Apple's $100 million U2 debacle

Last week, Apple held a product launch event where it announced new iPhones, the Apple Watch and a free U2 album for every iTunes user called Songs of Innocence. At the event, U2 made a surprise appearance and performed a new single from the album called “The Miracle (of Joey Ramone).”
Unfortunately, instead of just offering customers the option to download the album for free, Apple went ahead and gave it to them without asking. The album was dropped into the 500 million active iCloud accounts in 119 countries. The people who have their iTunes account set up to automatically download any purchases saw the files on their computers and mobile devices.
This was a debacle where, from one view, the company did no wrong and executed without error. It only tried to give away some music. But “Songs of Innocence” became, with apologies to the famous poet William Blake, “Songs of Bitter Experience.” Perhaps the backlash had something to do with the faded glory of the band, whose gritty roots in Dublin’s dive bars are long in the past. Apparently many younger Apple customers never heard of the Irish band.
The free album celebrates the ten year anniversary of U2’s iPod commercial. U2 also said that they plan to collaborate with Apple over the next couple years to transform the way music is listened to. Apple reportedly gave U2 a large blanket royalty fee and provided a marketing budget worth as high as $100 million to give the album away to all iTunes users.
That leaves two lessons for Apple. One is never, never, never to let those over 40 decide what music they think younger consumers are bound to think is cool. The other is that, with $100 million in expense and 2 million downloads, $50 an album for a digital release is probably a bit much. Ah, well, Apple will weather this as it has other challenges and continue to rattle and hum along.
sources: CNN Tech, Forbes,

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