Apple will now pay rights holders during Apple Music trial period, Eddy Cue says

Posted:
in iPod + iTunes + AppleTV edited June 2015
Following widespread outcry over its policy of not compensating rights holders for streams during Apple Music's three-month free trial, Apple software and services chief Eddy Cue said late Sunday that the company has reversed course and will indeed pay royalties while users evaluate the service.




Cue initially made the announcement on Twitter, writing that Apple Music "will pay artist [sic] for streaming, even during customer's free trial period." He later confirmed to Re/code that rights holders will receive a per-stream fee during the trial, with payments reverting to a percentage of revenue once users become paying subscribers.

Cue said that the change in policy was prompted by complaints from artists including Taylor Swift and labels like major indie consortium Beggars Group, which includes Adele and Vampire Weekend. They expressed concern about the loss of income that could come from offering music for free --?both in terms of slower download sales and falling marketshare from Apple Music competitors that do pay --?that might be financially devastating for smaller imprints and independents.

The decision to change tack was made jointly by Cue and Apple Chief Tim Cook, Cue said. Cue also spoke to Swift personally, though it's not clear if the shift will be enough to prompt her to return her latest album to the service.

"I did reach out to Taylor today, and talked to her, and let her know that we heard her concerns, and wanted her to know that we were making changes," Cue said. "She was thrilled to hear from us and that we were making the change, and we were grateful for that."

Apple had been offering labels a higher-than-normal royalty rate, which Cue said will not be altered, in exchange for withholding payments during the trial period. In the U.S., rights holders will receive 71.5 percent of subscription revenue --?1.5 percentage points higher than the industry standard of 70 percent --?with that number rising as high as 73 percent abroad.
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Comments

  • Reply 1 of 272
    kibitzerkibitzer Posts: 1,114member
    Good. Fair is fair. As Apple used to be fond of saying - Don't Steal Music.
  • Reply 2 of 272
    dalledalle Posts: 20member
    Apple listens - probably good use of ... couple of hundred mio. $(?)
  • Reply 3 of 272
    "Widespread outcry" = one whiner with lemmings for fans. 8-)
  • Reply 4 of 272
    slurpyslurpy Posts: 5,179member
    Taylor Swift is an attention-whore, using "indie artists" as a ruse for her greediness. Still, it's pretty incredible and impressive how quickly today's Apple listens to feedback and makes changes, in order to avoid potential further negative PR.
  • Reply 5 of 272
    agramonteagramonte Posts: 345member

    Nice,... Well done

  • Reply 6 of 272
    rayzrayz Posts: 814member
    Quote:
    Originally Posted by TheWhiteFalcon View Post



    "Widespread outcry" = one whiner with lemmings for fans. image



    Apple bitch-slapped by Taylor Swift.

     

    Well I never.

     

    This show of weakness will kill their ability get any kind of leverage on deals going forward. They have effectively given away their ecosystem advantage . . . to Taylor Swift. The TV service will never get off the ground without Apple paying through the nose for it, if it gets off the ground at all. Every little outcry by competitors and Apple-haters will be met with capitulation until the money pile is whittled away to nothing

     

    This has been a PR disaster since the day Apple Music spluttered and limped on stage (at a developer's conference no less!) and culminating in this. The headlines won't read that Apple did the right thing; they'll say that Apple caved, and that's what content providers will remember as they walk smiling into negotiations with Cue. If we create a stink, Apple will cave.

  • Reply 7 of 272
    slurpy wrote: »
    Taylor Swift is an attention-whore, using "indie artists" as a ruse for her greediness. Still, it's pretty incredible and impressive how quickly today's Apple listens to feedback and makes changes, in order to avoid potential further negative PR.

    Even if that were true, the artists should be able to have a card to play in this poker game, and that's what she did. There's no right or wrong when negotiating terms. Her open letter was a shrewd move, because it was picked up and spread around by the mainstream media (not just tech sites), and got repeated with the usual "Apple is evil and stealing from artists" narrative attached, some with more intentional zeal and anti-Apple fervor.

    I'm just just glad it's over, and I hope her music can go back to being ignored by all the Apple-haters who, for one day, made her their honorary spokesperson in their negative troll campaign against Apple on the Internet.
  • Reply 8 of 272
    singularitysingularity Posts: 1,329member
    slurpy wrote: »
    Taylor Swift is an attention-whore, using "indie artists" as a ruse for her greediness. Still, it's pretty incredible and impressive how quickly today's Apple listens to feedback and makes changes, in order to avoid potential further negative PR.
    Impressive how stupid the original decision was. Who would have imagined that some people might have an issue with giving away 3 months of work for free?
  • Reply 9 of 272
    john.bjohn.b Posts: 2,721member

    SMH!  How can Apple be so tonedeaf with Jimmy Iovine on staff?  "Taylor Smith vs. big mean corporate Apple", how did they not see that coming in Cupertino?  I guess Eddy didn't want to be the subject of a TS breakup song on her next album...  <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 10 of 272
    john.bjohn.b Posts: 2,721member
    Quote:
    Originally Posted by Slurpy View Post



    Taylor Swift is an attention-whore, using "indie artists" as a ruse for her greediness. Still, it's pretty incredible and impressive how quickly today's Apple listens to feedback and makes changes, in order to avoid potential further negative PR.

     

    Yes, yes she is.

     

    And yet...  She has the clout most artists do not, due to their contracts with the record labels.  The nature of the so-called "360 deals" means the artist is still fully on the hook for all of the costs of their albums and promotion, and those liabilities don't magically go away for the three months that Apple wanted to give away their music -- and give it away to people who by the definition of music subscribers, who have zero interest in ever buying the albums in question.

     

    I'm no fan of Taylor Swift (though my daughter is), but she used this colossally tonedeaf moment on Apple's part to make them do the right thing...  Yes, for her, but also for many other artists.

     

    And that never would've happened if Apple didn't insist on getting their own way without making sure they had at least the majority of artists on board.

  • Reply 11 of 272
    rayzrayz Posts: 814member
    Quote:

    Originally Posted by Suddenly Newton View Post



    I'm just just glad it's over, and I hope her music can go back to being ignored by all the Apple-haters who, for one day, made her their honorary spokesperson in their negative troll campaign against Apple on the Internet.

     

    You think this is over?

     

    This show of weakness will have ramifications for years to come now that Apple has demonstrated that it will cave in to social media blackmail.

  • Reply 12 of 272
    rayzrayz Posts: 814member
    Quote:

    Originally Posted by Slurpy View Post



    Taylor Swift is an attention-whore, using "indie artists" as a ruse for her greediness. Still, it's pretty incredible and impressive how quickly today's Apple listens to feedback and makes changes, in order to avoid potential further negative PR.

     

    She's not an attention-whore; she's a shrewd business woman who just owned the world's richest company.

     

    They should fire Cue and offer her a job.

  • Reply 13 of 272

    I think this was a wise move by Apple. I felt Apple should be compensating artists during the free period. However, I did hear another view when listening to the AI podcast, where paying the artists and then dumping it for free was akin to buying into the market, which could prompt investigations.

     

    Still, I am happy they did this. It really gives the artists a better impression of Apple. 

     

    @Rayz, I think it does not put Apple in any kind of a back-foot position. If anything, this would actually make the people negotiating for the TV streaming feel a little better, knowing that Apple is willing to listen and not pushing a "my way or the highway" agenda.

  • Reply 14 of 272
    tomhqtomhq Posts: 22member
    I feel this is what Apple should've done from the start. It's puzzling how with that much money in the bank and they still act.. well, cheap, sometimes. It's just bad PR.
  • Reply 15 of 272
    ppietrappietra Posts: 171member
    Quote:

    Originally Posted by Dalle View Post



    Apple listens - probably good use of ... couple of hundred mio. $(?)

    More like a few billions. Considering that Apple is going to offer the service on Android there is a potential for more than 1 billion trials. Paying the 3 month subscription in full would mean something like 21 billion dollars. Probably will only pay a fraction of that but it can still be a few billion, a lot more than potential profits in the near future for all the streaming industry.

  • Reply 16 of 272
    Now Taylor Swift and all the other whiners will have to make all their music available on Apple Music or look like idiots. Apple wins.

    Even better, by having artists complain and giving the appearance of "caving in" to them, Apple is now able to use their massive cash hoard to promote Apple Music and make the deals that Spotify can't. All without raising any antitrust or competition issues, since, you know, Apple is doing what the artists want.

    Well played, Apple. Well played.
  • Reply 17 of 272
    slurpyslurpy Posts: 5,179member
    Quote:
    Originally Posted by Rayz View Post

     

     

    She's not an attention-whore; she's a shrewd business woman who just owned the world's richest company.

     

    They should fire Cue and offer her a job.


     

    You've said pretty much the same thing 3 times in a row. Yeah, this is an absolute disaster, and Apple is doomed. Your flavor of sensationalism and concern-trolling is so damn tiresome. How the **** did she "own" them? Making this change probably prevented a never-ending shit storm that would have had horrible PR repercussions. Apple does not cave in to everything, only the things that it believes are also in its own self-interest, which this clearly was. People like you don't get that, and never will. This was a wise move, and Apple does not retain its loyalty and brand value by telling everyone at all times to go **** themselves, even though they can. 

  • Reply 18 of 272

    Taylor Swift, the mediocrity rules.  I still don't get her popularity, her music is bland and bullshit. 

  • Reply 19 of 272
    rayz wrote: »
    You think this is over?

    This show of weakness will have ramifications for years to come now that Apple has demonstrated that it will cave in to social media blackmail.
    No, but listening to your bullshit is. Welcome to the Block List.
  • Reply 20 of 272
    9secondko9secondko Posts: 929member
    Great...

    So Apple pays money for s free trial in which it makes none while the artists do nothing but reap the rewards.

    Sounds fair...


    Apple already gave the artists s bigger cut than competing services to help compensate for the longer trial.

    Surprised they caved to such foolishness.

    Everyone thinks that because Apple has been diligent to save money that they must therefore need to spend it.
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