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

https://twitter.com/cue/status/612824775220555776

by jflowers45 • 11 years ago

251 130 11 years ago

w4• 11 years ago

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

bobbles• 11 years ago

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

c-slice• 11 years ago

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

doctoboggan• 11 years ago

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

cooper12• 11 years ago

I am also a little surprised that twitter was the medium they choose to announce it.

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

ghshephard4• 11 years ago

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

This has been far, far better marketing exercise than their WWDC keynote.

socrates1998• 11 years ago

Wow, this analysis just seems right. They sign a deal with TS, get her to be "outraged" then Apple does a 180 and then says it will pay the artists.

TS looks good and Apple gets a shitload of free press for their new music service.

I feel dumber everyday I don't see this stuff happening.

001sky• 11 years ago

Record labels attack Apple deals that would leave them 'completely screwed'

Independents claim they could be forced out of business by free trial of new streaming service and withold popular artists such as Adele

http://www.telegraph.co.uk/finance/newsbysector/mediatechnol...

This was the british press about 5 days ago, so I don't think it was that cynical. TS seems to have been the straw tha nudged the issue over the top.

Losing adele and taylor swift starts to give the product a black eye at some stage.

Apple has $$$$ plenty in the bank to subsidze a 3 month operating loss (or whatever).

jen729w2• 11 years ago

You don't really think this is the case, do you?

It's like any conspiracy theory: think about how many people would have to be "in it" to make it work. Then think, what are the chances of none of them, ever letting anything slip. To anyone. Ever.

The chances are almost zero. People talk. The damage - to Swift, to Apple - it's just too large.

Therefore, this is not what you think it is. There is no deeper story here. Apple screwed up, Swift is influential, they probably thought they could get a bit of good PR from changing their minds, and they did. End of story.

mattmc• 11 years ago

I mean, that sounds feasible, but I seriously doubt that is what actually occurred. I would give Apple the benefit of the doubt here, until WikiLeaks turns up some incriminating emails or something.

paulkon• 11 years ago

I wouldn't be surprised if this was a coordinated PR exercise with top artists and Apple.

themgt• 11 years ago

They even named their new programming language after Taylor as a co-promotional ruse. Wake up sheeple!!1

synaesthesisx• 11 years ago

It's not like Apple is affiliated with Swift or anything....wait...

mamp• 11 years ago

My first thought was they did it because they didn't want to rename 'Swift' to 'Drake'.

iiiggglll• 11 years ago

That's just silly. Apple doesn't need to do anything like that as they already have millions of captive eyeballs on their iOS devices. As soon as they put a nice big icon on the home screen, they'll have an audience.

Case in point: a mere six months after it launched, iTunes Radio had more listeners than Spotify:

http://www.cnet.com/news/itunes-radio-now-third-most-popular...

Once they unify everything under Beats & iTunes Radio and make it an in-your-face feature of iOS, they'll have all the visibility they need. No reason to engage in some weird false-flag PR campaign like you describe.

jfb• 11 years ago

You're overthinking this. They're simply not that Machivellian.

smackfu3• 11 years ago

I don't think Apple came out of this looking very good, even after they capitulated.

ekianjo2• 11 years ago

Apple will always make sure Artists are Paid

You mean, except until yesterday where your plans said otherwise ? :)

SG-2• 11 years ago

Unless they always intended to pay them from the beginning and Taylor Swift (or her managers) jumped to conclusions.

ekianjo2• 11 years ago

Actually they did not jump to conclusions, the trial wording about not paying artists was VERY clear when Apple wrote it the first time around.

kdamken• 11 years ago

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

smegel• 11 years ago

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

SG-2• 11 years ago

I think it could have used an exclamation point myself!

pasta_2• 11 years ago

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

balls187• 11 years ago

I've been a spotify premium subscriber for a number of years now, and been happy with it. Apple music seems interesting, and more competition is good, however there isn't much that makes me want to switch just yet.

While Apple has a lot of things going for it, SaaS hasn't ever been their strong suit. Spotify's entire business is streaming music. Apple's streaming music service is a small fraction.

ghshephard4• 11 years ago

I was a Spotify Premium Subscriber, but then canceled when they didn't have Mylo Xyloto. I'm wondering how many top albums missing it will take before Spotify will restrict certain albums to their Paid Tier only.

Regardless, now Spotify is in the crappy situation of Apple having some top albums they don't have, and Apple offering it for free (to subscribers).

You really don't want to get into a $$$ fight with Apple.

partiallypro• 11 years ago

Someone, Google or Microsoft will buy them out. Use their brand name instead of their own and put their cash behind it. Letting Apple dominate the music space is something I think anyone (other than Apple itself) desires...not even the music labels/musicians.

odiroot• 11 years ago

No, they are not. Not everyone lives in Apple bubble. Especially outside of North America.

timothya• 11 years ago

Good for Apple. It's too bad it needed a really high profile artist to come out against it, but I'm glad they could listen and make the right choice.

Taylor Swift has previously not put her music on other streaming services (despite them paying artists during the trial period); I wonder if she'll consider Apple Music for streaming now that they've changed their terms on this point (and if she does, will she also put her music on other streaming services?).

IBM7• 11 years ago

I hope everyone realizes that withholding 1989 was about a windowing strategy to maximize overall revenue from iTunes downloads/CD sales. Now they've essentially called her bluff and she'll have to cut that short when her music is still selling like crazy 8 months later.

protomyth5• 11 years ago

I don't think she was bluffing as she has already withheld her album from Spotify. If the follow up is correct, she can still withhold it as they are not going to pay full royalties. This is attempted damage control for Apple on a Sunday night and it looks ill handled.

smackfu3• 11 years ago

Taylor Swift can shame Apple, but who exactly is in a position to shame Taylor Swift?

pablasso• 11 years ago

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

IBM7• 11 years ago

They're higher at 71.5% in the US and 73% in the rest of the world.

http://recode.net/2015/06/15/heres-what-happens-to-your-10-a...

JohnTHaller8• 11 years ago

71.5% of the monthly premium, which would work out to a difference of about a hundredth of a cent per stream. So, instead of an average $0.005 per stream, it'll be $0.0051 per stream. (I think that's what spofity averaged the last few years)

plorg2• 11 years ago

I'm honestly surprised it's that low. I know the difference is supposed to be that Apple Music accounts will all be 'paying'. But if they're only paying out low-single-digit higher rates than Spotify, I don't see how it's supposed to be meaningfully different than Spotify Premium or Tidal, except that people paying for Spotify/Tidal through iDevices are paying $13/month instead of $10, and $3 is still going to Apple.

And that actually makes the previous stiffing of artists an even more raw deal. I had read elsewhere that the rate was rumored to be closer to 90%, and at that rate it would take about a 10 months of someone subscribing to Apple Music to pay out higher than Spotify Premium, which pays out at roughly 70% (considering 3 unpaid months).

If you make the same comparison with Apple Music at 73% and 3 months free/unpaid trial, Spotify at 70% and 1 month, it would take more than 4 years before Apple paid out more. If you think you'll subscribe to either for more than 4 years and you care about the artists, it might be worth it. But it's going to take a long time.

If that payout number is correct, a conscientious consumer might as well subscribe to Tidal (who pays out at a similar 70% rate), because they'd at least get access to higher-quality tracks and the artists aren't getting payed significantly more or less.

batmanthehorse• 11 years ago

First sentence of her letter was "I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple Music."

So now, she needs to allow it on Apple Music or she'll look like a jerk. Apple will have this album that no other streaming service has, and they got a ton of press for it.

Probably worked out pretty well for them.

capkutay• 11 years ago

even that first sentence executes perfect product placement. 'blah blah my album, 1989, blah blah new streaming service, Apple Music'

sarreph• 11 years ago

Reminded me of this cartoon: http://mngboxers.com/wp-content/uploads/2013/12/gary-larson-...

JohnTHaller8• 11 years ago

If she's smart, she'll still hold out. 1/2 a cent per play won't add up to anywhere near as much as her sales are.

Correction: That estimate was based on the average Spotify rate over the last few years. Apple has now said that the rate will be different during the trial and isn't being made public.

M4v3R• 11 years ago

It might add to an even bigger number, now, that she had so much publicity from her open letter and tweets. People will listen to her album just out of curiosity now.

bedhead10• 11 years ago

Except in her own words: "This is not about me." She is of course, lying. So if she plays hardball with her own album's access, she will be exposed as the liar she is. Streaming revenues matter to only but the top .1% of musicians, so Taylor Swift leading the charge on this was a joke to begin with. It was always about her, and Kanye West, and Drake, and the rest of music's elite. It's like Bill Gates being the public face of abolishing the estate tax. Do you think it's a coincidence that TIDAL, the streaming service that was supposed to revolutionize the business, only had the world's wealthiest artists on stage during its unveiling?

This is about a handful of artists grabbing a little more money, period.

ruipgil2• 11 years ago

Pretty much every other streaming service, except spotify, has the album available. No exclusive here.

smackfu3• 11 years ago

Like which? Rdio doesn't have 1989, for instance.

http://www.rdio.com/artist/Taylor_Swift/albums/

jrlocke• 11 years ago

One might say that their previous position was tone deaf

aamikalyan• 11 years ago

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

beaner• 11 years ago

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

JohnTHaller8• 11 years ago

Eddy Cue clarified that artists will not be paid at the streaming rate they are paid during users paid memberships. They will be paid at a different rate that isn't being disclosed: http://recode.net/2015/06/21/apple-says-it-will-pay-taylor-s...

Also: "Cue says Apple will keep the existing royalty rates it has already hammered out with the three major music labels for subscribers."

IBM7• 11 years ago

That's during the free trial period. The higher rates remain once people are paid subscribers.

JohnTHaller8• 11 years ago

Right. But the trial could be significantly lower. They're not saying.

It's worth nothing that by "higher rates" we are talking about a hundredth of a cent per stream.

tfigueroa• 11 years ago

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

xname• 11 years ago

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

jevgeni• 11 years ago

Is everyone's art equally valuable?

flashman• 11 years ago

This just confirms to me what a big deal Taylor Swift is.

Can anyone remember a time Apple reversed a business decision, or promised to fix some kind of technical issue, this quickly? (Critical security flaws notwithstanding.) Certainly not when Steve 'Hold Different' Jobs was still alive.[1]

[1] http://www.engadget.com/2010/06/24/apple-responds-over-iphon...

h_o• 11 years ago

Apple must have calculated that her influence potential is greater than the value of if the free streaming wasn't paying the artists.

I mean, she has almost 60M followers on twitter - ~20% of the US' total population.

Now Apple can recalculate and pay them barely just enough to have their original projections corrected. The free press is great - and they'll probably even gain from it!

vermooten• 11 years ago

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

fezz• 11 years ago

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

bedhead10• 11 years ago

I really, really lament Apple caving in on this. The deal they had before was perfectly reasonable - everyone's interests were aligned and both sides brought something to the table. Apple wasn't paying royalties during the trial because it makes perfect sense to have a model that says, "you make money when we make money." Besides, we all know that streaming revenues for everyone except the top .1% of artists are largely irrelevant, especially during a mere three month window.

It's obvious that Taylor Swift was motivated by one thing and one thing only: maximizing her own revenue. That's it...and that's fine. But I cannot stand her disingenuous "won't someone think of the children?!" nonsense. It's like LeBron James publicly pleading for the NBA to share more of its revenue so that the younger players can be better off in retirement, while leaving out the fact that he'll personally take 90% of any incremental revenue. Taylor Swift seemed so concerned about other people, but I sure don't see her offering a pay cut or anything. Instead she successfully guilted Apple into paying because they've got a ton of money. Pathetic.

simonh• 11 years ago

If the deal were considered in isolation you might have a point, but you need to consider the competitive landscape and why Apple wants to offer the 3 month free trial. (I don't agree with your being down-voted, you're posting a valid oppinion, just one I happen not to agree with).

Apple is offering a 3 month free trial in order to win market share for their service from the established streaming services. Doing that benefits Apple but does not benefits artists.

Say I'm a Spotify subscriber. I cancel my Spotify service and switch to the Apple service. Artists suffer a 3 month gap in revenue during which they're not being paid either by Spotify or Apple for my listending to their music. The only people who really benefit are Apple who now get a split of the revenue instead of spotify, and the only people who really lose out are the artists who lost 3 months pay.

There's no reason artists should have to forgoe revenue in order to benefit Apple in that way.

bedhead10• 11 years ago

You are talking about a three month gap for a small minority of users, who will then become paying subs for presumably many years, locked in to the world's most powerful ecosystem, at HIGHER royalty rates, with a company that is insanely well-funded and will promote the hell out of it. This is a bad thing???

There is give and take to every deal. Telling artists, "you make money when we make money" is perfectly, 100% reasonable, especially considering each side was bringing important things to the table.

nalsh2• 11 years ago

I'm trying to understand why you think it's bad that Taylor Swift tries to maximize her own revenue, but it's fine that Apple does the same, using her likeness and music to do so.

bedhead10• 11 years ago

I'm fine with Taylor Swift maximizing her own revenue...if she was simply honest about it. She is demonstrably not. She decided to turn it into a moral crusade and in her own words, "This is not about me." I am so turned off by it. Do you really think it's a coincidence that the only artist to write a big open letter to Apple about this was the one who stood to profit the most from it?????

gambiter2• 11 years ago

This is the question all of the detractors need to ask themselves.

Honestly, when I first heard of the story (word of mouth) I immediately thought she was not understanding how it really worked. I had flashbacks to Metallica resisting streaming because they just didn't understand it. I thought there was no way Apple _actually_ wouldn't pay artists during those three months, so I dismissed it.

Then I realized she was right.

I wouldn't say I'm a Taylor Swift fan (at best, some of her music is fun to listen to with my teenaged niece) but the amount of ire some people have for a pretty person is just astounding. Yes, she's pretty. Yes, she sings about things that tend to be targeted at teens, especially girls. But those points don't change anything.

The letter accurately said, "These are not the complaints of a spoiled, petulant child." I have no idea how many people are behind her persona (I would guess it takes the equivalent of a small town) but I bet some of them had a stake in helping craft the letter. This was a business-to-business correspondence, even if it was written 'as a girl'.

At the worst, she's a logo for a company. At the best, she's actually got a pretty solid sense of business. Either way, she has a right to use her persona to make money.

a-dub• 11 years ago

So if I were to sign up for this thing, and only listen to one indie artist, would all the royalty money collected from me go to that artist (and related rightsholders), or would it be the same crap we already have where good ol' Taylor Swift gets a huge cut no matter what thanks to her "network effect"?

None of the press around Apple Music seems to even attempt to explain how the royalty pie is actually cut up, and to me at least, that's by far the most interesting part. (And why this space is ripe for disruption)

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

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