Initial plan Backed Away
Apple had already agreed to share revenue from the new Apple Music service once users start paying a $10-a-month subscription fee for the service, which it plans to launch June 30. The technology giant wasn't planning to pay labels and artists directly for the use of their music during the free, 90-day trial period that it's offering to get fans to try the service.
Apple had been, for the most part, a good partner for record labels and artists since 2003, when the iTunes store first opened. The company's recent moves were met with incredulity.
Artist Rebellion against Apple Music
Taylor Swift wrote an open letter to the company saying she would not allow them to stream her album "1989". She wrote, “I find it to be shocking, disappointing… Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. We don’t ask you for free iPhones.”
Swift acknowledged that while she doesn’t need the money, there are plenty of struggling artists who do. “Please don’t ask us to provide you with our music for no compensation.”
Soon after the letter was published online, Apple changed its mind and reversed its payment policy. Apple's Senior Vice President Eddy Cue even called Swift to let her know. The company says it will now compensate labels, songwriters and performers even through those free three-month trial periods.
The competition to have the first hearing of a new album by a particular singer or band is going to become even more powerful than it was before and Apple seems to be highly aware of it. Music streaming services' goal is to bring artists and fans close, they have to court both sides.
The Value of Music in the Digital Age
Apple’s move stands out from how Spotify dealt with the rebellion from the same artist last year. Swift said she only wanted her album made available to Spotify subscribers rather than the streaming service’s ad-funded listeners. Instead of looking to negotiate, Spotify dug its heels in and Swift pulled her music from the service.
At a time of deep anxiety among artists small and big about the value of their work, Apple would rather appear to be the music business' friend than its frenemy.
Apple promised to provide an above-industry standard of 71.5 percent royalty payment, compared to the basic 70 percent paid out by competitors such as Spotify and Google. According to a new statement published by The Wall Street Journal, it appears artists' satisfaction with the policy change could become turbulent again, with the company suggesting the royalty rate during the free trial period will be somewhat lower than normal.
While the issues surrounding Apple Music royalty rates are still being ironed out, Market Watch reports, music industry insiders representing both independent and major labels agree on one thing: Apple Inc.'s streaming service is a big plus for the industry.
Most people who weren't initially interested in Apple Music probably now know what it is. SAlthough Swift's letter called out Apple for not treating artists fairly, the whole fiasco put Apple Music in the spotlight for millions of people.