Apple Music bows down to Taylor Swift
After protests from independent labels and the more vociferous threat from Taylor Swift, Apple will now pay royalties to music labels and publishers during the three-month free trial of its Apple Music streaming service. Apple has decided to pay a "per-stream" royalty during the trial period. This news was welcomed by Taylor Swift in her tweet, "I am elated and relieved...They listened to us."
In June 2015, Apple will launch its much awaited Apple streaming service called Apple Music. The service will be launched in more than a hundred countries and is expected to reach Android users by fall 2015. Apple is making its new service free for three months so that people can try it, following which a monthly subscription will cost $9.99, or $14.99 (family).
The Apple music trial will result in $4.4 billion in customer acquisition cost to Apple which will utimately be borne by record companies. Therefore, independent labels such as Beggars Group (Adele, Jamie XX), Cooking Vinyl (The Prodigy, Billy Bragg) and Domino (Arctic Monkeys, Franz Ferdinand) may not sign on due to the free trial stalemate between Apple and independent artists.
Apple is having a hard time convincing Indie labels to join in the Apple Music launch. They're concerned that Apple's three month free trial plans will deprive them of much needed revenue. The labels are more miffed because Apple has ample resources to forgo of these terms and conditions, which will "literally put people out of business."
Taylor Swift lashed out against Apple's 3 month free trial policy under which the artists and rights holders would not be paid at all for the duration. She said that she was "shocked and dissappointed" with Apple which has a history of being a progressive company. She said that she was fighting for those on the brink of releasing their first albums or singles.
"Three months is a long time to go unpaid...We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation."
Apple senior VP of Internet Services and Software, Cue tweeted "#AppleMusic will pay artist for streaming, even during customer's free trial period," followed by "We hear you @taylorswift13... Love, Apple."