Investors have long awaited the release of Apple's streaming music service. After all, if done properly, the company can turn streaming music into a major earnings generator. However, when working in the streaming music space, the most important factor is the artist; and recently, one artist has spoken out. Taylor Swift recently announced that her album, titled “1989”, will not be available on Apple Music. Today, we'll discuss why Taylor Swift will not give Apple permission to use the 1989 album, how this can become a big problem for the service down the road, and what to watch in order to profit from the news. So, let's get right to it…
Taylor Swift's 1989 Album Will Not Be Part Of Apple's Streaming Music Service
Taylor Swift recently released an announcement on her Tumblr blog titled, “To Apple, Love Taylor”. In the post that was shared tens of thousands of times within minutes, Swift explains why she won't be working out a deal with Apple for the streaming of her album titled “1989”. Here's a short snippet from the post that highlights why…
“I'm sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the service. I'm not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company…This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that royalties from that would get them out of debt.”
These strong words relay a clear message. Apple is not fairly treating artists; and big brands are not likely to put up with it!
Why This Could Lead To Big Problems Down The Road For Apple
Investors that take the fundamental approach will likely see this message as a big hit. After all, take a look at Pandora. When mainstream artists started to attack Pandora's way of business, their stock fell dramatically. And while they've made changes to put the artist in the spotlight, their stock still hasn't recovered. As you know, fundamental investors pay close attention to intrinsic values of a company. So, considering that the message from Taylor Swift could be followed by more mainstream artists backing out of the service, intrinsic value in the eye of the investor is likely to fall. However, it doesn't have to. Apple still has time to make this right. In her post, Swift ended the post with a clear message…
“But I say to apple with all due respect, it's not too late to change this policy and change the minds of those in the music industry who will be deeply and gravely affected by this. We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation.”
Nonetheless, I'm not sure that Apple is likely to respond by changing their policy.
How This Can Become Profitable For The Binary Options Trader
Since long-term fundamentalists are likely to take this very seriously, we can expect to start seeing declines in the value of Apple stock. So following the trends and buying puts at resistance will likely be a very profitable concept!
What Do You Think?
Do you think that Taylor Swift's public letter to Apple will have an adverse affect on the company's stock? Let us know your opinion in the comments below!