The release of the latest iPhone model is always a pretty big deal, with consumers, industry experts, and competitors watching anxiously to see what Apple has offered in this round. But Apple apparently believed the hype wasn’t big enough, so in conjunction with the release of its iPhone 6, Apple made the latest album by the rock gods U2 available for free to every iPhone user in the world.
Although consumers did not have to pay a cent to download or listen to the new album, Songs of Innocence, Apple reportedly paid quite a lot for the right to the music. The total sum remains private information, but the license gives Apple the exclusive right to share the songs for a five-week period. That is, if fans want to get the album in some other channel, they will have to wait for the five-week period to end. In addition, the agreement featured some more traditional marketing approaches, including a televised advertisement for the iPhone with a stylized video of U2 performing the first single from the album.
For U2, the coordinated release of their latest album with the newest iPhone created the sort of publicity that would be virtually impossible through traditional marketing efforts. It also ensured that millions of fans would have access to its music, which might prompt them to seek out additional tunes that they could purchase from its existing catalog. The hype also might increase anticipation for a forthcoming tour by the band, reported to begin in 2015.
For Universal, the company that publishes U2’s music, the deal is an effective and guaranteed revenue source. For the first five weeks, it knows exactly how much it will earn off U2’s latest release, and the buzz surrounding this innovative approach suggests that consumers might put U2 in the front of their minds in general.
For Apple, the promotion gave an exciting, rock-n-roll vibe to the release of what was, ultimately, just another tech product. In addition, though Songs of Innocence showed up automatically in users’ accounts, consumers still had to log in to iTunes to download the songs, so Apple immediately prompted people to revisit its site and perhaps stick around to purchase a few other songs as well.
SOURCE:John Jurgensen, “U2, Apple, and the Deal Behind Getting ‘Songs of Innocence’ Free of Charge,” The Wall Street Journal, September 9, 2014, http://blogs.wsj.com
Could such a pricing and promotion collaboration work in other settings? Consider the unique strengths of Apple and U2.