To Apple, Love Taylor

http://taylorswift.tumblr.com/post/122071902085/to-apple-love-taylor

by milen • 11 years ago

891 511 11 years ago

taylorswift.tumblr.com

sarreph• 11 years ago

These are not the complaints of a spoiled, petulant child.

I am starting to doubt that Taylor Swift really is as 'representative' as she wishes to portray, and not simply greedy, considering the extent to which she avoids non-profit-maximising revenue streams (e.g. Spotify).

jeffehobbs• 11 years ago

That is literally her choice to make, as it's her name and her work that's being sold here. And good for her (and her management team, and her management team's management team) for making it.

mbrock• 11 years ago

She's a startup.

fenomas2• 11 years ago

..she avoids non-profit-maximising revenue streams

Like someone running a business you mean?

Coding_Cat• 11 years ago

Well, the same argument of "This is a terrible thing for up-an-coming (or niche) artists" could be made against Spotify's business model.

And slightly off-topic, I fail to see how anyone could call any of this the complaints of a spoiled child even if she would flat out say "fuck you, pay me". Are you not allowed to ask for your dues if you're rich already?

AndrewDucker• 11 years ago

She avoids Spotify because they wouldn't let her music be only available for paying users.

Basically, she refuses to be ad-supported, or give her music away.

mhenr18• 11 years ago

Doesn't that logic mean she should pull her music from all radio stations?

davegardner• 11 years ago

Well that's not entirely true, since her music is available on YouTube.

briandear2• 11 years ago

How is wanting to be paid being "greedy?" Give me 10% of your salary please. If you refuse, it's clear you're just greedy.

gavanwoolery4• 11 years ago

Hate to make the comparison, but drug dealers have a saying "the first hit is free." In this context, I think making the first months free lowers resistance to get people on the service, and will ultimately serve artists better in the long run. That said, I don't know what rates Apple pays out to artists who use this service, so I can't comment there. Anyhow, Apple has always run its business very aggressively so this move does not surprise me. $0.02

hahainternet5• 11 years ago

In this context, I think making the first months free lowers resistance to get people on the service, and will ultimately serve artists better in the long run

So, Apple should pay for it, rather than attempting to enforce themselves as a middleman who takes only profit as they have done in every other sphere.

Dylan168073• 11 years ago

On the other hand I could argue that making apple pay leads to fewer/smaller free trials which leads to less money for the artists.

Making Apple's revenue be directly tied to artist revenue makes a lot of sense.

gavanwoolery4• 11 years ago

I agree - Apple should pay for it, but I don't think they will unless this causes some uproar (which it could).

bhickey• 11 years ago

Hate to make the comparison, but drug dealers have a saying "the first hit is free."

There's a difference between not charging the end user and not paying the supplier.

gavanwoolery4• 11 years ago

Good point :)

on_and_off• 11 years ago

In your comparison, the dealer has to pay the cost of this free sample, not the drug producer. Offering several weeks/months for free is nothing new in the music streaming industry but usually the service is the one that has to swallow that cost.

gavanwoolery4• 11 years ago

Additional note - I'm not condoning this behavior, just saying that it does not surprise me :)

hahainternet5• 11 years ago

Both sides of this disagreement are hilariously petty. Both desperate to hold on to every last penny they can get hold of.

The music industry has been dying for a while but this really is a fantastic example of it. Everyone who thought Apple cared about artists now has to come up with a new rationalisation.

JoeAnzalone• 11 years ago

Did you not read the whole post or do you just not believe her?

This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt.

synaesthesisx• 11 years ago

Considering she's 25 and her net worth is north of $300mil...I don't think the money is relevant to her

hahainternet5• 11 years ago

I don't believe her. She wasn't some struggling songwriter desperately touring with a band. It's just guff.

1stop3• 11 years ago

So Apple run a loss-leader... where they don't incur the loss, and just get the lead.

Scum.

Dylan168073• 11 years ago

Any definition of loss that says Apple suffers none would also say that the artists suffer none.

Likewise, any lead Apple gets here is shared with the artists.

This is rude to force on artists without asking, but only because they're not asking. It's not scummy.

yincrash2• 11 years ago

Except the loss-leader is being used to steal users from other streaming radio services that _are_ currently paying labels & artists. So any users that switches from Spotify to Apple for example is a user that was paying artists but is now not for 3 months.

logicallee2• 11 years ago

That analogy would apply if the loss got people in the door, but they bought SOMETHING ELSE that ensured profits. For example, in this case if free music got them onto Apple's platform (loss) where they then bought a bunch of apps (unrelated to music and the source of profit).

For anyone who doesn't know, a loss leader is something advertised like bread for 50 cents or something, where the store loses money on each and every sale. It's a customer acquisition cost, and the goal of this is to "lead" with the loss, get people in the store, and there they will buy not only bread but anything else they need at the time, at normal market prices. Normal market prices give enough profit to offset the loss taken on the "lead." This works because people don't just go to a store and buy the one marked-down item and nothing else. (Or more specifically the extra profit for people who buy other things after only coming in due to the loss leader, covers the loss on them, and on everyone who only gets the loss leader.)

1stop3• 11 years ago

That's a specific (but common) use of the loss-leader strategy, but not the definition.

The strategy itself is to sell something at a loss, to get a lead/marketshare/conversion.

dombili2• 11 years ago

Not sure I understand this argument. Shouldn't she complain about the record companies rather than Apple? It's not like Apple's making money during that free 3 month period.

izacus• 11 years ago

What do the records company have to do with Apple demanding that she gives away her songs for free to stay on iTunes music service?

ikeboy• 11 years ago

That's only to join Apple Music, not to stay on iTunes.

dombili2• 11 years ago

In deals like this, service providers don't have the upper hand, content providers do. Apple wouldn't have been able to offer free 3 month trial if record companies wouldn't have agreed to it. Maybe I'm misinformed, but did Apple come out and say that if she doesn't put her albums on its streaming service, she'd be off iTunes music service? Why on earth would they do that? It'd be a PR nightmare for them and they'd lose money.

mnx• 11 years ago

It seems really weird to me that apple would get away with paying nothing for the 3 months. Especially since it's not like they are anything but yet another competitor in an already crowded space.

x5n13• 11 years ago

It's okay, the notice is in your e-mail inbox and your music is already online... If you don't like it, write them an e-mail, put: "2 legit 2 quit" in the subject line. /s

jws5• 11 years ago

This whole "pay nothing" idea is strange to see on HN.

Apple developed the software, is footing the server, power, bandwidth, and ops bills for three months all for free. The labels are chipping in their content for three months.

Sounds like everyone is bringing something to the table. Apple is incurring real costs. The labels, not so much.

Three kinds of customers will try the service:

People who buy their music: these will either become long term subscribers or not like the service and buy the songs they want anyway. Perhaps slightly delayed.

People who currently freeload: no loss for the trial. Possible huge win if they subscribe.

People using another streaming service: this is where the labels might actually give something. If a customer cancels their existing service while trying Apple's that will reduce the label's take by up to ~25% for the year. Month alignment and a comparison period will both drop this.

I suspect the third category is not the target audience. A small loss on service switchers is worth the big win for the labels in converting freeloaders to customers.

sanswork11• 11 years ago

The labels and artists have already incurred the costs to produce the content, their costs do exist.

Apple built a service that wouldn't exist without the content. The content would still exist on other services without Apple though.

acyacy• 11 years ago

What would you tell Youtube or Soundcloud? They also foot the bill.

Apple is placing the value of artists work at $0 in a bid gain market share. It should be them who incurs the full cost not the artist.

When the music is offered on free, the prime beneficiary is Apple.

vacri5• 11 years ago

Apple is incurring real costs. The labels, not so much.

It's really weird that you specify "developing the software" as a real cost, but not "developing the music".

mcintyre19944• 11 years ago

I get the typical arguments that things being available free might not affect sales - but in this case I think they'll see a direct impact.

I think they'll get a pretty large amount of trial users simply by advertising it in iTunes - oh you're about to buy this album? Why don't you listen to it and the majority of our catalog free for three months instead?

Other than Android they have a lot of music use cases supported, free of charge - why would you buy?

I honestly don't know how much this will affect sales but Apple are certainly in a position to push users away from those sales and toward the free service.

JohnTHaller4• 11 years ago

I don't think you understand how music usually works for most independent bands. As I've helped a couple friends put out independent albums, here's the basics.

A band will put in a long time creating an album: writing the songs, orchestrating, rehearsing, reworking, etc. Then they pay real money for recording, editing and mastering as well as paying an artist and photographer to create the album art. They're also creating marketing materials online and off. This is all for a usually small time period when a new album will sell. And when streaming (which generally makes them next to nothing) will hit its peak. All these costs are front loaded and then there's a usually short time period where the band hopes to make this money back. During this time, the band is spending additional money and time doing marketing and promotion as well.

Apple's deal is a raw one for these artists as they'll lose a good chunk of revenue during that small time period. And it will leech purchases away from iTunes as well. I can guarantee that Apple will have prominent notices within iTunes about which albums are available on Apple Music and suggest that would-be purchasers sign up.

Plus there's the fact that Apple is threatening independent artists with removal from iTunes if they don't agree to stream for free on Apple Music. And the fact that these artists can't just decide to sell the music themselves on their website to iOS users because, thanks to Apple's carefully-designed walled garden, iOS users can't download music from the web or 3rd party apps and add it to their music library like they can on Android.

Dwolb• 11 years ago

I think you haven't quantified the artists' opportunity costs. The idea is a customer may swap a streaming service which pays artists for Apple's streaming service which doesn't pay artists. Therefore artists may be losing money they otherwise would have typically made.

ethagknight• 11 years ago

Apple's enormous cost in launching the service is the best counterpoint I've read. 3 month free trial means no revenue for Apple too. Apple is certainly in a better position than most to endure atartup risk through trial.

There's another point being overlooked regarding how music is consumed: music is listened to repeatedly over months, and the free trial is no different than a promotional period. Artists, even indies, will still receive income from the myriad other services, and will soon receive a better rate from Apple. Distribution is an enormous service to the artists, and it's value shouldn't be overlooked.

That being said Taylor Swift has every right to pass on Apple's offer, and it's great for the recording industry to have a major check/balance like Swift.

Unrelated, but interested to see if artists will ever abandon the labels and go direct to distribution. I'm sure labels provide more value than people want to acknowledge.

Edit: formatting

b1zguy• 11 years ago

I must say, Swift is a pretty good writer; yet this perception is warped by my surprise to be honest. I guess I'll go looking out for more of her written works when I next have a free moment to make a better judgement.

x5n13• 11 years ago

Taylor did not write that... at least I don't think that she did.

morganvachon2• 11 years ago

You'd be surprised. I'm not a fan of her music (if I had kids they probably would be) but she's very hands-on with her image and if it's on her tumblr page, she wrote it. I respect her as a person and from what I've seen she's very intelligent and articulate.

OldChap• 11 years ago

Indeed! The ranks of high literature have not seen such finesse & Swift wit in prose since dear Jonathan and Gulliver's Travels.

(it's not War and Peace FFS, it's not even written at a college level. Why are people surprised or even impressed by basic literacy?)

sanswork11• 11 years ago

3 months free to buy market share makes sense but I am amazed to hear that they are doing it by just not paying the content producers during those 3 months. I'd be doing the same thing in her place. Apple has the cash to run a loss leader on this.

nemik2• 11 years ago

From http://www.aboveavalon.com/notes/2015/6/13/apples-cash-dilem... it seems like Apple may not actually have the cash to do this, not in the USA at least and it would need to pay taxes on the cash it is holding outside the US to pay the majority US labels/producers/artists.

Not that this excuses what they're trying to pull here or anything. By trying to weasel out of paying any US taxes, they can't spend their own money. So in this case they really might be too poor to make this deal work otherwise.

Good for Taylor Swift to stand up to this kind of crap.

briandear2• 11 years ago

Not defending apple for not paying artists, but I will defend their 'weaseling' out of US taxes. U.S. Corporate taxes are among the highest in the world and until Washington starts lowering their confiscatory tax rates, I would encourage all businesses to avoid repatriating earnings. A 10% tax rate is high enough.

nrp• 11 years ago

Per the RIAA, the entire recorded music industry in the US recorded under $7 Billion in revenue in 2014. Apple has north of $20 Billion in cash in the US. There are likely many reasons for Apple to make the move they did, but it is unlikely cash on hand was one of them.

zymhan2• 11 years ago

Would they have to pay taxes all of the overseas earnings if they use just some of it? I figured they only paid tax on what they actually bring back here.

wmeredith• 11 years ago

"it would need to pay taxes on the cash it is holding outside the US"

Oh, the horror.

spinchange2• 11 years ago

They "only" have about 22 BILLION in American cash! They can raise capital in the bond market in perpetuity secured against all their global cash. There's demand for debt like Apple's. SO, they absolutely, unequivocally, unquestionably can pay the artists. This is a business decision based on greed - just like leading a wage suppression cartel. They are not too poor!

chernevik• 11 years ago

They can almost certainly borrow against their foreign holdings.

simonh2• 11 years ago

By trying to weasel out of paying any US taxes, they can't spend their own money.

It's not about avoiding paying any US taxes, it's about avoiding paying US taxes on earnings abroad. This is why so many Americans living abroad are giving up their US citizenship. I'm a Brit living in London and I know several American born friends that have become British citizens to avoid paying both UK and US taxes on their earnings. In fact the current mayor of London, Boris Johnson, is Anglo_America and even though he has never lived or worked in the USA, because he had US citizenship the IRS hit him with a massive tax bill on his lifetime earnings in the UK. On what possible basis could anyone consider that appropriate? He promptly gave up his US citizenship.

The US Government's attitude to earnings abroad is IMHO utterly reprehensible. I'm not aware of any other country that does this. I'm not a US citizen but I do work for a US owned company.

cowsandmilk• 11 years ago

That article discusses buybacks and dividends.

Buybacks and dividends are post-tax expenses.

Paying royalties is an expense that comes before taxes. If they bring $500MM over and pay it as royalties, they would pay no taxes on it.

rndstr• 11 years ago

it seems like Apple may not actually have the cash to do this

Maybe they could do a Kickstarter campaign?

hookey• 11 years ago

Are there even any artists that agree to this? The first three months of Apple Music will essentially be “free music from artists who would give away their music for free”.

revelation• 11 years ago

It's not content producers, it's content right holders. Presumably they entered into this deal freely.

Is this a dick move from Apple? Sure. But the day I'll be arguing on behalf of music labels and distributors is the day the hell freezes over. Their situation is entirely of their own making.

bestnameever2• 11 years ago

I agree and it seems unreasonable of Apple. To me it conveys that they don't value the content musicians bring.

mikehearn3• 11 years ago

The other rationale I've heard is that if Apple paid for it out-of-pocket it could be considered anticompetitive for using predatory pricing.

This circumstance, in which Apple essentially pre-installs the service on every device and subsequently offers it for free, isn't so different from 1990s Microsoft bundling IE with Windows to undercut Netscape.

peteretep6• 11 years ago

    > just not paying the content producers

I suspect the record labels, with whom the deal was cut, would see themselves as the music producers, in more than just the pedantic sense of the word.

Someone somewhere invested an absolute shit-ton of cash in getting Ms Swift famous, producing her records, promoting her concerts, payola, etc, with absolutely no promise of return.

pablovidal852• 11 years ago

What stops her from joining after the 3 month trial period?

Heliosmaster• 11 years ago

Everyone who signs up has 3 months free trial from that day, not that the first 3 months of the service (since it goes live) are free for everyone.

pablovidal852• 11 years ago

Still, she could join in once a desired number of users finished their trial period and started paying.

kbrwn• 11 years ago

Can anyone at Apple (or perhaps formally at Apple) explain why this is the case? It seems like a raw deal that no sane musician would ever agree to. Imagine if when the first iPhone came out AT&T told Apple they were giving every customer a free trial with the device for 3 months before they pay for it Apple would have laughed and chose another carrier for its exclusive deal. I don't agree with the model of payment that musicians currently expect (imagine if developers recieved payment everytime a user used and app!) but if that was the norm I don't think many would just agree to put their app on the appstore for 3 months without payment.

unfamiliar3• 11 years ago

imagine if developers recieved payment everytime a user used and app!

Honestly, $10 a month to use every app sounds pretty good for me, bad for developers.

mmorris• 11 years ago

It depends on how much uptake you get, doesn't it? For example, I spend less than $10/mo on apps (and for that matter, music too). If that's the case for enough users who get the new deal, this would be a net gain for developers. I think that's why you get developers(/musicians) to agree to it.

contentfairplay3• 11 years ago

Can anyone at Apple (or perhaps formally at Apple) explain why this is the case?

Apple is a super secret walled garden, full of itself. From my experience with people that work there, I doubt any of them would even know why (let alone come out here to explain).

contentfairplay3• 11 years ago

Could you explain the downvotes? I'm new to HN and would like to learn.

ScottWhigham2• 11 years ago

I didn't downvote but can see that some people might, in addition to what was previously mentioned, be upset by the vagueries of "From my experience with people that work there..." We don't know you - how many people do you know who have worked there? What were there roles (or thereabouts)? It's just so vague that I can't really derive any value from your post.

thirdsun• 11 years ago

Well, you can buy apps - which also applies to albums/music.

Steko3• 11 years ago

I imagine Apple's argument is:

(1) They bring an enormous number of new subscribers and that this 3 month trial maximizes revenue for everyone including the artist.

(2) they pay a slightly higher royaly share than spotify in part because of this longer trial.

(3) Apple shares revenue with the artist in the same 70/30 split we see elsewhere and the 30% is the finders fee they get for delivering many of their x hundred million users to the service. Since there's no revenue in the first 3 months, 70% of $0 is $0. Apple eats the bandwidth/server costs of the service in this time with no revenue coming in.

(4) Spotify paid users are fairly happy with that service and won't all switch to Apple Music overnight and the same with people who buy music and radio so it's not like all the money these artist's see turns off for 3 months. The free trial effect will be heavily staggered as a steady stream of users signs up over years.

TazeTSchnitzel• 11 years ago

(or perhaps formally at Apple)

You were probably looking for formerly.

Spooky232• 11 years ago

It's pretty obvious. They are going to take streaming to a whole new level. My dad doesn't know what Spotify is, but has an iPhone and is a couple of clicks away from lighting this service up.

You give away a couple of months, get people hooked and you and reap years of recurring revenues. It's a model that works for drug dealers, razor blade makers (Gilette gives away 5 packs of blades in many schools) and SaaS companies.

I don't really feel too bad for Taylor Swift. She doesn't get a dime from radio airplay as an artist. But she benefits immensely from the marketing and promotional value of having it played.

aGuyNamedJonas• 11 years ago

Artists who's songs are played on the radio are paid for every time it's played on air. Or did I get your last sentence wrong there?

sangnoir2• 11 years ago

As someone else alluded to: drug suppliers still get paid for those free 'hits'. It's the distributor who swallows the cost in exchange for recurring revenue.

CPLX• 11 years ago

imagine if developers recieved payment everytime a user used and app

If software developers were compensated for their creative output the way musicians are there wouldn't be so many software developers.

I had a really innovative startup idea once where I planned to have developers work for years to create hit software products that made many people's life better and then get into a crappy van and travel the country to do 90 minute demos of their product for a few hundred dollars.

But only if they had a genuinely successful product mind you, obviously being merely competent at software development meant you didn't get paid at all, you had to actually amass significant numbers of fans of your products willing to come to these demos.

Never did figure out why I didn't get more developers interested in the platform.

unfamiliar3• 11 years ago

I agree with everything she said... but she didn't answer the question she posed at the start: why is she withholding 1989, (and not any of her other albums), and what does that have to do with the 3 month trial? If she disagrees with the free trial don't put any of your music up for that time span.

sanswork11• 11 years ago

She probably is withholding the rest like on Spotify but people typically only care about the newest album. Alternatively maybe it's to stop them from being able to promote their service as being the only one with 1989 on it?

m_fayer2• 11 years ago

The one album can be seen as her token of protest without going as far as shunning the service as a whole. So, this is probably a carefully calibrated objection, and we're not privy to the details of why she did it this way and not some other way.

vacri5• 11 years ago

There may be pre-existing contractual obligations that make it harder to pull the back catalogue.

dublinben• 11 years ago

Or she and her label recognize that the back catalog is not as valuable as the latest album. Giving away access to the back catalog on free streaming services will act to develop fans, and increase purchases of the new album. This new album that is not available on free streaming services.

sangnoir2• 11 years ago

If she disagrees with the free trial don't put any of your music up for that time span

Because Apple will not allow her to do so. It is not 3 universal calendar month: every user gets 3 months free when they start a subscription, depending on when they sign up for the service. Artist cannot opt-out of the free-service tier catalog and just go with the paid users.

So Taylor Swift is withholding her music because she won't get paid for all the listens by users in their first 3 months.

yincrash2• 11 years ago

Lots of record labels (mostly independents) are definitely unhappy with this as well. The biggest one to speak out is beggars group[1].

[1] https://news.ycombinator.com/item?id=9738304

Steko3• 11 years ago

I'll suggest this is all a fairly straightforward negotiation ploy.

Apple's deal obviously makes sense for the artist otherwise the major labels would not have signed up, full stop.

What then are these independent's doing? I'd suggest since there is no money at stake in the first 3 months they are holding out to pressure for slightly better terms (and a couple headlines never hurt sales) and then will jump on in 3 months once the money is actually flowing.

You'll note that there will always be many people in the 3 month free trial, Swift isn't threatening to hold her album out forever (or her other music!) to stop the supposed bad business model, just for the 3 launch months when guaranteed revenue zero.

Kudos to these artists for knowing where their leverage is and using it though!

Apple has a couple options:

(1) just eat it, prolly what happens.

(2) they can pay up a bit but the big labels would be steamed at getting a worse deal than independents so that isn't happening.

(3) pay everyone a little bit more for the launch months. This might happen but the clock is ticking.

(4) they can make these artists sit out longer than the initial 3 months. That compromises the quality of their service though. Still they might do it, hoping it would pressure them to signing up for the release.

(5) they could weight the streaming for awhile so that holdout artists appear less than they might normally. I expect this might happen but if they do this hopefully be done openly ("we're rewarding our launch partners").

(6) go back in time and do a 3 month beta rollout so money is at stake when you do the big rollout with the new phone.

rorykoehler• 11 years ago

What makes sense for the major labels doesn't necessarily make sense for the artist. Major labels have billions in net worth and have invested heavily in the stock/equity of companies such as Apple, Spotify etc etc. They could care less about the royalty pennies that drip out the bottom to feed the artists. They're getting rich on equity.

The independents on the other hand don't have this luxury.

k-mcgrady2• 11 years ago

> Apple's deal obviously makes sense for the artist otherwise the major labels would not have signed up, full stop. What then are these independent's doing?

It's very simple. The biggest portion of a records sales are going to come int he month or two after release, after the big marketing push. If an indie releases a record during those 3 months they are going to lose a ton of potential revenue. For a small record label that can be terminal. They're running on fumes they can't take the hit like the majors.

whonut• 11 years ago

The Apple Music free trial thing is shitty but Taylor seems quite out of touch with the shape of the industry here.

Taylor Swift can withhold her music from streaming services because she's a PHENOMENON who can still shift albums via iTunes (and even physically) because people want her music. Artists starting out don't have that luxury and, increasingly, their music won't get the listens if it's not on streaming services.

It strikes me as similar to the situation with people only buying games that are on Steam. Consumers love the convenience of a platform that is in many ways quite anti-creator. Tough one.

opcvx• 11 years ago

Did you read the post where she explains what is her goal for doing this? Here is the relevant part:

This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt. This is about the producer who works tirelessly to innovate and create, just like the innovators and creators at Apple are pioneering in their field…but will not get paid for a quarter of a year’s worth of plays on his or her songs.

sbarre• 11 years ago

Do you really believe that? Or is that maybe carefully crafted language to fend off the parent's valid argument?

Plenty of creators currently put their music on Soundcloud, Bandcamp, Youtube and more, and get exposure that way without getting paid.

The choice is really up to the artist. I do agree that Apple has the ability to pay artists during the 3-month trial, but should they have to? I don't know..

btw not saying I have the answer here, but as parent said, the current landscape doesn't really line up with her argument much.

jsz02• 11 years ago

This is about the new artist or band that has just released their first single and will not be paid for its success.

That's how the music business has always worked. With a few exceptions labels take a loss on the startup costs of establishing new artists.

Zikes• 11 years ago

Taylor is pulling her music because those small artists can't. She's making a statement, and because she's such a phenomenon her statement is likely to at least be heard.

unfamiliar3• 11 years ago

I find this hopelessly naive. Yes she said that. Why is she only pulling 1989? Not her other albums? It seems the most likely true answer is "because that one is still selling strong so it is in her interests to do so."

Havoc• 11 years ago

[Steam] a platform that is in many ways quite anti-creator

Without wanting triggering an argument here...would you mind giving me a 3 sentence summary of what aspect of it is anti-creator?

TillE2• 11 years ago

A number of developers have been complaining (unreasonably, IMO) about the recent refund policy. Oh, and there's the 30% cut which can be seen as a bit too high.

Otherwise, I would also be genuinely curious to hear what problems developers have with Steam.

kweinber• 11 years ago

"Taylor seems quite out of touch with the shape of the industry here."

She is VERY in touch with its shape... And she is trying to change it. She also famously ditched Spotify and has been consistent in using her fame and leverage.

What she is doing is very important...Spotify is bankrupting artists while bleeding cash with no real business model to make the money back. She was outlasting them while the vc money ran out and it was working.... Now that Apple is in the game, the danger of them using their cash to bankrupt artists with a bad business almost indefinitely is very scary to artists. She is trying to be diplomatic while making a point.

ehosca• 11 years ago

does Taylor Swift herself have full autonomy over determining how/when her music can be played?

ricardobeat• 11 years ago

That is a great question that I'm also curious to hear the answer. She seems to be signed with Universal, how come does she have fine-grained control over her publishing rights unlike most other artists? Or are these actually moves by the labels using her to earn sympathy from the public?

w411• 11 years ago

It's pretty likely she was able to negotiate control over her rights that most artists don't have, since she's one of the few remaining artists that actually sells records: http://www.npr.org/sections/therecord/2014/11/05/361577726/t...

Tomte• 11 years ago

Ultra successful acts like Taylor Swift certainly don't just sign some standard contract the record label gives to them, but negotiate every single clause in it, using extremely competent and experienced managers and lawyers.

That's what distinguishes Taylor Swift from 95 percent of acts who maybe negotiate a little thing here and there, but are mostly happy to get signed.

dagw• 11 years ago

She seems to be signed with Universal

No, she's signed with an indie label called Big Machine Records. Big Machine Records has a distribution deal with Universal.

ixtli4• 11 years ago

I just posted about this at the top level, but thank you for being a critical thinker: Taylor Swift _may_ deal directly with a distributer but only because she's mega-ultra-super successful. 99% of musicians use third parties to get their music to distributors. You do not do deals directly with Spotify: you sign up with ASCAP and tell them the gist of where you want your music.

owly• 11 years ago

Taylor can easily get on radio playlists. Unknown artists cannot. They CAN get on Apple music, spotify, etc. There's no way to get known beyond local clubs without the free exposure.

nevi-me• 11 years ago

Yes, unknown artists can't, but the point is that they are going 3 months without income. There have been many local one-hit-wonders in my country, make a decent album with one or two 'hit' singles, and never get enough money to stay afloat. Hence the one-hit-wonder bit.

If it took me 6 months of no income to produce an album, then as I release it I go 3 months with no income (assuming that Apple is the only streaming service, and that people choose to stream instead of buy). By the time the 3 months are over, people have moved on to something else. This hurts me as I don't recover my expenses.

Taylor mentioned that she can support herself, team, etc. The unknown mostly can't, so the trial hurts them.

pearjuice2• 11 years ago

Given the volume cap of Apple and the formulas they can pop out stating "after three months of free use, x users will convert into paying users resulting in y revenu and z profit for you" to record labels, all it boils down is record labels willing to believe Apple their predictions and whether they are happy with that y in return of 3 months of upfront payment.

contentfairplay3• 11 years ago

And they say Apple cares about artists and content creators...

raverbashing• 11 years ago

Oh why are we peddling to whining by people who have too much money and airtime already?

m_fayer2• 11 years ago

Because they're powerful and can make excellent allies if they so choose.

tehwebguy• 11 years ago

If you don't need the promotion hold your music off for 3 months. If you do, go for it. Problem solved?

Maybe there was some sort exclusivity thing but it doesn't make sense that artists would have to take it or leave it now.

Also, someone with her streaming numbers is basically the only kind of artist that would even care. Streaming royalties are really low unless you have really huge numbers so while she stands to potentially lose significant revenue in 3 months tons of artists won't.

joe5150• 11 years ago

It's difficult to know for sure but reasonable to assume that at least some of the people streaming for free would have bought the album instead.

BillFranklin• 11 years ago

This isn't the first time Apple has screwed over independent/small content producers (HN 1682 days ago): https://news.ycombinator.com/item?id=1896189

jokoon• 11 years ago

It's a sales move of apple to get people to use their product, and immediately make it paying to get new subscribers.

It's crazy how the industry leaders are so prevalent compared to the people they employ.

amandahugnkiss1• 11 years ago

I think T-Swift just needs to "Shake it off, Shake it off..."

sauere3• 11 years ago

Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing.

It is safe to assume that max. 10% of the subscribers will be in this 3 month trial. You will make money from the other 90%.

Also, just a little industry insight: Taylor makes $1.5m+ at each concert, plus travel, hotel, technical rider. I have a very hard time understanding all this cry baby talk.

paukiatwee• 11 years ago

This is about the new artist or band that has just released their first single and will not be paid for its success.

Did you read the whole article?

sauere3• 11 years ago

Yes. That point simply is not valid. As i said, that new artist will be losing 10% at max.

zymhan2• 11 years ago

You have any data to support that?

And if that's true, then Apple should be taking the hit up front, not the artists.

Your last point is just irrelevant and unnecessary.

sauere3• 11 years ago

I worked in the live music industry and have a pretty good idea of these numbers. But you can just google up some leaked booking agreements (The Smoking Gun has some pdfs).

Yes, obviously a lot of people must be paid from that fee (crew, management, band...), but it is still shitload of cash.

thefreeman• 11 years ago

So you obviously didn't read TFA then. Like the second or third sentence in clearly states that she is not doing this for herself but for all of the smaller artists who don't have the power to make a stand like this.

sanswork11• 11 years ago

If you made it to that line you already read her explanation of that and her saying that she makes enough from live performances.

That money pays a lot of other peoples salaries too. It takes a large staff to put on a tour for a performer of her size.

alistairSH• 11 years ago

So, because she's successful, she should roll over and forgo one of her income steams? If she truly believes this Apple deal will hurt her bottom line, or the bottom line of other content creators, she has a legitimate complaint.

wodenokoto• 11 years ago

I believe that Netflix pays content providers for the views on their 1 free month.

kristianc3• 11 years ago

Apple Music's big problem is that the service itself offers nothing new - most of the people that are going to paid for paid music will use Spotify already, and getting them to switch will be hard.

I suspect that Apple knows that the take up for the three month free trial will be huge, but that conversion to paid will be a much harder row to hoe.

This is all about Apple not wanting to foot the bill if and when people switch back to what they were doing already (Spotify, YouTube) without paying Apple a dime.

madeofpalk• 11 years ago

Apple Music's big problem is that the service itself offers nothing new.

Eh. Apple Music is mediocre and that's ok.

It's instantly going to be the default music player on hundreds of millions of iPhones overnight. At worst, they're going to get the same usage as Spotify.

kristianc3• 11 years ago

I'd suggest that most of the people that want to pay to stream music through their iPhones already use Spotify - the rest use YouTube and pay nothing.

Apple pushing the labels to nix Spotify's freemium tier was no accident. Mediocre service + paid + Apple brand = no longer good enough.

RexRollman2• 11 years ago

None of the streaming services (including existing services Rdio and Spotify) offer anything unique. In my opinion, the only thing the truly separates them is catalogue size.

kristianc3• 11 years ago

Spotify has a freemium tier that converts extraordinarily well.

threeseed4• 11 years ago

Apple Music does offer a number of features over Spotify:

a) Siri. With the existing Music app I can tell Siri to play a particular artist or playlist. I would expect far deeper integration.

b) Watch. The Music app is native, has a glance.

c) Desktop. Spotify client on the desktop is slow and clunky. iTunes on the Mac is anything but.

mcintyre19944• 11 years ago

It's been years since I used iTunes on Windows but at the time incredibly slow and clunky to the point of incompetence would have summed up my views on it. I wonder how it compares now to Spotify there.

On another note, Apple have a pretty good story with Airplay - does Spotify on iOS support that fully? On Android they don't support Chromecast and I've always thought that was an advantage of Play Music over Spotify - maybe there's an analogous situation on iOS?

odiroot• 11 years ago

Really, these are the only reasons? Then it's even worse than I thought.

a) and c) are only relevant to Apple users. Spotify pretty much runs everywhere.

b) Watch for many is just a gimmick. This is really weak.

cozzyd• 11 years ago

You don't have to use the Spotify client; for example Clementine supports Spotify.

didymospl• 11 years ago

Apple even named a programming language after her and she still refuses to cooperate

vonklaus2• 11 years ago

Although ridiculous, this comment was a nice break from some of the other vitriolic comments ITT.

happywolf• 11 years ago

My thought is Apple can offer opt-in for artists who wish to get unpaid during the trial period. Some artists would want to get some exposures instead of cash.

For those who want to get paid from the start, their work will only be available to paying customers.

I don't see this is a major change to be made by Apple, and it is a win-win.

comboy• 11 years ago

Apple knows exactly how opt-in works (majority stick with defaults + status quo bias). The service wouldn't make very good impression when you can't find most of artists.

(Still of course I agree that they should cover the cost not artists)

japhyr• 11 years ago

I like how she states her position so concisely in the last two lines:

We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.

biturd• 11 years ago

They gove away their OS and a ton of solid near business class apps in some cases. They do this to get people to buy hardware.

She said she supports herself on tours, five more music away, you should get more people at her tours. Same for the new band, you don't get discovered on the radio, 5K and they will play your song, it's that easy. Never works.

Play shows for 5 - 10 years, you may make it, or be coached and molded like Taylor, that Canadian Kid, and the ret of them.

spinchange2• 11 years ago

Can I use their OS or apps on anything I don't buy from them first? Apple doesn't "give away" anything for free.

fauigerzigerk3• 11 years ago

It's the weakest part of her argument though as iPhones have a unit cost whereas digital copies of her music do not.

But I think she is very right to refuse to pay for a scheme that is supposed to increase Apple's market share and not hers.

WorldWideWayne3• 11 years ago

OK, give us iPhones for what it costs Apple to roll them off the factory floor please and thank you! (That's more than 50% off retail.)

coldtea• 11 years ago

It's the weakest part of her argument though as iPhones have a unit cost whereas digital copies of her music do not.

The most basic cost you have to recoup is that of making the song (studio, musicians, production, what you charge for your voice etc). This remains real money, even if you can make a digital copy of a song for free.

Besides this is based on a "physical product" model of economics and tries to apply it to digital goods. It doesn't relate that well. In an era when tons of people works in stuff that can be "copied for free", there are other models that should be applied (e.g. that you should still pay for the free-to-produce copy).

bestnameever2• 11 years ago

Does the cost matter? Both the iPhone and Music have value regardless of cost.

Does anyone know how other companies like Spotify, Rhapsody, Google play and others treat the trial period?

jsz02• 11 years ago

Carriers who choose to offer 'free' iPhones are doing it for basically the same reason as the labels accepted this deal with Apple. They're willing to take a short term loss / risk in exchange for years of revenue from subscriptions.

chjohasbrouck• 11 years ago

I found it a little off-putting, because Apple does provide free iPhones to celebrities. They're included in gift bags and freebie tents at most of the events they attend, or often just mailed to them directly free of charge, or sent with a check in exchange for a tweet, etc.

Taylor Swift has probably personally received more than a dozen free iPhones. Even lesser-known celebrities receive multiple copies of all the latest electronics, and just regift them because they have so many.

When she wanted to upgrade to the 6, she most likely did not go to the store and pay for it.

Celebrities that big just receive free stuff shipped to their front door all the time. TVs, electronics, clothes, jewelry, luxury brands.

mpg33• 11 years ago

I get the free trial.. but not paying the artists? really?

This feels very high and mighty of Apple. Hate to break it to you Apple but you are not changing the music industry like you did with iTunes. Streaming music services have been around for years. This isn't some revolutionary new product that artists just have to be on board with. There are other options.

tvvocold• 11 years ago

Here is why apple sold Taylor for free:

Taylor is Swift; Swift is free; So Taylor is free too.

outericky• 11 years ago

Out of curiosity, and on a similar note, is Spotify not paying artists during their "3 months for $0.99 promotional period"?

I guess that would explain why her 1989 album isn't there either... At least she's consistent.

I'd lean on the side of Apple eating the cost during the period, not the artists.

themartorana7• 11 years ago

With the market cap and war chest they have, it's incredibly disappointing that Apple expects artists to bear the brunt of Apple's business decision.

For every Taylor Swift there are thousands of artists just scraping by (and thousands more hoping to reach "just scraping by.")

I lose a decent amount of respect for Apple with this call. (And Taylor Swift is hardly the first artist to express disappointment and/or outrage at this "decision" by Apple.)

msh• 11 years ago

Do you think the labels don't have a war chest? Most of the big artists are not independents but part of a mega corp label.

mcintyre19944• 11 years ago

I'm not sure about your Spotify question, but I believe Taylor Swift pulled all her music from there because they wouldn't agree to making it paid only (referring to their freemium offering and not the trial there). I think that's why beyond this she has so much respect for Apple's offering - they're obviously already an important player and artists want paid - and only paid, streaming.

krisdol• 11 years ago

Honestly from the point of view it's pretty good for consumers. Making her album paid-only would have improved the conversion-to-premium rate, whereas making her album free increases active users. I guess they opted for more users, maybe to look more attractive for more funding?

bedhead• 11 years ago

What is fundamentally wrong with a model that essentially works as, "You make money when we make money"? Meanwhile, both sides are contributing resources to the trial - musicians the content, Apple the back-end and a gazillion users. Seems like a pretty fair deal with aligned interests. Apple does not have a moral obligation to use this as a loss leader just because they make a lot of money while many musicians don't...this isn't a charity.

Taylor Swift is a blowhard. I'm tired of her holier-than-thou rhetoric that she's just speaking up on half of other musicians. Yeah right...my bs detector is going bonkers. This is about Taylor Swift (and the idiots involved in the laughable TIDAL) maximizing her earnings, which is perfectly fine. But spare me the music industry's equivalent of "won't someone think of the children?!"

issa3• 11 years ago

This is very black and white. This is a great "business" move for apple, but morally reprehensible.

This is a big business asking the "little people" to work for free. Completely unfair.

achamayou• 11 years ago

It was, until one of the biggest "little people" started writing on her tumblr how she would have none of it.

nugget• 11 years ago

At the same time artists (especially indies) have a significant interest in Apple succeeding. If Spotify dominates the market to the exclusion of all others, they will have no pressure to keep artist revenue share competitive. Best case for artists is a multitude of streaming services all competing for the most appealing inventory.

rtpg• 11 years ago

There is the third option that rarely gets discussed. No subscription service succeeding in dominating the market entirely.

Alternatively, a two-track system, where subscription services are consistently behind on popular hits, and artists hit record services first.

WorldWideWayne3• 11 years ago

They planned on the backlash too because they get free advertising from some big names in music...but they'll still move forward with the 3-month royalty-free period because most artists will simply roll over.

Alphasite_• 11 years ago

There is a counterpoint to this whole thing, apple doesn't have a free tier, which is to the artists benefit.

issa3• 11 years ago

It doesn't matter. Think about this for any other profession. This is the big business version of the craigslist ad asking a graphic designer to work for free "for the exposure".

JesperRavn2• 11 years ago

Suppose Apple were to instead finance their free trial by reducing the royalties they pay artists. Would this be morally reprehensible, since it would result in the "little people" losing as much revenue as they would have under the existing scheme? I don't see how it is immoral for a company to reduce the total amount that it pays to artists. Prices are set by negotiation/the market. I think people feel undue sympathy towards musicians because they are cool and beautiful people, and so people don't want the market to apply to them.

issa3• 11 years ago

Well, in most situations, prices are set IN PART by the market. Usually common decency is involved as well (ie: the minimum wage).

I would argue that supporting the arts is important the same way that protecting minimum wage workers from abuse is (mandatory unpaid overtime, wage theft, etc).

zmk_• 11 years ago

What Apple does is simply reprehensible. They say that since they will automatically switch everyone to the new service they are not willing to pay for them. People defending them would be pissed if Google did that with All Access. All services offer free trials and they all pay for the plays the get, and Google even has an offer for 60 days. Apple is rich and it should pay for the mistake of stalling and being a late comer.

toddmorey2• 11 years ago

  Apps that are "beta", "demo", "trial", or "test" versions will
  be rejected

Interesting that free trials periods are entirely unavailable to developers in the app store but mandatory for musicians.

zacwest• 11 years ago

Apple disallows apps whose only purpose is one of beta, demo, trial or test. You are more than allowed to set up a trial period then charge an in-app purchase/subscription to continue using the service.

Fargren5• 11 years ago

I really don't like this idea that artists should be compensated for having their music listened to. I find it hurts the consumers, and it will hurt the artists in the long run. Basically, I don't think the concept of intellectual property works. What I believe is that artist should find a way to be compensated for the actual crafting of their work, and for the act of performing (Patreon is a great example of what I'd like to see more of).

Intellectual property wasn't a thing for most of human history. If you performed a song in public, anyone who heard it could write it down and perform it or do whatever they wanted to do with it. If you released something to the public, it belonged to the public, and legally that was that. And art still happened. Great art.

The idea that whoever made something owns it (and I really think it's absurd to own an idea) means that everyone else loses out. And I don't see how that can be good, even for the owner.

tehwalrus• 11 years ago

This is about free access to a set of highly engineered content, which is not just a back catalogue you are trying to milk but your current latest creation.

We do not think that software engineers should be prohibited from charging for copies of their software: neither do we think that musicians should be prohibited for getting paid for their music.

Yes, people will continue to make art for free, because they love doing it. No, that has nothing to do with whether people are (implicitly) banned from charging for their art/labour if they want to.

Fargren5• 11 years ago

Most software engineers (employees) are paid for crafting their software, not for having crafted in the past. That's exactly what I advocate for. We absolutely should pay people for working! I'm saying that those who distribute should be compensated for the distribution, and those who craft should be compensated for the crafting. And everyone should be free to do either, to the best of their abilities.

themartorana7• 11 years ago

But for most of human history, there weren't instant/digital cameras, digital recording devices, TVs, monitors, internets, instant and basically free copies, and so on. You want to see the latest Monet painting? There's only one way to do that. Want to make a very close copy of it? It's likely you're a bit of a genius yourself.

It's not that I think this model is perfect, but consuming art was difficult at best, expensive for much of history, and for large swaths of time, reserved for the rich.

If the exchange for extremely cheap and ubiquitous consumability is a model where artists get further compensated, I'm fine with that.

Fargren5• 11 years ago

I agree that the model we had is probably not a perfect fit for our era. But the one we have wasn't designed for this time either. It is a combination of historical accident and strong lobbying for private interests that got us to this point. And while we do get extremely cheap and ubiquitous consumability, which is a good thing, we also get highly restricted redistribution, derivation and consumption.

What I believe is that we should have a system where everyone is free to distribute any form of media they have access to, and of any modifications he can make of that. Obviously, this would require a different form of compensation than the one we are using; if anyone can distribute, then charging for distribution is not a great idea. We should instead pay the produces for the act of producing (and the performers for the act of performing). This is not some crazy scheme by the way: this is exactly how we pay employees for software. We agree on a price for your skill, and pay you for as long as you excersize that skill.

Patreon and Kickstarter also work with similar models, compensating for the creative act before it is done (or directly afterwards).

hetman• 11 years ago

Throughout most of human history there was also no way to listen to a specific artist unless you attended their live performance. Since technology has made the impossible possible, it shouldn't surprise anyone that new social contracts have also been created around it.

j42• 11 years ago

Can anyone explain the intent here? It seems like a ridiculous decision by Apple any way I look at it... and I'm an active opponent of the major labels & right-holder organizations.

If Apple is trying to shift to a user-subscription model and pay the labels (ultimately, artists) net-90, that's great, however it's obvious to anyone who's run a bootstrapped business that an unforeseen, 90 day break in cash flow can be an unrecoverable setback.

Not for big labels. They can weather the storm (though precedent dictates they'll pass as much of this cost on to their artists as legally possible).

The financial situation of end content creators and smaller studios is far more variable. Some will be fine. Others (especially those with content scheduled for release within this 3-month window) could be completely overwhelmed. This simply consolidates more market power into the hands of currently-large labels, and generates ill will toward Apple elsewhere.

Why would a company that seems to want to attract self-publishers into its walled garden not find a structured solution to bridge the gap?

I'm all for forcing artists to stream their music (I'm looking at you, Taylor Swift), because I see how that can ultimately make everyone more money.

Arbitrarily disrupting cash flow, though, in order to run an experiment and offload your acquisition costs is a pretty offensive, and surprising move by a company with hundreds of billions in fungible assets.

pmorici2• 11 years ago

Everyone discussing this seems to take as fact that this is going to take away revenue from some other music distribution channel. In fact it could just as easily increase music consumption on the whole. If it does increase total royalties then it makes sense for the artists share the costs of promoting it through the 3 month free trial.

It's almost certainly not in Apple's interest to cannibalize their existing iTunes sales for the streaming service.

w411• 11 years ago

For everyone suggesting that artists are simply being greedy or unreasonable in expecting Apple to pay them during the trial period, I'd encourage you to consider the hypothetical I posted in the last thread about Apple Music's 3 month trial. It might help contextualize the artists' and labels' complaints:

Tomorrow, Apple announces that it will be introducing an "App Store Subscription." For $9.99/month users will receive unlimited access to all apps on the App Store. Developers will receive a share of each user's subscription payments in proportion to app usage. Apple simultaneously announces a 3 month free trial for all App Store accounts, and states that it will be making no payments to developers during that trial since users are not paying for it.

I, personally, would ditch iOS development for Android in a heartbeat if that happened. I can't blame musicians for having a similar reaction.

pmorici2• 11 years ago

That sounds like an amazing offer. who wouldn't want to trade a one time free or 99 cent payment for recurring revenue.

microtonal• 11 years ago

Of course, music works completely differently. I have many albums that I only listened to ten times or so. In the old model, they have still received a fair share of $10, in the new model, not so much. I can easily understand why artists want to opt out.

I am also not sure about Apple's model for the distribution of subscription fees. But e.g. in Spotify's model, it is largely large acts benefitting from indies, rather than the other way around.

http://lit.vulf.de/spotify-so-little/

sanswork11• 11 years ago

Well you have to split that $10/month with all the other apps that the user accessed that month(on average). So it's quite likely that your somewhat successful app wouldn't even reach the 99 cents anymore let alone 99 cents per user.

clord• 11 years ago

It might help prevent crap-tastic apps on the store because it changes the incentive structure. If the subscription is doled out in proportion to time spent in-app, the incentive on developers would be to maximize engagement time, which might be a good thing for users. For paid apps such a scheme would be a problem since it would likely reduce income, but as a way to get money to fund free apps, not a bad idea actually.

w411• 11 years ago

You're missing the main thrust of the hypothetical (arguments about how "amazing" the offer is aside):

Apple simultaneously announces a 3 month free trial for all App Store accounts, and states that it will be making no payments to developers during that trial since users are not paying for it.

That's a terrible offer no matter how you cut it.

shimfish• 11 years ago

Except how long do you think it would take Google to move to app subscriptions if that happened?

Justsignedup• 11 years ago

There'll always be someone making an app. You can stop producing good apps, but since most apps are already free w/ ads or are a free addon to an already existing service it probably wouldn't matter for the majority of apps people use :(

w411• 11 years ago

I'm not so sure. I think it'd largely have to do with developers' and consumers' reactions. If Android was suddenly ground zero for innovative, high quality apps, due to Apple alienating developers, I don't think Google would choose the same model.

Indeed, you can see Google attempting to attract developers to its ecosystem and away from Apple's in some of their recent developer policy changes (no app review times, etc).

But now we're getting way off topic. :)

imteamcoltra• 11 years ago

It's hard because music you can actually track how many people are listening to what songs and how much of the song they listen to and compensate accordingly.

If they were able to track how often a person used an app then I don't think that would be too bad except for extremely niche apps which are usually enterprise already. I would take a smaller payment if I got paid $0.01 for three minutes my app was open on a phone, rather than charging $0.99 (or even $2.99)... It depends on the app though

lighthazard• 11 years ago

That seems wrong.. you can easily track app usage. Apple and Google have insane amounts of information about the devices and apps being used on each device.

StringyBob5• 11 years ago

I don't think current subscription systems make the best use of this data. I personally believe that royalties should be calculated per individual paying user account rather than aggregated over total playbacks in the service.

In other words, If I only listen to 'my favorite niche band' in a month, but don't use the service much, it's unlikely that they will see anything near the full possible share of royalties from that months $10. The system instead is biased to musicians whose fans use the system most heavily on loop - ironically more likely to be taylor swift type pop megastars.

[edit - explained more clearly by http://lit.vulf.de/spotify-so-little/]

Anyone know how apple will compare on royalties after the 3 month period compared to spotify? I've been a spotify premium subscriber since 2009, but would move to a system that meets my definition of equitable.

sehugg3• 11 years ago

I, personally, would ditch iOS development for Android in a heartbeat if that happened.

But what if you had just ditched Android (i.e. Spotify) last year after publicly complaining about its usurious terms?

w411• 11 years ago

Then it's back to the web (or album sales and touring in Swift's case).

mikehearn3• 11 years ago

There are a lot of economic differences between music and apps (e.g. price range, labels negotiate on behalf of artists, music has dozens of outlets versus 2-3 for apps, etc), but my hope is you would still analyze the economics before ditching. If you ultimately would stand to make more money through subscriptions in the long term, despite losing three months of revenue, then it would make sense to stay, right?

blankenship• 11 years ago

There are a lot of economic differences between music and apps

Are there? (At least for independent musicians?) From my experience, it seems like a decent comparison—you can make an app or album for $2000 or $200k.

brownbat• 11 years ago

Agree for different reasons.

I don't think they're being greedy, any more than I think users are being entitled when they wait for steep discounts on Steam games or refuse to pay .99 for an app someone worked really hard on.

Price trends towards marginal cost, and marginal cost for digital IP is zero. That's true if everyone on both sides is a group of angels, devils, spoiled brats, or automatons.

zwily• 11 years ago

Pay-per-usage of apps (similar to streaming music) might be really interesting. Of course, games already kind of do that via IAP and it absolutely sucks, so who knows.

Mahn• 11 years ago

The way things are going, with a couple mobile games doing billions, and hundreds of thousands of others doing next to nothing, non-IAP pay-per-usage in app stores may well come sooner than most people expect.

sliverstorm• 11 years ago

Pay-per-usage means that apps which are by nature both critical & valuable but also infrequently used, get no money...

makeitsuckless• 11 years ago

What makes musicians sound more greedy or unreasonable than most is the generally passive attitude towards the innovation necessary to sustain their own income.

They expect Apple, Spotify, Pandora etcetera to take all the risk (including the major risk of being unilaterally torpedoed by those same artists), do all the upfront investment and then whine about not getting a big enough piece of the cake.

Taylor Swift is being an outlier here in the respectful way in which she communicates. And she knows it, that's why she chooses her words very carefully.

Most of these artist just bitch and whine about their percentage, ignoring the fact that, with antiquated copyright laws firmly on the side of the music industry, technology firms are taking quite insane risk in their attempts to innovate the way music connects to the listeners.

If they hadn't, sales of music would have totally flatlined by now and those artist would be way worse off.

Beltiras2• 11 years ago

I suspect that this copy is something her PR agent wrote, even if she may have contributed the sentiment.

sdenton42• 11 years ago

It's disgusting really; there's so little risk in being a musician after all. Won't someone think of the poor capitalists?

biggy31002• 11 years ago

Culture has shifted and now piracy is not looked at as a real crime, but a passage of rite. These streaming services came around as an alternative to piracy and not paying anything for content anywhere.

We're witness the bankrupting of artists over time. And it amazes me that on a forum of content creators, you can see the self-interested individuals rationalizing it as fair. We can argue about the business models all day long, but it should be in tandem with the fact that life isn't fair, and what's happening to these artists isn't fair. The way people are talking about it, it doesn't really come off that way.

Sometimes I wonder if SOPA would have gone through and achieved the purposes it was set out to do - yes, let's be ideological for a moment and talk about the purpose vs the potential abuse. A lot of websites that harbor piracy are no now no longer available, and it's way more difficult to pirate your favorite music. What would that world be like, for consumers and artists?

Maybe more artists would pull their music from the streaming services, which were formed to fight piracy. Now all of a sudden that 9.95 per month you pay for music isn't so great, because not everyone is on there. The streaming services were built as an alternative to a crime - piracy.

To me the end result would be simple: The average user would have to pay more for their content, and that money would flow more into artists pockets, and those who work in artistic industries, which would reinforce more and better artistic creation.

I am probably one of the few: I pay for all of my content, and not on streaming services. I don't buy singles, I buy the whole album. When a friend opens a business, I don't immediately ask for a deal. I go in, and pay full price, and try to support that friend as best as I can. I may be old school - I pay for things, I am happy to pay for things. I want to financially support people who create things, because I want more people to have a means to be able to go out, create, and be rewarded for their work.

Beltiras2• 11 years ago

*rite of passage

striking• 11 years ago

Have you considered that most of the money goes to the label rather than to the artist? [1][2]

Unless you're paying them directly, you're still not paying the artist. Streaming and piracy don't even come close to the drain that labels put on income flow to artists. Artists made just about $23.40 for every $1000 their songs sold for in 2010, according to TechDirt [2].

I wish the world were as you described. But it's not. SOPA came close to destroying free speech online instead of guaranteeing artists their fair share.

[1] http://www.bradsucks.net/archives/2007/05/22/where-your-musi... (an indie/marketplace artist's view)

[2] https://www.techdirt.com/articles/20100712/23482610186.shtml (standard industry view)

bdcravens• 11 years ago

These streaming services came around as an alternative to piracy and not paying anything for content anywhere.

Maybe I'm an edge case, but I bought music until I got a Spotify subscription. Now the only time I buy is when it's not available (for instance, Tech N9ne latest album was on iTunes a week or two before Spotify)

Executor• 11 years ago

Here is a better model of paying artists:

- If artist sells music on a DRM-free downloading service like bandcamp.com, support them

- Otherwise let them starve

icebraining5• 11 years ago

Piracy was never look at as a real crime. The "Home Taping Is Killing Music" campaign wouldn't have been launched if piracy was generally equated with a crime in society.

To me the end result would be simple: The average user would have to pay more for their content

People aren't exactly burning the money they would have otherwise spend on such content; they aren't going to stop paying their rent because they have less free music. The discretionary income of the median person is simply not that high, and a rich person won't start buying hundreds of albums to make up for the ones the working class can't afford.

And people listening to less music instead of pirating may be more just or moral or whatever, but it doesn't pay the artists' bill anymore than piracy does.

I may be old school - I pay for things, I am happy to pay for things.

I, on the other hand, am new school, part of a generation with 25%+ unemployment and many more in precarious jobs. It's not that we don't like to pay for things - it's that's often simply not an option.

If SOPA had passed, we would've just go back to sneakernet sharing.

ForHackernews• 11 years ago

on a forum of content creators

I'm not a "content creator", I'm a developer. What I do has a lot more in common with what a plumber or an electrician does than with what Taylor Swift does. My programs are not expressions of my soul, they're well-crafted tools to solve a particular problem that I have either a) been paid to solve, or b) hope to sell to somebody else to solve their problem.

sehugg3• 11 years ago

I don't think you can pin it all on piracy; it's just the usual race-to-the-bottom. The App Store has had a constant (low) piracy rate ever since the first jailbreak, and nevertheless free-to-play revenue is 80% and increasing.

Music is always competing with its back catalog, and old music weathers the years a lot better than old video games.

byuu3• 11 years ago

I'm not making any statement on whether it's good or bad, right or wrong, but ...

Software developers aren't immune to piracy's effects, either. Whether we like it or not, we're quickly shifting into a world where art is only viable as a labor of love. Everything being digital means copying is free. Scarcity has gone out the window. Now if only our increased productivity and automations led to lesser and lesser working hours, we'd all have a lot more time for artistic endeavors on the side.

But yes, it's becoming increasingly difficult to sustain yourself solely as an artist. Life isn't fair, unfortunately.

Would the world be better if we had purely gratis art? I don't know ... the production values would certainly be a lot lower. But maybe people doing things solely because they enjoy it, rather than for the paycheck, would result in more passion and creativity; and less cash grabs. Or maybe everything would be awful.

Either way, it seems futile to rail against something none of us can possibly change, and wish for the good old days of $15 CDs with one good song on it, or $200 OS installation CDs, or $800 paint programs.

w411• 11 years ago

Software developers aren't immune to piracy's effects, either. Whether we like it or not, we're quickly shifting into a world where art is only viable as a labor of love. Everything being digital means copying is free.

Isn't this one of the big reasons for the rise of SaaS apps, though? Developers, unlike musicians, have found a way to combat piracy in a way that both consumers seem to prefer (lower upfront costs and usage based pricing) and developers benefit from (more revenue over time in exchange for delivering real value).

Besides, being forced to provide 3 months of free usage without any say in the matter is hardly defensible due to piracy. It's even less defensible when the party enforcing the free usage is the party that stands to benefit most from it.

belorn• 11 years ago

increasingly difficult to sustain yourself solely as an artist.

The number of ways to sustain yourself has significant increased in recent times, and some of those don't even use copyright as a mean for revenue. They are by nature immune to piracy.

Taken Patreon and kickstarter. You can not pirate art which has not been created. An artist can decide how much wages they demand rather than find an other job, which incidental is how the job market works. If they agree to a certain amount, they get paid and do the work agreed on. Everyone walks away happy, the artist got paid, and art is created.

What is getting harder to do is getting repeatable paid for work you done in the past. Most programmers do work for hire, and they survive quite well on not being paid for every copy of work they once made. So long there is a strong interest for new work to be created, old work will be what validate the artist current pay.

I know a web comic that update twice a month and the author current gets paid $5k a month to do so. No copyright is involved, no police and no SOPA. Just an artist and their fans, enabled to be sustained by the basic model of people wanting more art to be created and a way for that to happen. When we describe the future as "people doing things solely because they enjoy it" we limit the market available to artist to how it was done in the past, and it seems artist themselves are instead choosing to find new ways rather than to close up shops.

WalterBright3• 11 years ago

On the other hand, historically, art hasn't paid very well. I suspect the modern artists-get-rich era started with Elvis. That era may be an aberration and be drawing to a close.

In my own profession, writing compilers, you simply can't sell them anymore. That hasn't deterred me from continuing to do so, I just adapt and find other ways to make a living from the business.

busterarm9• 11 years ago

I'm 100% for this, but if Apple feels that way as well, they could do us all a favor and just come out and say it.

If any file hosting service can get shut down for piracy, Apple should be held accountable to the same laws.

Telling artists to work for free while they benefit sounds a lot like asking someone to work on spec, to which I respond: Fuck You, Pay Me (https://www.youtube.com/watch?v=jVkLVRt6c1U)

gress6• 11 years ago

Can you explain why that wouldn't be a great deal for app developers? I develop iOS apps, and I'd love it if apple moved to a pay for use model.

I care about a world where the most useful apps are rewarded.

w411• 11 years ago

Can you explain why that wouldn't be a great deal for app developers? I develop iOS apps, and I'd love it if apple moved to a pay for use model.

While it may be the case that pay-per-use would be a great model for developers (though I'm highly dubious that this is the case for anyone that isn't making a trivial $0.99 app), that isn't the main thrust of my hypothetical.

The problem with this scenario is the loss of a full quarter of revenue from every new App Store user in the interest of Apple acquiring subscribers. Do you think it would be a great deal for app developers to not be paid for three months of every single App Store user's usage?

Shivetya• 11 years ago

I am all in her camp on this one.

Most services eat the cost of trial periods in hopes of snaring subscribers and making up the loss. Apple is being dishonest by claiming free trial while passing off the costs to the artists by relying on Apple's name and status so as not to have people question it. In other words, they are spinning the story faster that old 78s

gress6• 11 years ago

By your logic, Apple should pay for the music and give it away free since they are the ones who will benefit.

But that means that if revenues rise as a result of the new service, Apple should keep all the extra profit rather than sharing it with the artists.

Is that what you really want?

xasos• 11 years ago

I agree, Apple should front the costs during that 3 month trial period. It's just not fair to not pay artists. The only benefit I see from this is that artists can get exposure they normally wouldn't get, because of the smaller library size.

ceejayoz• 11 years ago

I agree, Apple should front the costs during that 3 month trial period.

Precisely. We're talking about a company with $200 billion in cash reserves asking artists - many independent and hardly famous - to subsidize their marketing efforts.

kstrauser4• 11 years ago

Apple should front the costs during that 3 month trial period. It's just not fair to not pay artists.

Why? Apple negotiated that arrangement with those artists' labels, who agreed that this was a fair and equitable situation. You and I might like to think that we would have chosen otherwise, but the people involved in this contract were happy with the outcome.

Remember, Apple didn't unilaterally come up with this. They didn't just open a service and announce that they weren't going to pay anyone.

kstrauser4• 11 years ago

I'd encourage you to consider the hypothetical I posted in the last thread about Apple Music's 3 month trial.

To make the analogy a little more accurate:

Tomorrow, Apple announces that it will be introducing an "App Store Subscription." For $9.99/month users will be allowed to use one App Store app at a time. When an app is running, it will present a button allowing a user to purchase that app so that they may use it any time they want, whether or not their phone is connected to the Internet, and concurrently with other apps. During the 3 month free trial, Apple will not pay royalties for streaming apps but will pay normal royalties for any apps purchased.

This would suck for the Omni Groups and Mojangs, but absolutely awesome for tiny shops who currently make almost nothing and would now have much greater exposure. Likewise Taylor Swift doesn't need more exposure to sell her music, but Joe Garage might actually pick up a few listeners and fans. You see this is a money grab. I see this is as a necessary (and label approved!) bootstrapping for long term gain.

And in the mean time, even major artists will continue to get their current revenue stream from radio stations, Spotify, iTMS, etc. unless we really believe that Apple Music is going to gain a 100% market share immediately. Long term, even that would probably be a huge benefit to artists because it's almost certainly a better deal than they're getting from anyone else today.

buro9• 11 years ago

Unless you happen to be this Summer's big record... in which case your one profitable window for your track will have has just been obliterated.

busterarm9• 11 years ago

Exposure isn't necessarily good for an app.

Users frequently _cost_ money. Ask anyone who has significantly scaled freemium services.

Exposure to lots of users who might not use your service can kill your business.

If your service is really that good or serves a real need, you would recognize these potential users and market to them _aggressively_. You would even raise significant capital to do so if you did not have it. Seeing the value in your product, VCs would invest in you.

Even if your product has no inherent costs to provide as a service after it is made, you scale the money and time that invested in it based on your expected reach/profit and your profit model has just been thoroughly fked by Apple.

This definitely applies to people who produce music too because the product you're releasing has a profitable shelf-life (except for unicorns, really) and artists release on a schedule that their market (and they personally) can support.

You put a certain amount of money and time into an album based on how many people it will reach and the likelihood and timeframe before you can put out another one. Some artists release every few years, some every year and some release multiple albums per year.

If Apple is giving away your album for 3 months and you release 4 albums a year, they may be giving away 1/4 of your yearly income...(Think of it like Big O and worry about your worst-case performance.)

Using revenue streams that you don't control is hazardous. Relying on them is outright dangerous. Using revenue streams that you don't control AND marketing streams that you don't control? Suicide.

Note: this is not an argument for whether you should pay for music or not...that's a topic too hot for HN.

13throwaway• 11 years ago

App economics are much different from music economics.

From what I have observed, most people (the casual listener) will listen to the free streaming services (pandora, apple radio, etc). When people want to listen to a specific song they listen to it on youtube.

mistercow• 11 years ago

I, personally, would ditch iOS development for Android in a heartbeat if that happened.

This is kind of the problem though. You might, but most iOS developers would take the lumps and continue on as normal. iOS is too lucrative a market to ditch on philosophical grounds. After all, if Apple did adopt this policy, it's not even clear that it would be their worst offense regarding the iOS app ecosystem.

And that's the lesson Apple learned from iOS. They're just applying it now to their music store.

tolmasky• 11 years ago

But this IS kind of what happened! Ignoring temporarily the very good points below of this not being a good analogy (you'd have to take into account one app at a time, streaming, etc), this is essentially what happened "naturally" to the app market.

Go to top revenue: none of those apps are paid. They're all free (with in app purchase). The market itself "raced to the bottom" to a world where, yeah, most the apps actually succeeding due in fact operate as if they're "free" for x months, and then you make orthogonal purchases. Sure, no one is stopping you from charging 99$ for an app on the store, but most of us know that relying on that model is like hoping you're a NBA-level player (or rock star, ha!).

Developers aren't complaining, well, they are, but aren't desperate because we at least have created an alternative for ourselves. Sure, we all wish we could charge box-sale rates, but at least we;ve figured out something to do instead. Maybe this is what the music industry needs to do. Maybe I should be able to listen to anything I want but be able to in app purchase taylor swift emoji or t-shirts or what have you. Maybe that looks like an innovative industry as opposed to having come up with exactly ONE new idea of how to sell music (rhapsody style streaming) in the last 10 years. These are teens we're talking about here. Put a teen in a mall and tell me its hard to get them to buy something. Come On! If they're not buying the EXACT something you're offering, maybe its worth tweaking it just a TINY amount.

macspoofing• 11 years ago

Steam allows full refunds within 2 weeks. You're not publishing on steam anymore?

If there was a subscription program for apps, I could see apple introducing a similar trial period.

tacone• 11 years ago

Actually, it reminds a bit of Amazon, who used to promote Android apps giving them free for a day (at the expense of the opting-in developers of course):

http://readwrite.com/2011/08/02/amazons_growing_appstore_pro...

TTPrograms• 11 years ago

I don't really have an expectation of making a ton of money selling my apps anyways because I can always go around the country and fill stadiums with people who want to see me use my app on a stage.

Oh wait.

lkrubner• 11 years ago

It's worth noting that this bit:

"For $9.99/month users will receive unlimited access to all apps on the App Store. Developers will receive a share of each user's subscription payments in proportion to app usage."

is exactly what Kachingle unveiled back in 2010, and the public hated it. So, if this wasn't Apple pulling this stunt, we know how much the public would hate it.

http://kachingle.com/

interpol_p• 11 years ago

I'd be interested in getting paid by usage rather than once upfront. And if a free trial period let people get on board that would be fine with me.

I have an app that is "expensive" ($15) but I have dedicated users who paid once four years ago and continue to use the app today. All the major updates since have been free. While I don't know whether the pay-by-usage model would be financially better for me, I'd be pretty open minded about it and wouldn't mind the free trial.

wooger• 11 years ago

The Spotify / Apple streaming payment model isn't even as fair as that:

The revenue from all users is pooled, and then divided per listen rather than per user/artist etc.

So this'd be like splitting the app store sub revenue by "app launches" or some other bullshit.

Pop junk like Taylor gets a far higher fraction of revenue than they deserve, from teens listening to it non-stop.

Artists that I like get 0% of my cash, even if I listen to nothing but their music.

The system would at least be fair in scope if artists got a share of each users subscription fee, split per listen for the songs they listened to.

That the payments involved are very small and mostly go to middlemen is a separate problem, the whole system is designed to fuck niche artists.

jpgvm• 11 years ago

Though this might seem a raw deal for artists I think it should be considered that the artists (and record labels etc) are effectively business partners with Apple.

What they are really doing here is asking the other side of the partnership to participate in the loss leader effort. Apple provides the platform development + storage and delivery infrastructure, the artists provide the content.

When you consider it as a partnership it doesn't seem so reprehensible, they are both forgoing income to secure future recurring income.

I think what people are upset about is the fact Apple has a big war chest when many artists do not. Fundamentally this isn't really Apple's fault though, likely this deal was brokered by their biggest partners - huge record labels. Huge record labels also have big war chests and are probably fine with the arrangement.

It makes good business sense if you are a record label or Apple, less so if you are an independent artist but maybe not no sense at all, I don't know what exposure is worth.

Unfortunately Apple can't create a 2 tier system where they have the big record labels foot the cost of the indie artists nor can their ignore the obvious good business sense of the loss leader approach.

pinaceae• 11 years ago

overall, it is interesting to see pure market forces at play here.

revenues with computer games and movies are going up, revenue with music is going down.

the consumer does not value music that much, plus there is so much musical content which further depresses value.

the historic anomaly of high priced musical reproduction/media is over. back to normal.

malisper• 11 years ago

Why is everyone complaining about the deal? Did Apple force all of the artists into it or did the record companies? Either way, the problem doesn't come from the terms of the deal, it comes from why the deal was made.

ixtli4• 11 years ago

In 215 comments no one that I could find has mentioned that, while well-intentioned, this post comes off as somewhat disingenuous because Apple does not deal directly with the artists. The entire (pretty well-written) thing doesn't mention _at all_ that the majority of musicians do not deal directly with distributors. Think about it: how are Apple/Google/Spotify/Amazon going to deal directly with 10 million individuals? The answer is that they don't.

I think anyone can agree that Apple is being shitty by not paying for something they're making money on, the people who are directly responsible for not compensating the artists are, rather conspicuously, left out of this rant.

donarb4• 11 years ago

Exactly. And my question is forget the digital part of it. How did this work in the days of records and CDs when promotional copies were given away? Sure most went to radio stations for airplay, but others were given away. Did the artist get any money for those copies or was that part of the record companies' marketing budget?

spullara• 11 years ago

The artists paid for those copies themselves when they paid back the record companies for marketing.

michaelcampbell• 11 years ago

Apple is being shitty by not paying for something they're making money on

How are they making money on the free trial, during the trial?

aleem• 11 years ago

(1) subscriber acquisition and (2) neutralising the competition.

AOL for example printed and gave away for free, millions of CDs with free dialup access, spending as much as $35 on SAC (Subscriber Acquisition Cost) [1]:

    > How much did it cost AOL to distribute all those CDs back in the 1990s?
    >
    > Steve Case, co-founder and former chief executive officer and chairman of America Online:
    >
    > At that time I believe the average subscriber life was about 25 months and revenue was about $350 so we spent about $35 to acquire subscribers. As we were able to lower the cost of disks/trial/etc we were able to ramp up marketing. (Plus, we knew Microsoft was coming and it was never going to be easier or cheaper to get market share.) When we went public in 1992 we had less than 200,000 subscribers; a decade later the number was in the 25 million range. That helped drive our market capitalization up from $70 million at the time of the IPO to $150 billion when we decided to combine with Time Warner to accelerate our transition to broadband and diversify our revenue mix.

    [1]: http://www.quora.com/How-much-did-it-cost-AOL-to-distribute-all-those-CDs-back-in-the-1990s

bluthru• 11 years ago

I think anyone can agree that Apple is being shitty by not paying for something they're making money on

Apple AND the music industry are losing money during the 3 months, but they both stand to gain money after that. Apple has invested a lot of money in creating the service and running it for free for the trial period.

ixtli4• 11 years ago

They are making artists pay for their user acquisition. I still call that profiting off of someone else's work without compensating them.

robspychala• 11 years ago

this sucks but it's not a new technique

music clubs of 15 years ago didn't pay artists for your "12 free CDs" either

TIM20142• 11 years ago

made me think about those old BMG (i think it was) music clubs were you could purchase 12 CDs for 3 cents, and all you had to do is buy x amount of CDs per year. Wonder if the artist got paid for those.

IBM6• 11 years ago

Apple made their response to this a few days ago in this Recode article. 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.

I wonder if all of these complaints would go away if Apple said they weren't going to offer higher payouts overall but would pay during the free-trial?

cwyers3• 11 years ago

That's disingenuous; other streaming services pay for streams by free users.

IBM6• 11 years ago

What's disingenuous about it? If Apple said that they'd pay during the free-trial but went back to the same industry standard rates would any of these artists still be complaining? I don't think so, they stand to benefit more overall from a service that will offer them higher payouts than the payment they get during the free-trial. The artists/labels complaining would obviously prefer that Apple offer the higher payout AND pay them during the trial, but that's why this is nothing more than a business negotiation being played out in public.

The fact is that Apple is paying for music during the free-trial, in higher and on-going payments.

themartorana7• 11 years ago

"Higher payouts" appear to be 71 (US) and 73% (rest of the world) vs. 70% from Spotify [0] (and likely very similar from other streaming services).

1% is a hilariously small amount to push expectations on artists without even asking.

[0] http://www.theguardian.com/music/2015/jun/18/beggars-group-s...

IBM6• 11 years ago

And a 3 month free trial is a hilariously short period of time they won't be getting paid in the grand scheme of things. Aside from our characterizations of what is "hilariously small", the fact is that the major labels saw that the deal was worth it to them. And if any of these complaining labels were put to the test as to which deal they would prefer, (paid during free trial and industry standard rates or no payment during free trial and higher than industry rates) I'm pretty sure they're going to pick the latter.

billdhn• 11 years ago

FU Pay Me!

gdubs2• 11 years ago

Couple of thoughts here:

1) If you're an indie artist and you can afford to opt-out of Apple Music on principle, then clearly you can afford to opt-in for the three free months. Either way you're not making money from Apple Music. If you opt-in, you make more money in the long-term. If you opt-out, you continue to earn from your current streaming and downloads.

2) If you think that Apple Music will be so earth-shatteringly successful from day one that it will destroy your business -- then your business model is razor thin and completely unsustainable.

jacalata• 11 years ago

How does (1) apply? Are there indie artists who are opting out?

gdubs2• 11 years ago

A lot of it is all posturing right now, but there has been news of indie labels considering boycotting Apple Music, for instance:

http://www.theregister.co.uk/2015/06/16/apple_nopayforplays_...

adam12• 11 years ago

Apple needs to loosen their purse strings and give back a little. I can't believe I'm standing up for the music industry, but Apple wouldn't be half the company they are today without music.

dperfect2• 11 years ago

As others point out, it doesn't make much sense for Apple to attempt this (not paying content producers during a 3-month trial) for the sake of money alone - they have the cash (even if subject to high taxes) to pay for a loss leader like this.

If that's not the primary motivation, I can think of two alternatives:

1. Apple lacks confidence in rolling this out - they don't even know if they'd make back their money using a loss leader of this magnitude. They don't feel that the service alone has any meaningful advantage over the competition, so they feel a need to compensate with an extraordinarily long trial period, and they're willing to abuse some of their market power to strong-arm content producers into (hopefully) covering the bill. As a tiny part of their overall business strategy, they are unwilling to make any large bets on it, regardless of their ability to cover a loss.

- or -

2. (probably more likely) Apple is so myopically over-confident that they believe this service will disrupt the music industry in the same way the App Store changed software distribution. They honestly feel that they are creating a new market here, not trying to steal market share from other streaming services. Consequently, they don't feel a need to justify covering any expense to content producers because in Apple's mind, content producers will give anything for the privilege of existing on Apple's revolutionary new service. This would represent a new opportunity for revenue above and beyond what the music industry has already come to expect.

IBM6• 11 years ago

The case for the latter is extremely strong despite how you've framed it. Apple Music will overnight be on an install base of 700-800 million iOS devices plus Macs (and available on Android and on iTunes on Windows). That combined with the fact that Apple's customers have regularly shown they are willing to pay for apps/services/media makes it extremely likely that this service is going to rapidly expand the market for streaming customers in a short period of time. It's been reported that Apple's goal is a 100 million customers for Apple Music, that's 5 times the number of paid customers Spotify has.

dperfect2• 11 years ago

Good points. Still though, I'm not sure install base alone will expand the overall market significantly, at least not quickly. Everyone I know with those devices already spends money on music in some form (subscription-based or digital downloads), or simply wouldn't pay for music at any price (they will milk the trial periods though). I anticipate many will switch to Apple Music, but that will be a switch, not a new form of spending.

Also keep in mind that parents may be willing to spend $.99 here and there for their kids' apps (which adds up fast, but not in a way that feels obvious), whereas few will be happy to sign up for a recurring subscription without at least weighing it against the well-known competition.

ccvannorman• 11 years ago

Taylor et. al. don't seem to understand. Apple controls the marketplace and is a legal monopoly, owning the software AND hardware. If you don't like what Apple does, tough luck. Whining about it has never amounted to anything and nobody is going to replace them. Long live the King.

[ now picture me killing myself by slitting my throat with an Air ]

hagbarth• 11 years ago

Taylor doesn't seem to care at all - "[...] can support myself, my band, crew, and entire management team by playing live shows."

JesperRavn2• 11 years ago

In theory, negotiations over royalties would be simply bargaining over some number, like a percentage of revenue or dollar value per song played. In practice, it involves all sorts of weird deals like this free trial. But ultimately, this is just about how much money musicians get for their music. It is no different to negotiations that determine the price of steel or wool. The only reason that these deals attract so much publicity is that people like musicians because they are so cool and beautiful. When people have a cool head, most can see that this is a matter between the musicians and the company, and no one else has a practical or ethical reason to be involved.

petrbela3• 11 years ago

The "deal" is first of all unfair to Spotify, Rdio and other competitors who still have to pay royalties during their free trial.

On one hand, the music industry tries to get higher revenue on every front but then agrees to something that has essentially one goal in mind, to kill off any competitive streaming market, which will eventually lead to them being solely dependent on Apple. Interestingly enough, all major labels have stake in Spotify (not sure about the exact number but around 20-30% in total). Why do they now apply different rules, I don't know.

Unless of course Apple demanded not to pay any royalties, in which case the music industry is really hopeless (again). The cry for "we love you Apple but pretty please, we gave you all our music, would you mind paying us" just confirms that. They feel being robbed in an era for which they've been long overdue with a business model, don't know what to do, and look up to big brother to save them.

I love Apple's products, their marketing is brilliant, and they cleverly use all their power to make the most money out of anything. But they're getting more and more hungry and arrogant every year. Microsoft, anyone?

tdeang• 11 years ago

"we don't ask you for free iphones" it's something

jmilloy• 11 years ago

Presumably, the labels are responsible, not Apple. Apple represents Apple's interests, while the labels are supposed to represent the artists'. Though in practice, the labels probably represent their own.

So, presumably, the labels have decided that offering their content for free to Apple for 3 months will result in more revenue in the future, just as Apple has. Surely any artist understands the idea of giving away their music in order to build a paying fan base in the future.

Ultimately, any artists who lose a significant chunk of income due to these 3-month trials and never see increased income after the trials should be upset with their label's failure to represent them well.

Then again, isn't that to be expected as an artist? Your label encourages you to give CDs away, or tour at a loss, and sometimes it pays off and sometimes it doesn't? Isn't this the same idea? It sounds to me like a worthwhile risk. How many people were going to buy your debut album or come see a show and choose not to because they used their iTunes streaming account? Versus how many people easily stream (and pay for) you music 3 months later because they got hooked on iTunes streaming?

cwyers3• 11 years ago

The problem here is that there's more than one label. Well, that's one problem. But the larger labels are more readily able to absorb this kind of hit than the smaller ones.

Another problem is Apple is threatening removal from the iTunes music store for nonparticipants. So it's not just that labels think they can make more money in the future if they agree, Apple is threatening to cut off their sales right now if they don't agree.

Another problem is that this is the same Apple that is pressuring record labels to cut off the free tier on Spotify, which labels get compensated for at the same rate as paid streams, because it "devalues the music." As if this doesn't.

Apple has a dominant market position in high-end smartphones (they make 90% of all smartphone profits) and they are using this to leverage other markets in ways that make Steve Ballmer look like Winnie the Pooh. They already tried to engage in ebook price fixing, now they are trying to bully Spotify out of existence.

glhaynes• 11 years ago

To my knowledge, the only claim that Apple is threatening to remove music from purchase comes from this one guy ranting on Twitter and it was specifically denied by Apple. Doesn't mean Apple's telling the truth, of course, but it seems likely that Newcombe didn't have a full grasp of the situation. http://consequenceofsound.net/2015/06/report-apple-threatens...

ojosilva• 11 years ago

My wife is a musician and we have this argument all the time. She's not a recording artist or anything, but she does complain of abuse in the deals her different bands and groups get at venues. And I say, that's supply-demand, that's the way business is done, how much is the venue getting out of the concert? How can you compete when there's so much people playing for free or on much lower cuts? What can you do if the end-customer prefer not to pay cover charges or see the value in live music? etc. etc. It's a music business after all.

So Taylor Swift's plead is pathetic, "Thankfully... I can support myself," deceiving "by playing shows" [1] and even condescending, "This is about the young songwriter who just got his or her first cut... who works tirelessly." Oh, come on!

You don't agree with the terms of the deal, so you pulled out. Fine. Now your fans who are going to try this new service won't have access to your latest album. That's the price of your decision. To me that's fair game, show a little muscle to your distributors, maybe get a better deal. Now, please don't try to spin this as some social injustice towards creative people. Just because you're an artist it doesn't mean you're immune to market laws. Taylor Swift is a billion-dollar business. Stop treating music fans like we're stupid.

[1] "Swift had sold over 40 million albums, 130 million single downloads and was one of the top five music artists with the highest worldwide digital sales" -- http://www.ifpi.org/news/Taylor-Swift-named-IFPI-global-reco...

nether• 11 years ago

taytay

intrasight2• 11 years ago

Make great music. Give it away for free (or streaming, which is near the same). Charge a lot for live concerts. I'd just assumed that musicians would have figured that out by now.

StringyBob5• 11 years ago

The 'free' bit has already happened for a lot of artists (income is gone). The second part 'charge a lot for live music' is happening - those who can are try to compensate (i.e. make a living). Having just paid over $100 for a concert ticket, I don't think live music becoming only the preserve of the rich helps.

intrasight2• 11 years ago

I expect that we will soon see some "hybrid" approaches. VR/AR tech comes to mind. I would have liked to have seen the Stones last night, but $200-400 for a ticket was more than I could justify. But if I could watch in comfort from my home holodeck, then I'd certainly have been willing to pay $50.

Keyframe• 11 years ago

It makes sense. Apple is launching a service for their own profit motives. Service is new and has no traction, they need a marketing move to build traction. One of those moves is a free trial with other people's IP. Those people will, presumably, profit as well from the service once it gains traction. In the meantime, Apple - the initiator and owner of said service, asks other people to foot the marketing bill for their own business. Which wouldn't be an odd proposition if

a) it was a service first of its kind in a non-crowded space

and

b) some types of IP in this sector is time sensitive (airplay on pop hits is measured in months after launch and drops off, like games)

c) apple is loaded with cash

dizzyviolet• 11 years ago

I respect this woman more every time I hear about her in the news. I'm glad to see a huge player try to stand up for others like that. It's remarkable considering she clearly understands she could end up helping someone that takes a sale from her.

macarthy12• 11 years ago

How much you paying to publish on tumblr Taylor?

naveenspark• 11 years ago

Taylor Swift is signed to Big Machine Records (BMLG). Big Machine Records is distributed by Universal Music Group (UMG). I am sure BMLG/UMG received a sizable advance from Apple in exchange for streaming rights for their master recordings. UMG probably negotiated an even higher advance in exchange for permission to launch the 3 month free campaign. UMG / BMLG should be sharing this advance payment with their artists. Taylor knows this so a good question to ask is: What % of the advance is Taylor receiving? The answer is probably none because most artists receive nothing from these advance payments. Even the hugely successful ones. So why is Taylor writing this letter? She is extremely smart and has a brilliant team of advisors around her so she knows about the advance that Apple already paid UMG. While posting this letter fits into the general discourse regarding underpayments to artists from streaming services, behind the scenes she is likely negotiating her own, separate, significant advance from Apple. I would do the same if I were her.

paulkon• 11 years ago

Yep, that's what it looks like.

tajen2• 11 years ago

And why do we not hear about the other huge artists? (rhetorical question)

ChiperSoft• 11 years ago

I suspect her ability to refuse apple the right to stream her album is also a product of her success. I doubt smaller artists have that right in their agreements.

tommoor• 11 years ago

If only the labels had 5 years ago put a reasonable music licensing system in place for the digital world... we might now have a burgeoning ecosystem of startups and niche music services competing to provide a great customer experience instead of a couple of giants.

giancarlostoro• 11 years ago

I guess I was the only one who thought this was going to be Taylor Swift complaining that they named a programming language after her (before reading this) and putting a trademark on her last name (or something similarly silly).

headShrinker2• 11 years ago

For anyone suggesting that Taylor is not greedy, most artists don't get the majority of the money from airplay, the record labels do. Apple's move is to cut record labels massive control grip on the market, not to rip off the artist. Taylor Swift is in a very unique positions to have a very lucrative record deal with her label. Most artists don't, that's why you are hearing from her and not others.

It was the same situation with Metallica and Napster. They got the majority of the money from their record sales. Most artists are just interested in the massive distribution these platforms offer, so when a relatively small act shows up in your town you might have heard of them. The live show is were most acts make any money anyway.

Many years ago, I recorded a number of albums with different bands. On average, for every $10 album sold, I would get 10 cents, paid to me after the label recoups costs. When you aren't Taylor Swift, that is the deal most artist are offered through a record label.

ddebernardy• 11 years ago

Curious to understand... what's the point of getting 1% of any sale of something that wouldn't be there to sell in the first place had you not created it? I find it really hard to believe that labels guarantee you'll get over 100 times the amount of sales that you'd get without them. Do they?

headShrinker2• 11 years ago

I don't know that I completely understand your question... The point is to create something. Your other question, the label guarantees nothing... Often after recording and publishing the artist is left in debt to the label for all expenses, the label then charges exorbitant rates for studio, legal, duplication, and doesn't pay a dime to the artist till the money is recouped. Often artist who don't sell enough albums are left in debt to the label and then summarily dropped. Most of the time after only one album. Swift is abviously far beyond this status and can command a massive sway when it comes to crafting her new contracts.

merb• 11 years ago

Why so many people blame apple? For the beloved Tayloer? Or for the beloved Music industry?

I still don't get it. Today's music pretty much sucks, I mean the artists mostly didn't even make their own music, they just buy the text and everything. Most music of today costs way less than it costed years before and still isn't that great, it's just for the masses and yet artists are crying cause they get not enough? Huh 10 $ per month is a lot especially when you think about it, a normal person won't buy an album every month which costs nearly 10 $ per month.. Also why should an artist live with a single hit for his whole life? That makes no sense.

People in this business don't live in the reality, I mean more and more films happen to be on streaming platforms, yet a film costs way more to produce than music and still you pay the same price for netflix / amazon instant video / etc than for a music streaming service.

Also why does an album online costs as much as an album inside the store?? Thats way out of reality.

People should stop buying everything from labels, artists, just to show them what they do today is not funny anymore.

P.S.: And i don't get it why she has so many fans. Hell her music is way worse than a lot of pop music I listened so far. Why can't we have great artists today? Nobody remembers the good old days of The Who, Queen, Redbone, Blue Swede, etc.. Too bad what happens to music these days..

vonklaus2• 11 years ago

No one seems to have said this yet, but I wonder if Apple has done the following math:

expected negative value of bad pr = NPR

loss of customers from artists pulling songs = CUS

Cost of running PR Campaigns combating these stories = PR

Cost of paying artists for 3 month trial = TRIAL

Other forgotten costs = COSTS

If(NPR + CUS + PR) is greater than (TRIAL + COSTS) they should just pay the artists and make this go away. Obviously this is a very simplified example, but I wonder if Apple has done this sort of appraisal. I suspect they have.

PaulHuber• 11 years ago

Damn, I hate Apple. And Google, Facebook, Microsoft, Amazon. Oh yeah, they want to make the world a better place, those sneaky bastards.

conradev• 11 years ago

I respect the company and the truly ingenious minds that have created a legacy based on innovation and pushing the right boundaries.
... just like the innovators and creators at Apple are pioneering in their field
... we admire and respect Apple so much.
I think that is beautiful progress. We know how astronomically successful Apple has been...
I say this with love, reverence, and admiration for everything else Apple has done.

Taylor's post reminds me strongly of this article by Eli Schiff:

"Wilcox's flattery is not accidental. It was essential that Wilcox mentioned his qualification as an Apple fanatic, because that is, of course, the pre-requisite for saying anything remotely unfavorable about Apple."

– https://news.ycombinator.com/item?id=9256014

prawn• 11 years ago

Was going to post the same. Her points obviously stand regardless, but this is an epic example of "I love Apple, but..." There's almost more gushing than criticism.

Tycho• 11 years ago

Obviously Apple can afford to pay money out to the recording artists and labels for the free trial if they wanted to, but I wonder if the decision not to is related to setting a precedent. Like if they were to compensate all the artists $X per day of availability then that would be a sort of legal benchmark that could come back to haunt them.

anigbrowl3• 11 years ago

Of course. They['re trying to shift risk onto the creator. Now in fairness, Apple has put a lot of capital at risk by building the streaming infrastructure and so on for the service to work reliably and be considered a 'world class' product like their other offerings. On the other hand. Apple is arguably sitting on top of the world's largest cash pile so the ratio of capital-at-risk relative to their capital cushion is a lot different from that of 99% of musicians.

stefantalpalaru• 11 years ago

it is unfair to ask anyone to work for nothing

Does she really think that she works for every digital copy of a recording? Or that there is a relation between the work needed to produce a recording and the number of copies she sells?

TIM20142• 11 years ago

Lets pretend for a second that it's not that the artist is NOT getting paid for 3 months, but they (Apple) are delaying their payment for 3 months. The 3 months Free is to entice people into subscribing to Apple Music, and the more people that end up scribing the better.

I think at the end of the day (or end of 3 months) more people will have subscribed to Apple Music then before and the artist will be making more money.

Personally i think the real winners are the record labels who seem to get the lions share of the money.

Also when Goole Music was released it was free for a limited time... did they pay artist/record labels?

curyous• 11 years ago

I'm still kinda surprised that artists expect to get paid when they're not performing. Anything they get from Apple Music's sort of service is a bonus.

wooyi• 11 years ago

Is software free trial similar to this? Don't we, as developers, give our software for free in either a freemium or free trial business models? One freemium tool I'm involved in only monetizes 2-3% of our users... But it's a model that works as far as marketing goes.. Not saying you shouldn't pay artists but isn't this another form of marketing to users? In the end, it's win-win. Apple gets more users, artists gets more listens...

halo• 11 years ago

I'm honestly surprised there hasn't been antitrust action over this. Apple are trying to leverage one monopoly (iTunes Music Store for digital music sales) to gain a monopoly in another market (music streaming) by forcing unreasonable terms.

I guess this is also a reflection of the lack of political will for antitrust action. In my view, Apple has long been on thin ground with regards tying but there seems to be a lack of political will to use competition law.

wting• 11 years ago

Unfortunately Taylor does something similar with concert photographers (grants Taylor unlimited usage with a large scope, severely restricts photographers' usage):

https://junction10.wordpress.com/2015/06/21/those-in-glass-h...

danmaz74• 11 years ago

3 months free is a way for Apple to promote its service against its competitors, and they need to do this promotion because they're late-comers. There is nothing to gain for the creators of music in getting more people to use Apple streaming service instead of Spotify or Google, so, why should they finance Apple's promotion?

girvo3• 11 years ago

There is nothing to gain for the creators of music in getting more people to use Apple streaming service instead of Spotify or Google

Are you sure? Because Apple are promising to pay higher royalties. That sure seems like not nothing to me. Now, I pass no judgement on whether the financial calculus works out for 3 months of free usage, but to be honest saying there's "nothing to gain" is being dishonest.

aercolino• 11 years ago

I find it difficult no to love this young girl.

shawn-butler• 11 years ago

“We don’t ask you for free iPhones,” she added. “Please don’t ask us to provide you with our music for no compensation.”

Funny, her best line and I would wager she hasn't paid for an iPhone or any consumer electronics (or any branded good for that matter) in years if ever given her family history. I find her use of the royal "we" arrogant.

I really do not understand the issue. What Apple is creating is a unified platform for exposure to music and musicians not just a streaming music service. With Connect artists take their fans into their lifestyle and the creative process to gain traction / engagement.

A "free trial" is exactly the kind of thing that would induce consumers to use it away from the hodgepodge networks out there now, all of which Swift, Inc seems to use exorbitantly to prop up her brand (web, mobile app, fb, twitter, instagram, tumblr, vine, ....) but which is next to impossible for an indie artist to maintain on his/her own.

I can understand why the economic return on her investment in Apple Music may not be in Swift Inc's best interest but not the community she is appointing herself to represent.

Seems like a no-brainer to me and also an opportunity for someone here to create some tools to create and maintain a presence on Connect for artists ready to go with content when it launches.

brisance• 11 years ago

Before everyone brings out the pitchforks, I feel we may not have the full picture. According to her tumblr post, it's unclear if it's non-payment or deferred payment for streaming her songs during the three month trial period.

zxcvcxz2• 11 years ago

Apple should keep the free trial, but pay revenue only to artists who aren't multi-millionaires or extremely popular.

Then when Taylor still refuses to let iTunes sell her music she'll be seen for what she really is.

simplexion• 11 years ago

It seems people dislike the truth of your comment.

smil• 11 years ago

Apple should just pay royalties out of their own, enormous pockets of $172B (our whatever it was) for the first three months, just not charge users. Then there wouldn't be a problem. What they're doing now is just strong-arming weaker parties to create a platform that will increase their own power even more.

vijayr• 11 years ago

Are there any SaaS services that take care of hosting, selling, billing etc that small bands can use? May be the SaaS app can take 10% of the sales or something like that (like udemy, but for music)? If there are, what are the reasons the smaller bands aren't using them?

If at the end, Apple/Google/Amazon/Microsoft replace the record labels and become the new overlords of music, then nothing much has changed, right?

kgarten• 11 years ago

hmm ... seems Taylor Swift is not much better:

https://junction10.wordpress.com/2015/06/21/those-in-glass-h...

tempodox• 11 years ago

Apple put themselves in a comfortable spot here. They generously offer a trial period, but then they make sure someone else pays for it (the artists). And the people paying the costs don't even have a say in it, except the obvious “my way or the highway” choice of using Apple at all.

Fascinating how Apple can make every cent of cash end up in their own register, but the people paying for this optimisation are the “partners” in the middle between Apple & the consumer.

To Apple, Love Taylor

Related Stories