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Apple Just Bought a Company that Acts Like a Record Label. Why?

Is Platoon the key to unlock Apple’s long-discussed potential as a music rights-owner?

Billie Eilish performs at the 2018 KROQ Absolut Almost Acoustic Christmas at The Forum, in Inglewood, CalifKROQ Absolut Almost Acoustic Christmas 2018 - Day 2, Inglewood, USA - 09 Dec 2018

Billie Eilish performs at the 2018 KROQ Absolut Almost Acoustic Christmas at The Forum in Inglewood, CA.

Amy Harris/Invision/AP/REX/Shutterstock

The plan was to sell flowers.

Following a successful music-industry career throughout the Eighties and Nineties, working with the likes of Kenny Loggins and Paul Simon, Denzyl Feigelson moved to Hawaii. There, semiretired, the South African exec launched an online floral company (based on the the bones of a sluggish, pre-Google internet) that shipped local blooms into the States.

Soon after this petal-peddling venture was underway, though, in 1996, Feigelson had a brain wave. Twelve years before the launch of SoundCloud, nine before the arrival of TuneCore, Feigelson believed that the immature internet could offer artists an independent alternative to then-arduous label contracts.

He moved back to California and founded Artists Without a Label (AWAL), one of the world’s first direct-to-fan CD sales sites. It was a roaring success: Hundreds of artists flocked to the portal to sell their wares, before AWAL, and Feigelson, were spotted by Steve Jobs.

In 2001, Apple drafted Feigelson as a music consultant, working with Jobs’ team to locate and license tracks for product launches and promotional videos. This sparked a professional relationship that would see Feigelson — who sold AWAL to music-biz giant Kobalt in 2012 — become a key figure for Apple (and Jobs) in launching iTunes, the iPhone, the iPad and Apple Music internationally over the next 14 years.

Fast-forward to now, and Feigelson and Apple are mutually hitting headlines for a new reason: Apple has just acquired his latest company, which pretty much does everything a record label does.

Platoon, launched in 2016, has built on AWAL’s original principles — enabling artists to distribute their music independently — by adding a wealth of label-like services. These include A&R (signing and developing talent), plus marketing, funding, video editing suites, recording studios and fiscal business management.

In return for these services, unlike major record companies, Platoon does not ask acts to hand over long-term rights to their music. Instead, more akin to a VC investor, it typically obtains a minority stake in an artist’s own independent business.

Platoon’s hit rate over the past two years has been impressive. Focusing on new rather than heritage artists, the firm has signed the likes of BRIT Award winner Jorja Smith, hotly tipped Sam Smith collaborator YEBBA and Nigerian breakout star (and newly announced Coachella performer) Mr Eazi.

Platoon has also developed two major-league artists who have subsequently left its ranks to sign hefty global deals with the world’s biggest record company, Universal Music Group: U.K. rapper Stefflon Don inked a seven-figure deal with UMG’s Polydor/Capitol, and L.A.-born teenager Billie Eilish (pictured), who has the U.S. industry abuzz right now, penned a worldwide deal with Interscope Records in 2017.

And it is with these last two signings in mind that Apple’s acquisition of Platoon is lent extra intrigue.

Platoon’s head office, based in Kings Cross, London, is a gleaming state-of-the-art space, a stone’s throw from Mark Ronson’s music-making HQ. When I visited Platoon for an interview last year, Feigelson told me of his pride in Stefflon Don and Eilish, and that his company was broadly comfortable that these artists had jumped ship to major labels. (His nonchalance was possibly informed by the fact that Platoon likely earned a pretty penny from Universal when it signed both acts.)

However, Feigelson also made clear that, in Platoon’s perfect world, this wouldn’t have happened. He mentioned his certainty that “a global artist will break through Platoon [independently] and it will change perceptions.”

He then added, “You’ve got years of the deep-rooted pattern [from the major labels]: ‘In order to be a global superstar you need investment and global infrastructure, you need boots on the ground, you need big money spent on international.’ This is all true, of course, and can certainly work for a select group of artists. But we live a different world now.”

If a fast-rising Platoon artist needed “big money” today, post-acquisition, he or she wouldn’t have to look very far: Apple currently has more than $230 billion cash at its disposal.

Apple, then, now owns a company in Platoon that can offer every function of a record label — most crucially modern recording facilities — and that holds a sterling industry reputation for spotting new talent.

So is Platoon the key to unlock Apple’s long-discussed potential as a music-rights owner — perhaps supplying Apple Music with its own exclusive recordings? It’s complicated.

Senior major-label sources tell me that Platoon’s acquisition by Apple has been long expected, not least due to Feigelson’s lengthy affiliation with the firm. At Apple, they suggest, Platoon could amplify its position as a “feeder” into the blockbuster industry, using Apple Music’s in-house tools (such as web-radio service Beats 1) to swell an artist’s global profile before they sign a label deal.

This won’t be great news for the majors’ bottom line — it will eventually drive up the market value of these acts, and their negotiating power, as they enter discussions with labels. Yet it doesn’t necessarily mean Platoon will be directly competing with record companies for long-term relationships with talent.

What’s more, Apple Music has previously delved into the “exclusives” game, with mixed results. In 2016, it paid serious checks to lock out rivals from getting early access to new records from the likes of Chance the Rapper, Drake and Gwen Stefani.

This trend was quashed when — following a stinging experience with Frank Ocean — Universal Music Group boss Sir Lucian Grainge outlawed service-exclusive album releases across his worldwide company.

Since then, Apple has played ball, with its only headline “artist exclusives” coming in the form of video, or other types of content ancillary to a main track/album release.

Apple Music’s management is no doubt cognizant of the fact that the major labels control the rights to the majority of music currently played on the platform. Artist managers, meanwhile, have become wary of upsetting Spotify and YouTube by signing service-exclusive deals, especially considering how such a blackout from Apple rivals could affect weekly chart positions.

That said, one notable individual is definitely worth listening to on this subject. Serial venture capitalist Saul Klein was Feigelson’s co-founder of Platoon, in 2016. Klein’s own company, LoveFilm, was acquired by Amazon in 2011, and his funding vehicle is a long-term investor in the likes of SoundCloud and Sonos.

Speaking to MBW last year, Klein offered a view that Apple is, publicly, unlikely to share for some time yet.

He said, “If you’re an independent [artist] today, the economics have tipped in your favor. . . . If I look 10 years out, with all of the platforms we already have and imagining those which are yet to be introduced, I just can’t see a world of a dominant major-label system.”

Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis and jobs since 2015. He writes a weekly column for “Rolling Stone.”

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