Apple Music steps closer to becoming a record label–and why not?

Apple Music is reportedly launching a publishing division. This would make it easier for Apple to license music, and it could also create a channel for the company to establish direct development deals with new artists. Many artists’ paths to wealth and fame, after all, start with publishing and development deals, not recording contracts. Apple may want to be in a position to capture the good ones.

The report says Apple promoted Elena Segal from the iTunes legal team to the head of the new publishing entity, which will comprise “operations, commercial, publisher relations, and A&R” divisions. Apple Music got a new leader last month in Oliver Schusser; the new publishing arm may be part of his artist relations strategy.

Apple Music, with more than 40 million paying subscribers, has outperformed expectations since its 2015 launch. Some of its success owes to exclusive arrangements it’s won with hot artists (like Drake). Publishing arrangements with new artists both sends an “artist friendly” message and may serve as a legal groundwork for future exclusive arrangements.

A publishing deal may be a way for Apple to enter a sort of incubation arrangement with an artist. And there’s no reason such a relationship with Apple couldn’t lead to other artist development and promotional functions that are typically the domain of a record label.

And why not? Apple is home-growing video content. And its growing services business is proving that the company has a built-in audience–a sort of affinity group–that’s ready to buy everything from apps to books to accessories. This might extend to music too. For the Apple faithful, the fact that Apple Music plucked some artist from anonymity and developed them might be a good enough reason to have a serious listen.

Many record labels would kill for that kind of built-in audience. Some smaller, boutique labels (Glassnote, 4AD) have it, but not many big labels.

So have fun, Apple Music! Start a label, or just start acting like one. Steve would have liked that. Just one thing. Keep Tim Cook and Phil Schiller away from the A&R department. The Dad Rock market is already covered, and U2 is tired.