Why Has Apple Acquired Modest Brit Music Tech Start-Up Platoon?

Why Has Apple Acquired Modest Brit Music Tech Start-Up Platoon?

One is a technology colossus that is the biggest company in the world and worth almost $800 billion, despite seeing its share price take a tumble during the big tech sell-off since October. The other a relatively humble British technology start-up that provides a platform for still low profile musicians to distribute and sell their work, founded in 2016 and last valued at just $3.78 million. The first company is Apple and the second Platoon. It’s not often that companies like Apple acquire companies like Platoon. So what’s Apple’s reasoning behind the deal and its strategic significance to Apple Music, the division that iTunes belongs to?

Firstly, the reason that Platoon was on Apple’s radar was the involvement of Denzyl Feigelson, one of the start-ups three co-founders, along with Ben Grabiner and Saul Klein. Feigelson is described as a music industry veteran with a strong reputation. And crucially, he had a stint as an executing with iTunes before leaving on good terms and remaining involved with Apple. He describes himself as a ‘long term advisor’ to the company and has helped them with Apple Music and UK-based events such as the iTunes Festival.

Platoon is something like a musician agency for the digital era. The company uses big data analytics to both identify musical talent (though it also works on a smaller level with other creatives such as writers) and then help them produce, distribute and sell their work. Distribution and sales are also based on analytics which identify the best way to reach and sell to the right target audience and demographic of the individual artist.

The significance for Apple is the company’s long term strategic push into content. With iPhone sales having peaked, content is seen as the most viable option for further long term growth. The tech giant is poised to move into television and film content streaming and has signed up high profile stars such as Oprah Winfrey and Steven Spielberg to make programmes for it. The exact business model Apple plans to adopt is not yet clear.

And Apple Music is also developing its interests in exclusive content. Apple Music is beefing up the scope of its offering as it competes with Spotify and original, preferably exclusive, content is seen as key to that. The big music labels still represent a source of friction for music streaming companies with the two business models having clear points of conflict. Platoon artists could be offered a digital home by Apple, as an alternative to signing with a major label, furthering Apple’s interest in building up its original content catalogue.

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