10 ms·

“AppleMusic will pay artist for streaming during customer’s free trial period”

251 points by jflowers45 11y ago

w4 11y ago
Well look at that - good on Apple for correcting course and doing the right thing.
- deleted 11y ago
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bobbles 11y ago
It's great that they turned this around so quickly. I guess they realised that having people talking about the service for the music instead of the payment model would be better for them...
c-slice 11y ago
Actually not that surprising, Taylor Swift was featured heavily in Apple's promo video (first album art featured), so clearly contracts were in place. TS was Apple's secret weapon and could be a key differentiator from Spotify. (TS has no music on Spotify.) I think TS was in a really good bargaining position. If she had pulled out, it would have been a big loss for Apple Music. Smart Move.
doctoboggan 11y ago
I am surprised and impressed with how quickly Apple did this about-face. I am also a little surprised that twitter was the medium they choose to announce it.
- cooper12 11y ago
  > I am also a little surprised that twitter was the medium they choose to announce it. That way they can be brief and don't have to expand on the nuances of the issue. People would rather hear "We were wrong and we've fixed the problem" rather than: "We planned the service to balance human/monetary factors such as x and y, but due to bad PR we've changed the way we're doing z. We thought it was a good idea originally because...".
ghshephard 11y ago
The extraordinarily cynical side of me wonders if this is all just a massive co-branding PR exercise to dominate the news cycle with "Taylor Swift", "Apple", "Free Music", "Apple Music." Highly unlikely because it's not the type of underhanded marketing that Apple engages in, but man - All I've been reading about, seeing in my twitter feed, is talk about the 90 Day free Music Trial with Apple coming up. This has been far, far better marketing exercise than their WWDC keynote.
- socrates1998 11y ago
  Wow, this analysis just seems right. They sign a deal with TS, get her to be "outraged" then Apple does a 180 and then says it will pay the artists. TS looks good and Apple gets a shitload of free press for their new music service. I feel dumber everyday I don't see this stuff happening.
  - 001sky 11y ago
    Record labels attack Apple deals that would leave them 'completely screwed' Independents claim they could be forced out of business by free trial of new streaming service and withold popular artists such as Adele http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/11679030/Record-labels-attack-Apple-deals-that-would-leave-them-completely-screwed.html http://www.telegraph.co.uk/finance/newsbysector/mediatechnol... This was the british press about 5 days ago, so I don't think it was that cynical. TS seems to have been the straw tha nudged the issue over the top. Losing adele and taylor swift starts to give the product a black eye at some stage. Apple has $$$$ plenty in the bank to subsidze a 3 month operating loss (or whatever).
  - jen729w 11y ago
    You don't really think this is the case, do you? It's like any conspiracy theory: think about how many people would have to be "in it" to make it work. Then think, what are the chances of none of them, ever letting anything slip. To anyone. Ever. The chances are almost zero. People talk. The damage - to Swift, to Apple - it's just too large. Therefore, this is not what you think it is. There is no deeper story here. Apple screwed up, Swift is influential, they probably thought they could get a bit of good PR from changing their minds, and they did. End of story.
ekianjo 11y ago
> Apple will always make sure Artists are Paid You mean, except until yesterday where your plans said otherwise ? :)
- SG- 11y ago
  Unless they always intended to pay them from the beginning and Taylor Swift (or her managers) jumped to conclusions.
  - ekianjo 11y ago
    Actually they did not jump to conclusions, the trial wording about not paying artists was VERY clear when Apple wrote it the first time around.
kdamken 11y ago
I'm really glad to hear that they changed their minds on this one, though it's sad they needed public shaming to do the right thing. Most people don't really appreciate how hard it is to make money with music, nor the insane amount of time and effort that goes into even a single, professional quality song. This isn't a win for the big name, Taylor Swift type artists, but rather the ones she mentioned in her blog post that are just trying to make ends meet, where every penny and possible source of income counts.
smegel 11y ago
I wish he put ", period." at the end of that Tweet.
- SG- 11y ago
  I think it could have used an exclamation point myself!
pasta_2 11y ago
Spotify is truly fucked if Apple is going to pay during the free trial AND pay higher overall royalties. When the negotiations come up again with Spotify, who is already running increasing losses, things will just get worse.
- partiallypro 11y ago
  Someone, Google or Microsoft will buy them out. Use their brand name instead of their own and put their cash behind it. Letting Apple dominate the music space is something I think anyone (other than Apple itself) desires...not even the music labels/musicians.
- balls187 11y ago
  I've been a spotify premium subscriber for a number of years now, and been happy with it. Apple music seems interesting, and more competition is good, however there isn't much that makes me want to switch just yet. While Apple has a lot of things going for it, SaaS hasn't ever been their strong suit. Spotify's entire business is streaming music. Apple's streaming music service is a small fraction.
  - ghshephard 11y ago
    I was a Spotify Premium Subscriber, but then canceled when they didn't have Mylo Xyloto. I'm wondering how many top albums missing it will take before Spotify will restrict certain albums to their Paid Tier only. Regardless, now Spotify is in the crappy situation of Apple having some top albums they don't have, and Apple offering it for free (to subscribers). You really don't want to get into a $$$ fight with Apple.
- odiroot 11y ago
  No, they are not. Not everyone lives in Apple bubble. Especially outside of North America.
timothya 11y ago
Good for Apple. It's too bad it needed a really high profile artist to come out against it, but I'm glad they could listen and make the right choice. Taylor Swift has previously not put her music on other streaming services (despite them paying artists during the trial period); I wonder if she'll consider Apple Music for streaming now that they've changed their terms on this point (and if she does, will she also put her music on other streaming services?).
- IBM 11y ago
  I hope everyone realizes that withholding 1989 was about a windowing strategy to maximize overall revenue from iTunes downloads/CD sales. Now they've essentially called her bluff and she'll have to cut that short when her music is still selling like crazy 8 months later.
  - protomyth 11y ago
    I don't think she was bluffing as she has already withheld her album from Spotify. If the follow up is correct, she can still withhold it as they are not going to pay full royalties. This is attempted damage control for Apple on a Sunday night and it looks ill handled.
    - IBM 11y ago
      The story then changes from "Taylor Swift making sure artists are compensated for their work" to "Taylor Swift wants more money". Apple was never going to pay royalty rates based on people that paid $10 a month for the service on people that were paying nothing, asking that they do would make Taylor Swift look poorly.
      - protomyth 11y ago
        The story changes to Apple is still going to short change artists to promote its service. Taylor Swift will look fine as she has incredible fan loyalty and communicates with her "customers" in a way Apple cannot.
pablasso 11y ago
Does anyone has numbers on Apple Music royalties? how do they fare against Spotify, Rdio and the like?
- IBM 11y ago
  They're higher at 71.5% in the US and 73% in the rest of the world. http://recode.net/2015/06/15/heres-what-happens-to-your-10-after-you-pay-for-a-month-of-apple-music/ http://recode.net/2015/06/15/heres-what-happens-to-your-10-a...
  - JohnTHaller 11y ago
    71.5% of the monthly premium, which would work out to a difference of about a hundredth of a cent per stream. So, instead of an average $0.005 per stream, it'll be $0.0051 per stream. (I think that's what spofity averaged the last few years)
  - plorg 11y ago
    I'm honestly surprised it's that low. I know the difference is supposed to be that Apple Music accounts will all be 'paying'. But if they're only paying out low-single-digit higher rates than Spotify, I don't see how it's supposed to be meaningfully different than Spotify Premium or Tidal, except that people paying for Spotify/Tidal through iDevices are paying $13/month instead of $10, and $3 is still going to Apple. And that actually makes the previous stiffing of artists an even more raw deal. I had read elsewhere that the rate was rumored to be closer to 90%, and at that rate it would take about a 10 months of someone subscribing to Apple Music to pay out higher than Spotify Premium, which pays out at roughly 70% (considering 3 unpaid months). If you make the same comparison with Apple Music at 73% and 3 months free/unpaid trial, Spotify at 70% and 1 month, it would take more than 4 years before Apple paid out more. If you think you'll subscribe to either for more than 4 years and you care about the artists, it might be worth it. But it's going to take a long time. If that payout number is correct, a conscientious consumer might as well subscribe to Tidal (who pays out at a similar 70% rate), because they'd at least get access to higher-quality tracks and the artists aren't getting payed significantly more or less.
batmanthehorse 11y ago
First sentence of her letter was "I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple Music." So now, she needs to allow it on Apple Music or she'll look like a jerk. Apple will have this album that no other streaming service has, and they got a ton of press for it. Probably worked out pretty well for them.
- capkutay 11y ago
  even that first sentence executes perfect product placement. 'blah blah my album, 1989, blah blah new streaming service, Apple Music'
  - sarreph 11y ago
    Reminded me of this cartoon: http://mngboxers.com/wp-content/uploads/2013/12/gary-larson-far-side-cartoon-what-we-say-to-dogs-blah-blah-ginger.jpeg http://mngboxers.com/wp-content/uploads/2013/12/gary-larson-...
- JohnTHaller 11y ago
  If she's smart, she'll still hold out. 1/2 a cent per play won't add up to anywhere near as much as her sales are. Correction: That estimate was based on the average Spotify rate over the last few years. Apple has now said that the rate will be different during the trial and isn't being made public.
  - M4v3R 11y ago
    It might add to an even bigger number, now, that she had so much publicity from her open letter and tweets. People will listen to her album just out of curiosity now.
  - bedhead 11y ago
    Except in her own words: "This is not about me." She is of course, lying. So if she plays hardball with her own album's access, she will be exposed as the liar she is. Streaming revenues matter to only but the top .1% of musicians, so Taylor Swift leading the charge on this was a joke to begin with. It was always about her, and Kanye West, and Drake, and the rest of music's elite. It's like Bill Gates being the public face of abolishing the estate tax. Do you think it's a coincidence that TIDAL, the streaming service that was supposed to revolutionize the business, only had the world's wealthiest artists on stage during its unveiling? This is about a handful of artists grabbing a little more money, period.
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- cwyers 11y ago
  http://recode.net/2015/06/15/heres-what-happens-to-your-10-after-you-pay-for-a-month-of-apple-music/ http://recode.net/2015/06/15/heres-what-happens-to-your-10-a... "Apple won’t pay music owners anything for the songs that are streamed during Apple Music’s three-month trial period, a bone of contention with music labels during negotiations for the new service. But Kondrk says Apple’s payouts are a few percentage points higher than the industry standard, in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial."
  - ratfacemcgee 11y ago
    but did Apple ever say that? posting text from an article doesn't mean jack shit. Show me where Apple themselves said "We will not pay you during the free trial". the ONLY thing i can find is: http://beggars.com/group/pressrelease/90/with-regards-to-apple-music http://beggars.com/group/pressrelease/90/with-regards-to-app... which says: > In many ways the deal structure is very progressive, but unfortunately it was created without reference to us, or as far as we know any independents... >At the moment we do not have an agreement with Apple Music that would allow us to participate in the new service. so what does that mean? does it mean they are upset because they won't be getting paid, or does it mean that they are upset because their content won't be on the new service? the above article was cited in http://www.businessinsider.com.au/independent-labels-refuse-apple-music-deal-because-of-three-month-free-trial-2015-6 http://www.businessinsider.com.au/independent-labels-refuse-... that claimed: >The group’s main problem is with the three-month free trial Apple is offering to users when it launches on June 30. During that time, artists won’t be paid anything when their music is played on the platform. however, the blog post they cite doesn't at all say that. it says they won't be a part of the new service.
    - geofft 11y ago
      Why is it plausible that Recode and every other news site and Taylor Swift all made this up (or that someone fed this to them) and that Apple did not correct them but instead acted as if they are making a change in policy? I mean, it's also possible that Eddy Cue's Twitter account was hacked by Taylor Swift, well known infosec thought leader that she is. Why is nobody reporting on the real story here??
jrlocke 11y ago
One might say that their previous position was tone deaf
aamikalyan 11y ago
That's what negotiating from the position of strength means.
aamikalyan 11y ago
That's what negotiating from the position of strength means.
beaner 11y ago
It's too bad, larger artists pulling their listings during that period could have given less listened-to artists more promotion.
JohnTHaller 11y ago
Eddy Cue clarified that artists will not be paid at the streaming rate they are paid during users paid memberships. They will be paid at a different rate that isn't being disclosed: http://recode.net/2015/06/21/apple-says-it-will-pay-taylor-swift-for-free-streams-after-all/ http://recode.net/2015/06/21/apple-says-it-will-pay-taylor-s... Also: "Cue says Apple will keep the existing royalty rates it has already hammered out with the three major music labels for subscribers."
- IBM 11y ago
  That's during the free trial period. The higher rates remain once people are paid subscribers.
  - JohnTHaller 11y ago
    Right. But the trial could be significantly lower. They're not saying. It's worth nothing that by "higher rates" we are talking about a hundredth of a cent per stream.
    - IBM 11y ago
      Aren't you forgetting that this was about making sure artists were compensated for their work? That's been now met. Apple isn't going to offer them the same rate they would get when people paid for the service when they aren't just like Spotify doesn't pay premium-tier royalties on their free-tier users.
    - culturestate 11y ago
      I'm sure the new trial rates will be broadly similar to Spotify's per-stream rates, which average[1] between $0.006 and $0.0084. Apple Music has no advertising; you can't pay a percentage of revenue that doesn't exist. 1. http://www.spotifyartists.com/spotify-explained/ http://www.spotifyartists.com/spotify-explained/
      - pluma 11y ago
        They're licensing the music. Whether they make any revenue or not doesn't matter. You can't hand out other people's stuff for free and then refuse to pay anything because you didn't make any money from it. And I'm saying that as someone who thinks the current copyright system is incredibly broken.
tfigueroa 11y ago
"Pay artists" has a lot of room for interpretation. What does that mean? (I work at Pandora, so I see this as an overly simple response.)
xname 11y ago
"Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free" - What a capitalist.
- jevgeni 11y ago
  Is everyone's art equally valuable?
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flashman 11y ago
This just confirms to me what a big deal Taylor Swift is. Can anyone remember a time Apple reversed a business decision, or promised to fix some kind of technical issue, this quickly? (Critical security flaws notwithstanding.) Certainly not when Steve 'Hold Different' Jobs was still alive.[1] [1] http://www.engadget.com/2010/06/24/apple-responds-over-iphone-4-reception-issues-youre-holding-th/ http://www.engadget.com/2010/06/24/apple-responds-over-iphon...
h_o 11y ago
Apple must have calculated that her influence potential is greater than the value of if the free streaming wasn't paying the artists. I mean, she has almost 60M followers on twitter - ~20% of the US' total population. Now Apple can recalculate and pay them barely just enough to have their original projections corrected. The free press is great - and they'll probably even gain from it!
vermooten 11y ago
Am I the only one who thinks that the Taylor Swift / Apple thing was just a PR stunt designed to benefit both parties? Free advertising.
fezz 11y ago
Cleverly played by Apple and Swift to force Spotify into the bad guy spot.
bedhead 11y ago
I really, really lament Apple caving in on this. The deal they had before was perfectly reasonable - everyone's interests were aligned and both sides brought something to the table. Apple wasn't paying royalties during the trial because it makes perfect sense to have a model that says, "you make money when we make money." Besides, we all know that streaming revenues for everyone except the top .1% of artists are largely irrelevant, especially during a mere three month window. It's obvious that Taylor Swift was motivated by one thing and one thing only: maximizing her own revenue. That's it...and that's fine. But I cannot stand her disingenuous "won't someone think of the children?!" nonsense. It's like LeBron James publicly pleading for the NBA to share more of its revenue so that the younger players can be better off in retirement, while leaving out the fact that he'll personally take 90% of any incremental revenue. Taylor Swift seemed so concerned about other people, but I sure don't see her offering a pay cut or anything. Instead she successfully guilted Apple into paying because they've got a ton of money. Pathetic.
- simonh 11y ago
  If the deal were considered in isolation you might have a point, but you need to consider the competitive landscape and why Apple wants to offer the 3 month free trial. (I don't agree with your being down-voted, you're posting a valid oppinion, just one I happen not to agree with). Apple is offering a 3 month free trial in order to win market share for their service from the established streaming services. Doing that benefits Apple but does not benefits artists. Say I'm a Spotify subscriber. I cancel my Spotify service and switch to the Apple service. Artists suffer a 3 month gap in revenue during which they're not being paid either by Spotify or Apple for my listending to their music. The only people who really benefit are Apple who now get a split of the revenue instead of spotify, and the only people who really lose out are the artists who lost 3 months pay. There's no reason artists should have to forgoe revenue in order to benefit Apple in that way.
  - bedhead 11y ago
    You are talking about a three month gap for a small minority of users, who will then become paying subs for presumably many years, locked in to the world's most powerful ecosystem, at HIGHER royalty rates, with a company that is insanely well-funded and will promote the hell out of it. This is a bad thing??? There is give and take to every deal. Telling artists, "you make money when we make money" is perfectly, 100% reasonable, especially considering each side was bringing important things to the table.
a-dub 11y ago
So if I were to sign up for this thing, and only listen to one indie artist, would all the royalty money collected from me go to that artist (and related rightsholders), or would it be the same crap we already have where good ol' Taylor Swift gets a huge cut no matter what thanks to her "network effect"? None of the press around Apple Music seems to even attempt to explain how the royalty pie is actually cut up, and to me at least, that's by far the most interesting part. (And why this space is ripe for disruption)

251 points by jflowers45 11y ago

w4 11y ago

Well look at that - good on Apple for correcting course and doing the right thing.

deleted 11y ago
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bobbles 11y ago

It's great that they turned this around so quickly. I guess they realised that having people talking about the service for the music instead of the payment model would be better for them...

c-slice 11y ago

Actually not that surprising, Taylor Swift was featured heavily in Apple's promo video (first album art featured), so clearly contracts were in place. TS was Apple's secret weapon and could be a key differentiator from Spotify. (TS has no music on Spotify.) I think TS was in a really good bargaining position. If she had pulled out, it would have been a big loss for Apple Music. Smart Move.

doctoboggan 11y ago

I am surprised and impressed with how quickly Apple did this about-face. I am also a little surprised that twitter was the medium they choose to announce it.

cooper12 11y ago
> I am also a little surprised that twitter was the medium they choose to announce it. That way they can be brief and don't have to expand on the nuances of the issue. People would rather hear "We were wrong and we've fixed the problem" rather than: "We planned the service to balance human/monetary factors such as x and y, but due to bad PR we've changed the way we're doing z. We thought it was a good idea originally because...".

ghshephard 11y ago

The extraordinarily cynical side of me wonders if this is all just a massive co-branding PR exercise to dominate the news cycle with "Taylor Swift", "Apple", "Free Music", "Apple Music." Highly unlikely because it's not the type of underhanded marketing that Apple engages in, but man - All I've been reading about, seeing in my twitter feed, is talk about the 90 Day free Music Trial with Apple coming up. This has been far, far better marketing exercise than their WWDC keynote.

socrates1998 11y ago
Wow, this analysis just seems right. They sign a deal with TS, get her to be "outraged" then Apple does a 180 and then says it will pay the artists. TS looks good and Apple gets a shitload of free press for their new music service. I feel dumber everyday I don't see this stuff happening.
- 001sky 11y ago
  Record labels attack Apple deals that would leave them 'completely screwed' Independents claim they could be forced out of business by free trial of new streaming service and withold popular artists such as Adele http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/11679030/Record-labels-attack-Apple-deals-that-would-leave-them-completely-screwed.html http://www.telegraph.co.uk/finance/newsbysector/mediatechnol... This was the british press about 5 days ago, so I don't think it was that cynical. TS seems to have been the straw tha nudged the issue over the top. Losing adele and taylor swift starts to give the product a black eye at some stage. Apple has $$$$ plenty in the bank to subsidze a 3 month operating loss (or whatever).
- jen729w 11y ago
  You don't really think this is the case, do you? It's like any conspiracy theory: think about how many people would have to be "in it" to make it work. Then think, what are the chances of none of them, ever letting anything slip. To anyone. Ever. The chances are almost zero. People talk. The damage - to Swift, to Apple - it's just too large. Therefore, this is not what you think it is. There is no deeper story here. Apple screwed up, Swift is influential, they probably thought they could get a bit of good PR from changing their minds, and they did. End of story.

ekianjo 11y ago

> Apple will always make sure Artists are Paid You mean, except until yesterday where your plans said otherwise ? :)

SG- 11y ago
Unless they always intended to pay them from the beginning and Taylor Swift (or her managers) jumped to conclusions.
- ekianjo 11y ago
  Actually they did not jump to conclusions, the trial wording about not paying artists was VERY clear when Apple wrote it the first time around.

kdamken 11y ago

I'm really glad to hear that they changed their minds on this one, though it's sad they needed public shaming to do the right thing. Most people don't really appreciate how hard it is to make money with music, nor the insane amount of time and effort that goes into even a single, professional quality song. This isn't a win for the big name, Taylor Swift type artists, but rather the ones she mentioned in her blog post that are just trying to make ends meet, where every penny and possible source of income counts.

smegel 11y ago

I wish he put ", period." at the end of that Tweet.

SG- 11y ago
I think it could have used an exclamation point myself!

pasta_2 11y ago

Spotify is truly fucked if Apple is going to pay during the free trial AND pay higher overall royalties. When the negotiations come up again with Spotify, who is already running increasing losses, things will just get worse.

partiallypro 11y ago
Someone, Google or Microsoft will buy them out. Use their brand name instead of their own and put their cash behind it. Letting Apple dominate the music space is something I think anyone (other than Apple itself) desires...not even the music labels/musicians.
balls187 11y ago
I've been a spotify premium subscriber for a number of years now, and been happy with it. Apple music seems interesting, and more competition is good, however there isn't much that makes me want to switch just yet. While Apple has a lot of things going for it, SaaS hasn't ever been their strong suit. Spotify's entire business is streaming music. Apple's streaming music service is a small fraction.
- ghshephard 11y ago
  I was a Spotify Premium Subscriber, but then canceled when they didn't have Mylo Xyloto. I'm wondering how many top albums missing it will take before Spotify will restrict certain albums to their Paid Tier only. Regardless, now Spotify is in the crappy situation of Apple having some top albums they don't have, and Apple offering it for free (to subscribers). You really don't want to get into a $$$ fight with Apple.
odiroot 11y ago
No, they are not. Not everyone lives in Apple bubble. Especially outside of North America.

timothya 11y ago

Good for Apple. It's too bad it needed a really high profile artist to come out against it, but I'm glad they could listen and make the right choice. Taylor Swift has previously not put her music on other streaming services (despite them paying artists during the trial period); I wonder if she'll consider Apple Music for streaming now that they've changed their terms on this point (and if she does, will she also put her music on other streaming services?).

IBM 11y ago
I hope everyone realizes that withholding 1989 was about a windowing strategy to maximize overall revenue from iTunes downloads/CD sales. Now they've essentially called her bluff and she'll have to cut that short when her music is still selling like crazy 8 months later.
- protomyth 11y ago
  I don't think she was bluffing as she has already withheld her album from Spotify. If the follow up is correct, she can still withhold it as they are not going to pay full royalties. This is attempted damage control for Apple on a Sunday night and it looks ill handled.
  - IBM 11y ago
    The story then changes from "Taylor Swift making sure artists are compensated for their work" to "Taylor Swift wants more money". Apple was never going to pay royalty rates based on people that paid $10 a month for the service on people that were paying nothing, asking that they do would make Taylor Swift look poorly.
    - protomyth 11y ago
      The story changes to Apple is still going to short change artists to promote its service. Taylor Swift will look fine as she has incredible fan loyalty and communicates with her "customers" in a way Apple cannot.

pablasso 11y ago

Does anyone has numbers on Apple Music royalties? how do they fare against Spotify, Rdio and the like?

IBM 11y ago
They're higher at 71.5% in the US and 73% in the rest of the world. http://recode.net/2015/06/15/heres-what-happens-to-your-10-after-you-pay-for-a-month-of-apple-music/ http://recode.net/2015/06/15/heres-what-happens-to-your-10-a...
- JohnTHaller 11y ago
  71.5% of the monthly premium, which would work out to a difference of about a hundredth of a cent per stream. So, instead of an average $0.005 per stream, it'll be $0.0051 per stream. (I think that's what spofity averaged the last few years)
- plorg 11y ago
  I'm honestly surprised it's that low. I know the difference is supposed to be that Apple Music accounts will all be 'paying'. But if they're only paying out low-single-digit higher rates than Spotify, I don't see how it's supposed to be meaningfully different than Spotify Premium or Tidal, except that people paying for Spotify/Tidal through iDevices are paying $13/month instead of $10, and $3 is still going to Apple. And that actually makes the previous stiffing of artists an even more raw deal. I had read elsewhere that the rate was rumored to be closer to 90%, and at that rate it would take about a 10 months of someone subscribing to Apple Music to pay out higher than Spotify Premium, which pays out at roughly 70% (considering 3 unpaid months). If you make the same comparison with Apple Music at 73% and 3 months free/unpaid trial, Spotify at 70% and 1 month, it would take more than 4 years before Apple paid out more. If you think you'll subscribe to either for more than 4 years and you care about the artists, it might be worth it. But it's going to take a long time. If that payout number is correct, a conscientious consumer might as well subscribe to Tidal (who pays out at a similar 70% rate), because they'd at least get access to higher-quality tracks and the artists aren't getting payed significantly more or less.

batmanthehorse 11y ago

First sentence of her letter was "I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple Music." So now, she needs to allow it on Apple Music or she'll look like a jerk. Apple will have this album that no other streaming service has, and they got a ton of press for it. Probably worked out pretty well for them.

capkutay 11y ago
even that first sentence executes perfect product placement. 'blah blah my album, 1989, blah blah new streaming service, Apple Music'
- sarreph 11y ago
  Reminded me of this cartoon: http://mngboxers.com/wp-content/uploads/2013/12/gary-larson-far-side-cartoon-what-we-say-to-dogs-blah-blah-ginger.jpeg http://mngboxers.com/wp-content/uploads/2013/12/gary-larson-...
JohnTHaller 11y ago
If she's smart, she'll still hold out. 1/2 a cent per play won't add up to anywhere near as much as her sales are. Correction: That estimate was based on the average Spotify rate over the last few years. Apple has now said that the rate will be different during the trial and isn't being made public.
- M4v3R 11y ago
  It might add to an even bigger number, now, that she had so much publicity from her open letter and tweets. People will listen to her album just out of curiosity now.
- bedhead 11y ago
  Except in her own words: "This is not about me." She is of course, lying. So if she plays hardball with her own album's access, she will be exposed as the liar she is. Streaming revenues matter to only but the top .1% of musicians, so Taylor Swift leading the charge on this was a joke to begin with. It was always about her, and Kanye West, and Drake, and the rest of music's elite. It's like Bill Gates being the public face of abolishing the estate tax. Do you think it's a coincidence that TIDAL, the streaming service that was supposed to revolutionize the business, only had the world's wealthiest artists on stage during its unveiling? This is about a handful of artists grabbing a little more money, period.

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cwyers 11y ago
http://recode.net/2015/06/15/heres-what-happens-to-your-10-after-you-pay-for-a-month-of-apple-music/ http://recode.net/2015/06/15/heres-what-happens-to-your-10-a... "Apple won’t pay music owners anything for the songs that are streamed during Apple Music’s three-month trial period, a bone of contention with music labels during negotiations for the new service. But Kondrk says Apple’s payouts are a few percentage points higher than the industry standard, in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial."
- ratfacemcgee 11y ago
  but did Apple ever say that? posting text from an article doesn't mean jack shit. Show me where Apple themselves said "We will not pay you during the free trial". the ONLY thing i can find is: http://beggars.com/group/pressrelease/90/with-regards-to-apple-music http://beggars.com/group/pressrelease/90/with-regards-to-app... which says: > In many ways the deal structure is very progressive, but unfortunately it was created without reference to us, or as far as we know any independents... >At the moment we do not have an agreement with Apple Music that would allow us to participate in the new service. so what does that mean? does it mean they are upset because they won't be getting paid, or does it mean that they are upset because their content won't be on the new service? the above article was cited in http://www.businessinsider.com.au/independent-labels-refuse-apple-music-deal-because-of-three-month-free-trial-2015-6 http://www.businessinsider.com.au/independent-labels-refuse-... that claimed: >The group’s main problem is with the three-month free trial Apple is offering to users when it launches on June 30. During that time, artists won’t be paid anything when their music is played on the platform. however, the blog post they cite doesn't at all say that. it says they won't be a part of the new service.
  - geofft 11y ago
    Why is it plausible that Recode and every other news site and Taylor Swift all made this up (or that someone fed this to them) and that Apple did not correct them but instead acted as if they are making a change in policy? I mean, it's also possible that Eddy Cue's Twitter account was hacked by Taylor Swift, well known infosec thought leader that she is. Why is nobody reporting on the real story here??

jrlocke 11y ago

One might say that their previous position was tone deaf

aamikalyan 11y ago

That's what negotiating from the position of strength means.

aamikalyan 11y ago

That's what negotiating from the position of strength means.

beaner 11y ago

It's too bad, larger artists pulling their listings during that period could have given less listened-to artists more promotion.

JohnTHaller 11y ago

Eddy Cue clarified that artists will not be paid at the streaming rate they are paid during users paid memberships. They will be paid at a different rate that isn't being disclosed: http://recode.net/2015/06/21/apple-says-it-will-pay-taylor-swift-for-free-streams-after-all/ http://recode.net/2015/06/21/apple-says-it-will-pay-taylor-s... Also: "Cue says Apple will keep the existing royalty rates it has already hammered out with the three major music labels for subscribers."

IBM 11y ago
That's during the free trial period. The higher rates remain once people are paid subscribers.
- JohnTHaller 11y ago
  Right. But the trial could be significantly lower. They're not saying. It's worth nothing that by "higher rates" we are talking about a hundredth of a cent per stream.
  - IBM 11y ago
    Aren't you forgetting that this was about making sure artists were compensated for their work? That's been now met. Apple isn't going to offer them the same rate they would get when people paid for the service when they aren't just like Spotify doesn't pay premium-tier royalties on their free-tier users.
  - culturestate 11y ago
    I'm sure the new trial rates will be broadly similar to Spotify's per-stream rates, which average[1] between $0.006 and $0.0084. Apple Music has no advertising; you can't pay a percentage of revenue that doesn't exist. 1. http://www.spotifyartists.com/spotify-explained/ http://www.spotifyartists.com/spotify-explained/
    - pluma 11y ago
      They're licensing the music. Whether they make any revenue or not doesn't matter. You can't hand out other people's stuff for free and then refuse to pay anything because you didn't make any money from it. And I'm saying that as someone who thinks the current copyright system is incredibly broken.

tfigueroa 11y ago

"Pay artists" has a lot of room for interpretation. What does that mean? (I work at Pandora, so I see this as an overly simple response.)

xname 11y ago

"Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free" - What a capitalist.

jevgeni 11y ago
Is everyone's art equally valuable?

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flashman 11y ago

This just confirms to me what a big deal Taylor Swift is. Can anyone remember a time Apple reversed a business decision, or promised to fix some kind of technical issue, this quickly? (Critical security flaws notwithstanding.) Certainly not when Steve 'Hold Different' Jobs was still alive.[1] [1] http://www.engadget.com/2010/06/24/apple-responds-over-iphone-4-reception-issues-youre-holding-th/ http://www.engadget.com/2010/06/24/apple-responds-over-iphon...

h_o 11y ago

Apple must have calculated that her influence potential is greater than the value of if the free streaming wasn't paying the artists. I mean, she has almost 60M followers on twitter - ~20% of the US' total population. Now Apple can recalculate and pay them barely just enough to have their original projections corrected. The free press is great - and they'll probably even gain from it!

vermooten 11y ago

Am I the only one who thinks that the Taylor Swift / Apple thing was just a PR stunt designed to benefit both parties? Free advertising.

fezz 11y ago

Cleverly played by Apple and Swift to force Spotify into the bad guy spot.

bedhead 11y ago

I really, really lament Apple caving in on this. The deal they had before was perfectly reasonable - everyone's interests were aligned and both sides brought something to the table. Apple wasn't paying royalties during the trial because it makes perfect sense to have a model that says, "you make money when we make money." Besides, we all know that streaming revenues for everyone except the top .1% of artists are largely irrelevant, especially during a mere three month window. It's obvious that Taylor Swift was motivated by one thing and one thing only: maximizing her own revenue. That's it...and that's fine. But I cannot stand her disingenuous "won't someone think of the children?!" nonsense. It's like LeBron James publicly pleading for the NBA to share more of its revenue so that the younger players can be better off in retirement, while leaving out the fact that he'll personally take 90% of any incremental revenue. Taylor Swift seemed so concerned about other people, but I sure don't see her offering a pay cut or anything. Instead she successfully guilted Apple into paying because they've got a ton of money. Pathetic.

simonh 11y ago
If the deal were considered in isolation you might have a point, but you need to consider the competitive landscape and why Apple wants to offer the 3 month free trial. (I don't agree with your being down-voted, you're posting a valid oppinion, just one I happen not to agree with). Apple is offering a 3 month free trial in order to win market share for their service from the established streaming services. Doing that benefits Apple but does not benefits artists. Say I'm a Spotify subscriber. I cancel my Spotify service and switch to the Apple service. Artists suffer a 3 month gap in revenue during which they're not being paid either by Spotify or Apple for my listending to their music. The only people who really benefit are Apple who now get a split of the revenue instead of spotify, and the only people who really lose out are the artists who lost 3 months pay. There's no reason artists should have to forgoe revenue in order to benefit Apple in that way.
- bedhead 11y ago
  You are talking about a three month gap for a small minority of users, who will then become paying subs for presumably many years, locked in to the world's most powerful ecosystem, at HIGHER royalty rates, with a company that is insanely well-funded and will promote the hell out of it. This is a bad thing??? There is give and take to every deal. Telling artists, "you make money when we make money" is perfectly, 100% reasonable, especially considering each side was bringing important things to the table.

a-dub 11y ago

So if I were to sign up for this thing, and only listen to one indie artist, would all the royalty money collected from me go to that artist (and related rightsholders), or would it be the same crap we already have where good ol' Taylor Swift gets a huge cut no matter what thanks to her "network effect"? None of the press around Apple Music seems to even attempt to explain how the royalty pie is actually cut up, and to me at least, that's by far the most interesting part. (And why this space is ripe for disruption)