone users. Here's what you need to know about this dispute, where Apple and the unhappy app makers have a point, and my suggestions for reaching app peace.

Why are app makers mad?

It boils down to what some app companies and lawmakers say is Apple's domineering control of iPhone apps.

Some are angry at what they see as high and capriciously applied commissions that Apple takes when someone subscribes to an online dating service in an app or buys virtual gems in the Clash of Clans game. Apple takes a fee of up to 30 cents per dollar of each sale in an iPhone app. (It recently cut its commission to 15 cents per dollar for all but the top-selling apps, although that change affects a fraction of Apple's app revenue.)

Other app makers believe Apple unfairly blocks their apps or puts them at a disadvantage to Apple's competing internet services. The complainers could be a vocal minority among the couple million iPhone apps, but it's an influential one — including Spotify, Match Group, Airbnb, Tile and the maker of the Fortnite video game, Epic Games, whose trial against Apple concluded last month.

Do the complainers have a point?

Yup. Apple has been running its app store using the same approach since it started it in 2008. That made sense at the time. It might not anymore.

ADVERTISEMENT

People's familiarity with apps makes it harder for Apple to justify its restrictions and commissions as though people couldn't find apps without the company's help. Apple also makes increasingly Byzantine rules to keep control over the app store, and they don't always make sense. Why does Apple want an app to pay it a commission on the e-book edition of a cookbook but not the print version?

The big question for us is: What does Apple's grip on the iPhone cost us, in higher priced apps or new ideas that never get off the ground because some developers don't think they can make money under Apple's terms?

But Apple is a little right, too.

Apple says that it deserves to be compensated for its role in the app economy. It brings hundreds of millions of potential customers to app makers' doorsteps, makes it easy for people to buy stuff, and screens apps to make sure they're safe. (The company's vetting is definitely not foolproof, though.)

ADVERTISEMENT

Apple overstates the value of what it does for app makers and the rest of us, but it is a meaningful contribution.

What's the solution to app peace?

I have two suggestions, one mild and another aggressive. I doubt that Apple would do either voluntarily.

First, Apple should stop blocking app makers from telling people that they don't have to buy stuff in the app. For example, YouTube Music's streaming subscription costs $12.99 a month if purchased in the iPhone app. The same membership costs $9.99 from YouTube Music's website. (YouTube pays a commission of $3 to Apple, and passes the cost on to us.)

ADVERTISEMENT

If app makers were allowed to link to websites where people could buy subscriptions or digital goods for less, many people still wouldn't do it because it's a pain, my colleague Greg Bensinger told me. But Greg, a New York Times editorial board member, said that it would win Apple a lot of good will. It also would conform more closely to how Google operates its Android app store.

My out-there option is to ditch app stores entirely. It is easier and arguably more secure to find, pay for and download apps from a single digital storefront. But I'm no longer sure it's worth the higher costs and control by app store owners. What if we just downloaded a Tinder or YouTube Music app from the companies' websites? Or, as I have proposed before, what if there were no apps at all?

If you don't already get this newsletter in your inbox, please sign up here.

TIP OF THE WEEK

What you need to know about Amazon Sidewalk

Do you own an Amazon gadget like a Ring camera or an Echo speaker? Brian X. Chen, The Times's personal technology columnist, has info and advice about a new shared internet network of Amazon device owners.

Starting on Tuesday, many people who own Amazon devices will be automatically enrolled in a new program that Amazon calls Sidewalk. Basically, it allows anyone who is part of this collective to share their internet connection with others nearby. If your neighbor's Ring internet-connected doorbell camera has a poor internet connection and yours has a strong one, you can share your bandwidth with your neighbor and vice versa.

Amazon has a detailed explanation of Sidewalk on its website. Devices that will join Sidewalk are generally newer products, like the third-generation Echo speaker, the Echo Spot smart alarm clock and some Ring cameras that were released in 2019.

While Amazon's intentions with Sidewalk sound good, security experts have raised concerns because there are many unknowns. What if hackers infiltrate the network and hijack devices? (That has happened before with Ring devices.) Or what if sharing our internet connections violates the terms-of-service agreements we have with our internet providers?

Amazon has published a white paper about its security measures. Still, being part of Sidewalk makes you an early test subject, and it will be no fun if something goes wrong.

I'm also not a fan of being automatically enrolled in a data-sharing program, no matter the intent. If this bothers you, too, here are the steps to opt out:

If you use an Amazon Alexa product:

  • In the Amazon Alexa app, tap More in the lower right hand corner of the screen.
  • Tap Settings, then Account Settings, then Amazon Sidewalk.
  • Toggle Sidewalk to the off position.

If you use a Ring product:

  • In the Ring app, tap the three-lined icon in the upper left, and then tap Control Center.
  • Tap Amazon Sidewalk and slide the button to the off position.

(If you do not see the Sidewalk options in your settings, it means your device is not compatible with the new program.)

SUBSCRIBE TODAY

If you've found this newsletter helpful, please consider subscribing to The New York Times — with this special offer. Your support makes our work possible.

Before we go …

  • India is the world's most interesting technology battleground: The billionaire Mukesh Ambani is trying to buy an Indian grocery store chain, and Amazon is fighting to stop it. Aman Sethi writes for The Times that this is emblematic of giant companies' efforts to use India's stores to build loyalty in online shopping, and the Indian government's role in shaping that fight.
  • He tried to warn us: My colleague Nicole Perlroth talks to Leon Panetta, the former U.S. secretary of defense, who has been warning for years about America's vulnerabilities to digital hacking and laments that people, organizations and policymakers still haven't changed their behavior despite crippling cyberattacks. "What will it take?" Panetta asks.
  • Trump's voice still carries online: My colleagues have a set of graphics showing how some of former President Donald J. Trump's views continue to travel far and wide on social networks even though he has been kicked off Facebook and Twitter. One exception: His false claims about election fraud haven't spread far.

Hugs to this

Firefighters in Manhattan used paint and creativity to keep the fire house tradition of Dalmatian dogs alive.

We want to hear from you. Tell us what you think of this newsletter and what else you'd like us to explore. You can reach us at ontech@nytimes.com.

If you don't already get this newsletter in your inbox, please sign up here. You can also read past On Tech columns.

Need help? Review our newsletter help page or contact us for assistance.

You received this email because you signed up for On Tech with Shira Ovide from The New York Times.

To stop receiving these emails, unsubscribe or manage your email preferences.

Subscribe to The Times

Connect with us on:

facebooktwitterinstagram

Change Your EmailPrivacy PolicyContact UsCalifornia Notices

LiveIntent LogoAdChoices Logo

The New York Times Company. 620 Eighth Avenue New York, NY 10018