Apple CEO Tim Cook and U2 frontman Bono made big news this week when they announced that the band's new album would be distributed, at no charge, to the roughly 500 million people with an iTunes account. But as Bono made clear on stage, someone had to make up the difference. "First you would have to pay for it," he told Cook, "because we’re not going in for the free music around here."
So what does 500 million records cost these days? According to several reports Apple is spending at least $100 million to market the album, plus an undisclosed lump sum that goes to U2 as a direct payment. That's an enormous promotional budget for a single album, but for Apple, the price tag is pretty easy to swallow.
First off, Apple's marketing campaign will likely tie into its own products heavily. So while it's putting up billboards, TV spots, and display ads for Songs of Innocence, it will also probably be pushing iTunes and its new smartphone and watch. Secondly, Apple has an ungodly amount of money in the bank — $150 billion and counting. The entire U2 spend constitutes a few days of profits.
If anything, the $100 million figure, while eye popping at first, really highlights how devalued music has become as a commercial commodity, especially compared with the devices and software we use to listen to it. Over at Pitchfork, Rob Mitchum brilliantly laid out the diminished state of the record industry and the ascension of free as the dominant paradigm for artistic consumption.
