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You are here: MacNN Forums > News > Mac News > Cue: Apple will pay royalties for three-month free Music trial

Cue: Apple will pay royalties for three-month free Music trial
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Jun 22, 2015, 04:06 AM
 
Reversing course after an outcry from artists, Apple Senior Vice President of Internet Software and Services Eddy Cue has announced on Twitter that the company will, in fact, pay rights holders -- which generally includes the artist -- during the forthcoming Apple Music subscription service's three-month free trial period. Apple's original agreement had said that no royalties would be paid while customers enjoyed the trial, prompting protests from indie and small labels as well as artists.

Apple had initially put forth the argument that while rights holders would not be paid during the 90-day free trial period, the company would actually pay slightly higher percentages of revenue that the industry standard (73 percent in most countries, compared to the average 70 percent), meaning that the owners of the music would make the "missing" revenue back over time. Under the changed plan, rights holders will still receive the higher revenue percentages.



However, small indie labels in the UK and a number of high-profile artists protested the prolonged gap in earnings -- far longer than any other streaming service -- and feared that their current primary source of streaming revenue, rival service Spotify, would see a mass defection of paying users as customers left to enjoy a free three-month similar service from Apple. This, the labels and others argued, would effectively amount to a drought of any significant streaming revenue for months on end, enough to force some independents to go out of business. It should be noted that other services -- such as Spotify and Rdio -- also do not pay royalties during their own month-long free trials.

Cue said that the decision to change course was made jointly in partnership with Apple CEO Tim Cook. He later clarified his brief Twitter statement to say that rights holder would receive a per-stream fee -- similar to what is now paid when iTunes Match users download songs from their cloud locker -- during the trial period, and would then receive the previously-agreed percentage of revenue from users that become paid subscribers.

Apple's Music app, to be revamped along with iOS 8.4 on or near June 30, will feature a number of changes to the interface to streamline searching and playing, and will include several new free components as well as the subscription-based Apple Music service. All users can listen to genre-based radio stations presently seen on iTunes Radio, as well as participate in a new music-oriented social service called Connect, along with utilizing the program for local and cloud playback of users' own libraries, just as they do now.

The subscription Apple Music service will cost $10 a month after the three-month trial, but families can add up to six members with individual accounts for $15 per month. The available iTunes Music Library for streaming will feature over 30 million songs, though not all artists will be represented -- the Beatles, for example, have never licensed their music for any streaming service, despite a cordial relationship with Apple.



Taylor Swift, who pulled her catalog from Spotify after complaining of poor percentages of revenue from her popular albums, was one of the artists protesting Apple's original offer. She agreed to make her back catalog available, but withheld her top-selling album, 1989 as she has from other streaming services.

Cue told Re/Code that he had spoken with Swift following the policy reversal, but did not say if she had relented in making the hit album available. "She was thrilled to hear from us and that we were making the change, and we were grateful for that," Cue said.
     
oobeto
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Jun 22, 2015, 10:36 AM
 
Apple has done the right thing. What they should have done from the start.
     
Charles Martin
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Jun 22, 2015, 11:20 AM
 
Agreed. It is pocket change to them in terms of extra expense, and will win over a lot of reluctant artists. Spotify should be terrified at this point.
Charles Martin
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MikeXRyan
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Jun 22, 2015, 12:16 PM
 
#BoycottTaylorSwift - another greedy millennial - gimme gimme gimme - she is disgusting.
     
Flying Meat
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Jun 22, 2015, 12:52 PM
 
I won't boycott Taylor Swift, or anyone that stands up for their, and other's, due income.
I'm not a fan, so I will not be buying her stuff, but I applaud her stand, and Apple's response.

Good for everyone.
     
Charles Martin
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Jun 22, 2015, 02:10 PM
 
I'm not a fan of TS either, but I thought she worded her open letter to Apple very well. The media are misreporting this as being solely her doing, but that is wildly inaccurate: it was the indie record labels that pushed Apple into seeing the light about living without three months of income (even if you make it all back and then some in the long run).
Charles Martin
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wireboy
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Jun 22, 2015, 03:59 PM
 
I agree completely. I couldn't care less about her crappy music but the point is a valid one and she expressed it quite well.

MikeXRyan - Unless of course you were kidding, are you kidding? See how you react to a third party arbitrarily deciding not to pay you for your work.
     
jdonahoe
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Jun 22, 2015, 04:43 PM
 
When I first heard on NPR that Apple was asking the Indie artists to suck it up for the 3 month trial period, I thought that really sounded bad for Apple PR. I'm glad to see they saw the light and will be the ones sucking up, hell , they can easily afford it.
     
climacs
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Jun 22, 2015, 05:29 PM
 
agreed with all those above, this is not about Taylor Swift (though I do like her music, it's a good example of well-crafted pop, even if that's not your thing). She's standing up for all recording artists including those currently getting shafted by Pandora etc.
     
robertdupuy
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Jun 22, 2015, 10:21 PM
 
It's pretty standard not to pay royalties on free.

But OK, give them 10%...no wait, I'm feeling generous, give them 100%
     
coffeetime
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Jun 23, 2015, 01:47 AM
 
Taylor Swift set a much better example than other crazy-wacky-sex-driven pop singers. She knows how to stand up for herself and others.
     
Ham Sandwich
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Jun 27, 2015, 06:32 PM
 
Curious... Apple will pay 0.2 cents per song downloaded during the "free trial." How much are artists going to be paid per song (on avg.) once the trial ends?
     
   
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