“AppleMusic will pay artist for streaming during customer’s free trial period” | Hacker News Reader

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

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251 pointsjflowers45137 comments

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."

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

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.

Aren't you forgetting that this was about making sure artists were compensated for their work? That's been now met. Apple isn't going to offer them the same rate they would get when people paid for the service when they aren't just like Spotify doesn't pay premium-tier royalties on their free-tier users.

I'm sure the new trial rates will be broadly similar to Spotify's per-stream rates, which average[1] between $0.006 and $0.0084. Apple Music has no advertising; you can't pay a percentage of revenue that doesn't exist.

1. http://www.spotifyartists.com/spotify-explained/

They're licensing the music. Whether they make any revenue or not doesn't matter.

You can't hand out other people's stuff for free and then refuse to pay anything because you didn't make any money from it. And I'm saying that as someone who thinks the current copyright system is incredibly broken.

Likewise an artist can choose not to have their music on the service.

That point is valid, but Apple is trying to create a de-facto monopoly and even now it's really an oligopoly (which is only marginally better but in many ways worse). In such situations the power balance shifts dramatically and for many artists the choice they have is philosophical at best.

Unless Apple threatens to remove their music from iTunes if they don't agree to be on Apple Music as a few indie artists have publicly stated.

Unless the contract with their label says otherwise.

I mentioned that only to illustrate why they'll likely be paying a flat fee during the trial, rather than a percentage of the (non-existent) revenue.

They are not handing out music for free. They incur costs, such as IT costs, marketing costs, plus the costs of having amassed hundred of millions of users. You could just as easily turn your argument around: the musicians incur zero costs for putting their music on Apple Music.

So did record stores. They had rent, signage, advertising, staff salaries and electricity bills to pay. You can't say because we have costs to sell your music, that we should be able to take those costs and pass them to the music artist and consider that payment for their product.

Except they aren't passing any costs to artists. There is exactly zero marginal cost for artists. Artists make their music available for free for a mere three months in exchange for Apple making a massive investment in the service. Keep in mind that 99.9% of artists don't even make any real money from streaming royalties anyway, especially during such a small window! And if customers like the service, they'll pay and presumably be members, as part of the world's most powerful ecosystem, with higher royalty rates than other services, backed by a deep-pocketed company that will promote the living hell out of it. How is this a bad thing??

That would be relevant if record stores charged artists for their operational costs.

It doesn't matter how much money you make. You're using someone else's property and that's what you pay license fees for. Although I generally object the equivalence of physical and intellectual property -- this isn't any different from selling physical goods:

If you want to give a thousand records away practically for free, you still have to buy the thousand records and the producer has no obligation to give you a discount just because you're not going to make money with it. Not even if you have to pay for the cars to pick up and drop off the records and the wages of the people delivering the records. If you want to burn your own money, nobody is stopping you. But don't ask other people to add their money to the pyre for free.

You can if that is the terms by which you licensed the music.

Why is that "worth noting"? Is that an unfair rate? If so, what is fair? Your implication is that "about a hundreth of a cent" per stream is not fair.

I think it was a typo and meant to be "worth noting"

It was a typo meant to be "worth noting". Many people have bandied about Apple's "higher rate" than Spotify, but the difference is likely to be only one hundredth of a cent per stream. Apple will pay out 71.5% of their $9.99 fee vs the 70% that Spotify does. An extra $0.15 a month per subscriber divided by all streams works out to about one hundredth of a cent per stream difference. So, a popular artist's paycheck for millions of plays of their song would be $10,200 vs $10,000 using the typical average streaming payout of a little over 1/2 a cent per play.

Plus, there's the fact that Apple Music will cannibalize a lot more iTunes sales than Spotify does.

Yep. And it appears that the Artists, like the music industry, really don't get that things have changed.

Hey, I'm old school. I can identify with them. I like to buy my music. I don't get subscriptions where if I stop playing I can't listen to anything.... but I find myself listening to podcasts-- 2 hour long podcast of EDM. My favorite one has several YEARS of podcasts and despite skipping months at a time I'm still over a year behind. I'm not paying them anything[1], they're not paying the artists anything (it's meant for promotion more than anything else.)

I did buy an album once.

So, even though my habits are different the industry has changed.

Apple is progressive. The whole point of the free trial is to get people addicted to the service. In the long run Taylor Swift will make more money from a free trial than if Apple offered the service without a free trial-- because more people will sign up and ultimately end up with royalties going to Taylor.

I think it's hilarious that Apple is (as ever, of course) portrayed as the bogeyman for trying to market a service that will make the artists more money.

Just like they are constantly derided for taking %30 of revenue (which is a huge improvement over the often %95 and worse terms that you had to accept before the iPhone came out).

Things have changed. I'll try this service and see if it changes my habits. If Tayler didn't make out from it in 6 months then go ahead, complain away and have some data to back it up.

But making a big to do about it now is kinda silly. Like people being mad that Apple gave them a free U2 album. Sure they handled it clunky and If they do it again I'm sure they will be better. But OH! Apple gave me free music! #FirstWorldProblems

[1] near as I can tell, it's a record label that puts out the podcast and I think it's their artists they're putting in it.

EDM follows a different model that has existed since the birth of house et al DJs: demo sets are given away free because:

1) most producers are DJs as well, and often (or at least historically) singles were used as much to promote the DJ as they were a revenue stream.

2) the few producers that weren't DJs were also engineers for other DJs who weren't very good in the studio. Thus they made their money engineering

3) most clubbers wouldn't be interested in a 7 minute unmixed single of their favourite club track. So the single sales generally go to other DJs (and there's thousands of DJs who never make it out of their bedroom - so the DJ scene is considerably bigger than it sounds).

The modern EDM scene is likely a little different these days since many EDM DJs are now also pop artists. But I think they still essentially follow this model.

> In the long run Taylor Swift will make more money from a free trial than if Apple offered the service without a free trial-- because more people will sign up and ultimately end up with royalties going to Taylor.

Someone did the math and came to a different conclusion: https://www.baekdal.com/opinion/taylor-swift-is-right-about-... . Assuming Apple Music generates $ 10 billion in revenue per year, artists never make up the cost while Apple saves $1.6 billion the first year of Apple Music.

Thomas Baekdal's calculation model[1] is fundamentally flawed to conclude with "artists never make up the cost".

Apple may be right or wrong with their optimistic projections but people need to at least understand the business proposition they are offering. The concept of "making up the cost" has nothing to do with recovering the 3 free months from Apple as if it was a closed economic system. The idea is that the musician recovers the 3 free months from the entire music industry because Apple will have a wider audience and a bigger platform.

flawed model: get $0 for 3 months and never get it back whether the future Apple payments total $1 billion, $10 trillion, or infinity.

Apple's model: get $0 for 3 months but you (potentially) come ahead because we pay higher royalty AND we have the potential to convert a bigger % of 800 million iTunes accounts to paid streaming subscribers which will exceed Spotify's 20 million subscribers.

In other words, the artist is supposed to make business comparisons based on:

-- lost $$ for not being on Apple's platform and only providing music to Tidal & Spotify

-- more $$ from customers switching away from Spotify

-- more $$ from new streaming customers that would never have paid for Spotify but would subscribe to Apple Music because the app is already preloaded on the iPhone and there's less friction

(Each musician was supposed to weigh those bullet points to see if the big picture of skipping 3 months of payment made financial sense. It may or may not.)

As an analogy, it's as if a merchant concludes that accepting credit cards will "never make up the cost" because paying the monthly fees for the VISA/Mastercard mag swipe terminal and the transaction rates of 2% will never be paid back by the VISA/MC corporate entity. That's only true if one has a bizarre concept of thinking of the payment network as a closed system.

However, rational businessmen think outside of the CC payment system and conclude that accepting credit cards is net positive because behavior analysis shows that customers spend more when they can use a credit card instead of cash or checks.

[1] Thomas Baekdal's arithmetic and logic:

  If we assume Apple Music will have $10 billion in revenue per year, we get this:

  First year: 
  70% royalty / no free trail = $7 billion to artists
  71.5% royalty / 3 months free = $5.4 billion to artists
  After five years:
  70% royalty / no free trail = $35 billion to artists
  71.5% royalty / 3 months free = $33.9 billion to artists
  After 10 years
  70% royalty / no free trail = $70 billion to artists
  71.5% royalty / 3 months free = $69.7 billion to artists
  So, the artists never make up the cost while Apple saves
  $1.6 billion the first year of Apple Music.*

Apple isn't progressive by having the artist paying the costs of Apple's trial offer. That is flat out dishonest if not theft.

The costs of trial offers are to be born by the company attempting to obtain subscribers or long term service. You don't have other people bear that cost for you, let alone product you have no legal right to profit off of.

I know, its a trial, how can their be profit. The profit is in the idea they will get a subscriber from the trial which is where the risk comes from. Apple should be taking the risk getting subscribers, not artist Apple chooses to play during the trial

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.

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

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

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.

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.

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.

And yet it's not OK to question Apple for doing the same? Every decision they make is about gaining more power and money. More influence. More market. All they care about is money, and they don't give two shits about the little guys. Personally, I don't care about T. Swift, but I'm glad she used her fame to combat Apple's power grab.

Well, what I've learned by looking at comments and all my downvotes (despite making perfect sense) is that people want Apple to pay musicians more, just 'cuz. Apple makes a lot of money and many artists don't, so, uhhh, like, pay them more please. Oh well.

Funny, all my indie artist friends hated Apple's new policy. And Apple still won't say what the payment will be during the free trial period. It'll be less than the typical ~1/2 cent per play that's the current industry norm. Likely a lot less.

Musicians will hate ANY streaming deal. In fact, nearly everyone (it seems) is on record hating all these services. Yet the overwhelming majority of them don't opt out. Why is that?? Hmmmm...maybe streaming isn't such a bad deal somehow. Possible? I keep waiting for the mass defections as proof. People vote with their feet, artists included, and all I see is a lot of talk and zero action. It's basically just people whining for more money.

Well, Apple was threatening indie artists with expulsion from iTunes if they didn't agree to Apple Music's terms. So, there's that.

As for Spotify et al, label artists can't opt out. Their contracts won't let them. The reason Taylor Swift's current album isn't on any streaming services is because she makes a ton more selling it and streaming would cannibalize sales. And her current album (and only her current album) she did without a major label... so she's one of the few that gets to make that call.

Streaming services want current music to get and keep subscribers. Musicians want their latest music to be sales and their back catalog streaming (ala Netflix, etc) to maximize income.

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

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

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

Yes, that is true. Only the singles are available to stream. However, there's no guarantee that she's gonna release it in AppleMusic, she may only release older albums, like she does in Rdio and like other bands did in Spotify (specially Coldplay).

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.

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.

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.

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).

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.

> think about how many people would have to be "in it" to make it work

TS, her lawyer, some top guys in Apple and their marketing division? It could very realistically be less than 5 people.

I don't say I support the theory, just want to point out that it doesn't take much to write an open letter and then respond to it on Twitter.

Does TS really have to know? I think her outrage would be more believable if she didn't.

How sure are you the outrage is 'hers' in the first place if it was in written form on a blog? Believe me, her tirade was edited, vetted and revised by multiple parties six ways to Sunday. It matters very little if the original author was TS herself.

And your proof of that is?

No proof. This is the role of artist management companies. Taylor Swift has her own management company. All this gs being equal they managed her post.

I could similarly claim "OS X El Capitan is being QA tested six ways to Sunday" without being in Cupertino. You could ask me for proof and I would have none.

> Believe me

From what authority do you speak on this topic?

no authority whatsoever. My statement is unfalsifiable unless TS/her team steps fprward.I admit it's all conjecture, but I should note that TS had a publicist handling her public relation for 7 years before moving that function in-house to her management company.

TS has so far given me the impression of being business savvy and if I'm charitable to assume competence of her management company, I'd assume she would shy from legal minefields

Given the above priors, my estimation is that her lateat blog-post (like all others) was vetted by publicist(s) & legal advisor(s). YMMV.

Although I dont think this was all intentional (see: letter sent to news companies re: news app), lets play devil's advocate.

It doesn't require everybody to be in on it to execute this. It only requires one entity and that's apple.

Apple pings indie artists they know will get mad. The singer of the brian jonestown massacre is known for his rants. They get a bunch of people pissed off "Free music.. free music..." and wait for it to go viral. Then, flip the script and campaign done.

But again, i think they just did a good job of turning this nightmare into a positive.

Also, over at /r/apple it became 'fact' that it would actually be illegal for Apple to have a three month free trial due to anti-competitive behaviour - it could be seen as them using their large cash resources to dump or flood the market to gain an unfair advantage.

Wearing my altruistic tin-foil-hat, I would argue that Apple wanted to pay indie artists all along (because it's art and they respect them!), but were afraid of the antitrust implications of doing that (re: ebooks litigation). So they made this deal (of not paying artists) to go public, knowing it will 'backfire' and Apple would have the grounds to 'reverse' their decision and pay artists.

that they wouldn't pay artists initially is pretty bad press, to me, at least. Even with the 180, apple doesn't look good here, in my opinion.

swift has a lot of influence on her fans. It's not a minor threat that apple is facing.

Oh I agree. Occam's razor gets in the way when I try and consider that this giant conspiracy happened.

And yet I bet people wouldn't consider Ian Mackaye to be "whining."

Occam's Razor, man… the problem with conspiracy theories is that they require everything to work flawlessly and EVERYONE to keep their mouths shut. nonsense.

NSA was spying on people for years before it was made public, tens of thousands of people had managed to keep their mouths shut. Collusion is a thing that happens all of the time, and considering the money involved its bound to happen again.

No, it wasn't. In fact, many of us were surprised at the outrage of people around here, since we thought it was common knowledge. Even the European Parliament had issued a report back in 2000 about the widespread communications/internet spying. See ECHELON.

See also Mark Klein's denouncement of their AT&T spying, which prompted a lawsuit by the EFF back in 2006, charging them with having created an "illegal and unconstitutional program of dragnet communications surveillance".

There had been plenty of leaks over the years.

So there's never been a conspiracy, ever?

It's nonsense to think Occam's Razor is a kind of proof.

I don't believe the conspiracy theory that they colluded with Taylor Swift either. But I don't think they would have had to - she's been fairly vocal about free streaming the last couple months, this reaction should have been easily expected.

Far more likely than apple planning this with her is apple anticipating her reaction (or if not her, somebody. Jay Z likes to make noise about streaming royalties too). Either they get a reaction from a celebrity and get to dominate the news cycles with their new product for a while, or they get to set a new precedent of not paying artists. Either way, apple wins.

Eh. Conspiracy theories thrive because people just can't believe that morally-grey area people seem to keep making out like bandits from bad situations.

No one did anything. A thing happened, it backfired, some people sat down and figured out a solution, are still richer then you will ever be at the end.

By your logic: non-disclosure/secrecy agreements would never work either.

Do they work? I'm thinking out loud, but I see two types of case:

1. People care enough about what's being kept secret, e.g. the Apple Watch. As a result, it leaks and the agreement didn't work.

2. People don't actually care about what's being kept secret because it's really boring, e.g. almost every corporate agreement. So yeah, nobody talks, but that's because nobody cares.

> 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.

a) Successful secrecy of new product development at Apple

b) Snowden revelations

c) Other things that we don't know about because people can keep their mouths shut

> a) Successful secrecy of new product development at Apple

Now days pretty much every Apple product leaks in some way prior to announcement. From manufacturing CAD schematics to actual hardware prototypes.

You only need three people to form a conspiracy; two people to conspire against a third party. Tim, Taylor and the public.

I don't think Swift is so influential as everybody thinks. Apple turned so fast after her open letter, it makes me think they were already thinking about it. Not that Swifts letter was meaningless, but stuff usually takes a bit longer in the corporate world.

Oh, they could easily let things slip: but it's not the kind of information that would create a sensation from an anonymous tip. If someone would go on record and tell the journalists the whole story, yes — but Apple is known to successfully avoid this kind of disclosure. And if some PR person would tell it a friend over a drink in a bar, I don't believe that this could potentially explode.

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.

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

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

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

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

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.

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

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

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?).

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.

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.

The story then changes from "Taylor Swift making sure artists are compensated for their work" to "Taylor Swift wants more money". Apple was never going to pay royalty rates based on people that paid $10 a month for the service on people that were paying nothing, asking that they do would make Taylor Swift look poorly.

The story changes to Apple is still going to short change artists to promote its service. Taylor Swift will look fine as she has incredible fan loyalty and communicates with her "customers" in a way Apple cannot.

Guess you didn't see the reaction to the Tidal unveiling. All those artists have loyal fans as well.

I did and it has nothing to do with this. Tidal has so many problems (e.g. streaming rights to Beyoncé) and relations to other artists that the situations are not similar.

The situation is absolutely similar because the outrage was about "rich millionaires asking for more money".

No one at Tidal said anything about Indy artists.

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

> Apple will always make sure Artists are Paid

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

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

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.

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.

> 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...".

"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.)

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...

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.

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.

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.

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.

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

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

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.

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)

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

I think it could have used an exclamation point myself!

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!

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...

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.

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

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

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...

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)

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.

The Major Difference is Apple will not be offering an ongoing free tier to compete against their paid tier. That's got to be attractive to people like Taylor.

The free tier is supported by advertising..Does this not work well for the artists?

The artists hate it - and the return is almost nothing. For example - look at Youtube - you can stream anything you want, including all of Taylor Swifts catalog - zero to no advertising.

I was at a party this weekend with a bunch of 20 somethings here in Singapore - and that's all they used - Nobody even mentioned Spotify - they just logged onto the wireless and added their songs to the queue - it was slick and 100% free (to the user) - and seriously, I don't recall a single ad in 3+ hours.

The goal is obviously to convert free tier users to paid tier users. If you can do that, then eventually this stunt might pay off, at least for the record companies and artists who last enough to absorb 3 months of missing revenue. But if you're converting someone from a different paid service and not paying the artists, you are literally taking money away from them, and making them pay for your bet.

It does not at all seem clear that you're going to convert a ton of free users - like you said in a child comment, there are numerous other places where people can stream music for free. It seems like an admirable goal, but then that's how Spotify pitched it's model to begin with as well.

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

"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.

Is everyone's art equally valuable?

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

One might say that their previous position was tone deaf

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.

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.

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.

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.

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?????

Oh I agree with you there, if Taylor herself is solely responsible for this note. The weird thing is, although we use "she" to describe Taylor Swift, Taylor Swift is a coordinated business. This memo is really just a correspondence between two large businesses.

Could be a bit of a stretch, and this note wouldn't be made public if she didn't sign off on it, but I think this is more measured than an artist just pushing for revenue.

I honestly think Taylor Swift wrote this entire letter herself. She famously takes pride in writing her own music and going out of her way to say things that go beyond promoting herself. (Fwiw I kinda like her album) But she's wrong here, and I intensely dislike how she's manipulating the situation by reducing it to, "Apple has a lot of money and smaller artists don't." It's actually wildly business-savvy on her part.

When she previously removed her album from Spotify she implicitly let it be known what her motivations were: maximizing her own revenue, even if it was at the expense of other musicians. End of story. She would rather you give your $12 entirely to her instead of Spotify (or another album), which spreads it around. And I'm totally fine with that decision since she might seriously be the only musician alive with enough juice to get away with it. But the point remains that she's already made her motives perfectly clear, so when she wrote that letter to Apple it was purely about making sure she got paid during that three month trial. Of course, other artists will get to ride her coat-tails some, so she played up that angle and pretended it was a moral crusade. If she tells Apple, "Tell you what, take the money you'd pay me during those three months and distribute it evenly to everyone else." then I'd applaud her. Until then, she's a hypocrite going after more money.

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.

"All detractors"? Evidently I'm the only one :)

Heh, I was sort of wrapping all of the negative comments I've seen (HN and otherwise) into a singular reply.

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