Apple Says “We Hear You Taylor Swift”, Will Pay Musicians During Free Trial
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blogs, articles, etc all over the globe were written about apple music, for free. would have been far more expensive to buy all that airtime than this little scandal.
so taylor swift gets more publicity, apple music is now an established brand name, everyone and their dog knows about their pricing model - holy shit. hats off to the apple team, playing the outrage-piano like no other.
Given public presence and the way they are steering Apple Music, the personal response - regardless of planning - is less surprising.
They might have been going with the "shared risk" model of free up front play, but bigger payouts to the artists on the subscriptions - but still had their "Apple takes the risk" on the front end, then payouts are smaller on the back end.
Then when artists grumbled about the shared risk model, they kicked in with the alternative model.
edit : typos
I mean, it's not even a trending story on Facebook or Twitter on Monday morning!
It also helps that she wrote a pretty compelling argument that Apple's free trial shouldn't come at the expense of artists.
a) "Oh gosh, apparently having the artists/labels taking the monetary risk for us for trying to acquire a strategic stranglehold on the music industry was bad, we should do the right thing!"
b) "Argh! the backlash is bigger than we anticipated and Taylor Swift is causing too much negative PR. Quickly, change our minds before our service and future music profits are doomed. We'll make it back some other way somewhere down the line"
Doing the right thing because you have to is better than not doing it I guess, but I tend to measure a company on whether they'd try the same thing again if they could get away with it... and Apple definitively would.
It's not like Apple desperately needs the PR and why risk bad one?
Perhaps what I should say is that orchestration seems like a plausible scenario to me. It seems to fit the facts and the outcome benefits both parties.
Regarding negativity risk. What risk? If you assume they planned this all along then how possibly this could be negative. The only risk they had if they would end up ignoring her.
This was a great PR stunt to make Apple look much better than a competitor and I'm afraid Swift was nothing more than a puppet there.
Do you really think that recording companies would allow Apple to just stream their music without any contracts in place? Or not including something so important as a part of it?
Why would she be so intent on getting involved with Apple's streaming service?
Remember when the iPhone debuted at $600 and no subsidy? People said it would never sell at that price. But of course a few did, and then Apple quickly cut the price to $400. Eventually it became $200+subsidy, just like any other smartphone.
Apple seems to start out with their preferred offer and see if it works. If not, they go to the next fallback position. That happens so quickly that it seems clear that they must anticipate it somewhat.
Apple has teams of people working through this stuff. So while you may be right that it was just a prepared backup plan, it also could've been the plan to begin with.
And there's nothing to say Apple wont change its terms later on.
But yes that is part of the brilliance of Apple PR.
I suspect you haven't read Taylor Swift's letter, and I suggest you do. It's fairly short.
Ok. I have read the letter. But my original point still stands. The only reason Apple bothered to do anything was because Taylor Swift said it.
To come to your point. I don't completely buy the whole "Think about the indie artists!" angle either. She herself says that pretty much everyone she spoke to in the industry (she used the word "social circle") was displeased with Apple's system. I am pretty sure there is self-interest involved. I am also positive her record label is happy with the new arrangement as well.
It’s very hard to exactly predict how stories will develop. What if lots of other artists came out and publicly supported Taylor’s stance? Then, even if Taylor agreed to Apple’s next deal, the other artists might not. In which case, Apple finds itself in a pickle and nobody would be suggesting that this was coordinated – even if it was.
If they knew of HN it would be a flame war (to used a 90s reference) in here.
App developers and content producers get emailed 'we are taking more out of your cut' or 'if you don't want us to show ads near your content, reply to this email with "opt out"'
Credit for throwing artists a bone. / Extended publicity for their new music service. / Credit for pleasing TS who has a lot of fans who would also be good customers for Apple
TS Gets:
Publicity / Sales for her new album / Credit for sticking up for artists
Seems like a win-win for both parties. I doubt the revenue lost would have been significant. Anyone have numbers?
What I meant to imply is that the PR is only valuable because it is a musician with the brand value (and public presence) of Taylor Swift.
And, what I mean by that is that if smaller brand musicians complained (as I think would have been inevitable) nothing would change until a larger brand also complained (which would also have been inevitable).
Seems far more likely that this exchange was orchestrated between Apple and TS.
App developers don't have a millionth of the star power.
It is the same with Microsoft's App Store, where they literally pay developers money (or used to) so they port their apps over to the store.
[1] https://www.mikeash.com/pyblog/i-do-not-agree-to-your-terms....
With apps, because of the ecosystem isolations, Apple has no competition for access to THEIR user base (which is significant). So even if Google, Amazon, Microsoft, etc have their own apps stores of significant size, they aren't competing for Apple's users and thus cannot offer better terms than Apple.
What upsets me about the whole thing is that Taylor Swift is absolutely not representative of most musicians. Unlike most young artists, she actually owns the recording rights to her albums. Typically you have to complete a 3-album deal where the studio owns the recording rights before you can negotiate terms (and even then only if you're a major musician by that point); but when your father buys a studio and signs you to a deal you get to keep your recording rights.
Taylor Swift's situation is much more representative of an owner of a recording company than an artist. While she's worried about points on the distribution deal, most artists feel that they'll never make any real money off the albums as long as the studios own the rights and just want you to hear their music and start to engage with them in other ways (social media, live shows, YouTube, etc) that they CAN monetize. By paying artists so little for their recordings for so long, recording companies have caused artists to place very little value on the recordings themselves and look to monetize their careers in other ways.
Probably true, however remember Swift recently had the bout with Spotify, leading to the Spotify CEO revealing she was pulling in nearly $6 million a year from them.
http://www.businessinsider.com/how-much-taylor-swift-earned-...
He asserted her final cut was probably what she was stating, but Spotify's checks to her label were in original $6 million range payouts, and that she should take the issue up with her management if they are taking that much out of her cut.
She's very young, and probably didn't pay much attention to her contracts and such. Even still, 80% is a lot for a label to consume in "management" fees.
Taylor swift has made tons of product and has rights apparently because she does more work on her music than most artists.
https://en.wikipedia.org/wiki/Taylor_Swift#2004.E2.80.9308:_...
The only artists who really care about these streaming payments are already at the top of the food chain -- the vast majority of artists are just looking to get discovered. One could argue that the presence of big artists on these streaming services makes the platforms more valuable for artists at the bottom by drawing more users to them, but it definitely has created a situation where top artists' albums have value as a product themselves, while albums of lesser-known bands are essentially given away for free to try to build an audience.
https://news.ycombinator.com/item?id=9756009
TS simply agreed with a previously articulated view. She didn't invent the argument.
(edit: They already pulled adele from the contract talks from what I gather, presumably because XL is indeed one of those small labels that breaks original talent, but doesn't have the superstar/financial status of the majors to just eat a full quarter of earnings/working capital. And given how spiky a hit based industry is it might be even worse if one of these companies had to launch a once in a lieftime hit record in this window, etc).
The cut on Apple Music for musicians is reportedly going to be 71.5% of streaming revenue. Pretty similar.
When has Apple contacted developers to increase the size of its cut? Amazon claims to match Apple's 70% but in fact charges book authors for download size and halves your 30% for books over $10 (which is ridiculous given expensive books should have higher margins).
When has Google informed you that you can opt out of having ads shown next to your content in search results?
So, your analogy or comparison here unfortunately doesn't hold water.
It amazes me that no one saw this type of reaction from artists (and the generally pro-artist consumer base) coming when the overall business plan was created. And that the concession was made so quickly...
I think this is a bit too much of a bank shot to have been planned ahead of time, but nice work by Eddy Cue and Apple PR to acquire and then cash in this bargaining chip in probably the most effective way possible.
This isn't exactly a total take-down and I wouldn't be surprised if this was orchestrated. Even if it isn't. It's the kind of deep PR/Advertising that you rarely get the chance to pay for, let alone afford. And the cost of almost negligible in comparison. Even then, they have a "special" rate during those first three months.
Apple is a beast at making money.
I want to know "how much" they will be paying.
[1]: http://recode.net/2015/06/21/apple-says-it-will-pay-taylor-s...
Myself, I've never made enough off that one rap CD to recoup the cost of sending it to CD Baby, so I've got NO skin in this fight. :)
For a music streaming service, looking to recoup your lost royalties after almost 17 YEARS (and only getting 1.5% extra at that) is laughable.
The three months free period is intended to make the amount of paid customer bigger after the three months, so you have to account for that (and you don't). I don't know what is the predicted impact of the three months on the subscription numbers, but let's imagine you would have a two times faster market penetration. After a year you would have 3 months free and then 9 months with double amount royalties, compared to 12 months single royalties.
Number of users who will pay for Apple Music with no trial or a 1 month trial (as per Spotify, Rdio, et al) = x,
Number of users who would not pay for Apple Music with no trial but will after a 3 month free trial = 2x?
Doubtful. I think the order of magnitude in people for whom the three month trial is in the order of single digit percentages, at most (because I'm sure other music services have A/B tested this). "1 month vs 3 month trial" is not revolutionary nor out of left field, and I can guarantee if the there was a 100% increase in customer base by Spotify offering a three month trial, they would be doing that right now.
http://nextshark.com/an-open-response-to-taylor-swifts-rant-...
I want to have pictures taken of me during a performance. But I cannot take pictures of myself while performing. So I pay a photographer to take those pictures for me. They are my pictures. I don't care that you took them, I don't care WHO took them. They are mine because I paid you to take them for me.
Just like when an app developer makes an app on their own, they get to reap the rewards. If someone pays you to create an app for them, don't complain when it takes off and you don't get paid royalties on top of that. You also don't get to sell that app again on the side.
She isn't paying them.
This is for press photographers who want to go to her concert and take pictures of her performing.
The few people I know who have photographed a concert in some professional capacity have done so for someone else on a paid contract. Usually the performer or the venue... it's kind of like a wedding photographer in that sense (in my mind, at least) and I'd be appalled if a wedding photographer started making a fuss because he doesn't own the rights to the pictures.
Of course, if Swift (or the venue) is not paying the photographers (and she isn't), then clearly there must be some financial motivation for them to go do this anyways, at which point you gotta weigh the pros and cons of taking pictures you won't own the rights to...
That said, I'd expect to be thrown out more often than not if I started showing up to random weddings as an uninvited photographer. No one has to let me take pictures in their private space, but they might do so with terms attached.
You can take photos of a model you pick on a stage you create and then you get to write the rules. Or you can even take a photo of Taylor Swift in a public place like a street or airport without any permission or rights issues.
You just can't take photos inside her private, for profit, and expensive to produce stage show unless you agree to her terms. You also can't walk on to a movie set with your own video camera and have the rights to that footage either.
On what planet is this surprising or problematic?
Mostly that, no, photographers shouldn't be able to do whatever they want with photographs of Taylor Swift without her permission. That's how you ruin your brand image.
The entire argument was that they were demanding rights to use the photographer's work in the future for free. There was a non-commercial clause but its wording was a bit strange (is publicity for a brand like Taylor Swift ever non-commerical?)
Subscription service stuff is at the end.
I assume they will be changing this section: "Fees for Trials and Comp Accounts. For the sake of clarity, for Trial Users, and for Comp Accounts that ITUNES provides on a gratis basis, no license or royalty fees, including Fees, will be due to COMPANY."
Thanks, Apple.
Had the contracts they signed with the labels included paying royalties, they would be giving away a product far below cost for 3 months. Spotify and friends could file a complaint that this is anti-competitive behavior. It could be argued that Apple used its financial power to lose money for three months to thwart real competition in the market.
Amazon was accused of doing this will digital books by selling them all below cost, although ironically Apple was the one that got in trouble.
What happens now is unclear. Can Apple argue they didn’t intend to be anti-competitive from the beginning or will people go after them anyways. I suspect the latter is guaranteed.
The sooner every traditional media company goes out of business, the better the situation will be for everyone -- listeners and artists.
Of course not, they're worse as they gain more control. Best for customers and artists is good competition.
I presume you work for free?
I don't think Apple's negotiators are giving free puppies and flowers when they negotiate either.
Not sure if it sounds more cynical or stereotypical on my part, but I'd guess that there's a lot of overlap between Taylor Swift fans and Apple's target market. Good move in the long run for Apple, and in the short term they get to play it off like collaboration. I don't see it as anything but a disagreement between two juggernauts, The Taylor Swift Corporate Entertainment Empire Wordwide (TM) and Apple's Jimmy Iovene Music Experience (TM), but I'll take my pennies and keep on truckin'.
What I wonder is how do they prevent me from regging new account every 3 monthes? Why would I pay them a single cent if I can spend few minutes once a 3 months and listen to their library for free?
Taylor said herself that it wasn't about her, but about small artists trying to break through. I'd like to see her put her money where her mouth is, but hey, if it's all about money that's okay too, but she should own up to it instead of pretending like shes looking out for smaller artists.
edit: Why is so much focus on the celeb. anyway? Shouldn't we be focused on the fact Apple was willing to completely screw artists for 3 months?
By redistributing her income (only for the users first three months of course) she and other artists could really help the ones who are struggling, but hey, if it's all about money that's okay too, but she should own up to it instead of pretending like shes looking out for smaller artists.
Also, if revenue was diverted completely from top artists to everyone else, what reason would there be for any of those top artists to be there? (Other than as a loss-leader for live shows and a "giving back to the community" sort of charitable thing)
Either way I doubt Apple Music would take off if they told the top artists that they were going to full Robin Hood on them.
That's why they should do it. To get rid of the facade that this is about helping smaller artists and show people what artists really care about art and which ones care about money.
I'm personally offended by Swifts letter. I don't think she really cares about smaller artists, she was just using them to manipulate Apple.
We all know that Taylor will now get millions of free downloads and be compensated, meanwhile struggling artists will probably get pennies. Shes not helping anyone but her self.
It's not about subsidizing smaller artists; it's about not forcing artists to unilaterally eat Apple Music's loss-leading costs.