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Why Apple Is Under Fire From This Major Music Label

2014 Pemberton Music And Arts Festival2014 Pemberton Music And Arts Festival
Singer Frank Ocean's long-awaited new album "Boys Don't Cry" will be available exclusively via Apple Music on Friday.Photograph by Andrew Chin — FilmMagic

Frank Ocean released “Blonde,” his first album in four years, last week exclusively on Apple’s digital music service, Apple Music. The $10 album came out via Ocean’s personal record label—not the major label he signed with: Universal Music Group’s Def Jam.

Instead, Def Jam only got to issue a lengthy video, “Endless,” which was exclusive to Apple Music subscribers.

How the moves will play out for Ocean and his relationship with Def Jam is yet to be seen. But the label reportedly doesn’t like the arrangement and won’t follow the playbook with other artists in the future.

Universal Music CEO Lucian Grainge told the heads of his various labels that Universal will no longer do streaming exclusives on a single platform worldwide, according to a report by Billboard, which didn’t cite any sources. Ocean repaid Def Jam for the cost of recording the album so he could release it on his own and gave the video to Def Jam to fulfill his contract, Billboard reported.

Grainge and other leading music industry executives see the exclusive deals as empowering the streaming services at the expense of the labels, Billboard said. Another concern was making music fans unhappy when they couldn’t buy or listen to a favorite artist’s new album because of the exclusives.

Two other Def Jam artists had previously gone with exclusive rollouts. Rihanna’s album “Anti” came out in January exclusively for streaming and purchase on Jay Z’s Tidal music service. Kanye West’s album “The Life of Pablo” was initially a Tidal exclusive when it came out in February.

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Apple, which trails only Spotify in the number of paying subscribers for music streaming, has looked to exclusives to attract new customers. With Apple’s (AAPL) deep pockets—it has $231 billion of cash—the company figures it can pay more for top exclusives than its competitors.

Still, even if Universal Music was able to prevent its stars from going exclusive with Apple and Tidal in the future, it is just one of the “big three” major record labels. Artists signed by Warner Music Group, like Bruno Mars or Kylie Minogue, and Sony Music Group, such as Britney Spears or Justin Timberlake, might still engage in exclusives with Apple.