Apple Confirms 71.5% Revenue Sharing for Apple Music, No Royalties During Trial Period

[MacRumors]

Apple vice president of iTunes content Robert Kondrk has confirmed to Re/code that the Cupertino-based company will share 71.5% of Apple Music revenue with music owners in the United States.

That number will be slightly higher outside of the United States, averaging around 73%, but Apple will pay no royalties during the three-month free trial period in return for paying a few percentage points extra.

"Apple won't pay music owners anything for the songs that are streamed during Apple Music's three-month trial period, a bone of contention with music labels during negotiations for the new service. But Kondrk says Apple's payouts are a few percentage points higher than the industry standard, in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial."

The payments will be primarily sent to record labels and publishers that own the rights to songs and their underlying compositions, meaning that the royalties will not necessarily line the pockets of musicians directly. Artists often have their own individual deals with the record label they are signed to, so their payouts are often dependant on the terms of their contracts.

Apple paying seven-tenths of every dollar to rights holders is the standard rate paid by other streaming music services such as market leader Spotify, although Apple Music may be more lucrative for record labels due to its absence of a free ad-supported tier. Spotify argues that Apple also offers free streaming music through iTunes Radio and its upcoming Beats 1 global radio station.

Apple Music was unveiled last week as an all-in-one streaming music service, live global radio station and social platform for artists to connect with fans. The subscription-based service will be available June 30 for $9.99 per month after a three-month free trial period for iPhone, iPad, iPod touch, Mac and PC. Apple TV and Android versions of the service will be available in the fall.

Article Link: Apple Confirms 71.5% Revenue Sharing for Apple Music, No Royalties During Trial Period

 

[LordQ]

Yeah yeah, like Tim said "everything's great", just release Apple Music already!

 

[crenz]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

 

[cmiller4642]

I bet The Beatles are going to hold out until October 1st

 

[hlfway2anywhere]

I'm sure a lot of people will have opinions about the unpaid trial, but as a musician myself, I'd rather give Apple Music users 3 free months of my music with higher payouts indefinitely after the trial than have my music on other streaming services with lower payouts all around. its my understanding that as an artist or label, if you don't like it, you're free to distribute your music elsewhere.

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

Please don't buy Apple Music. Buy all of the music you listen to and do not 'pirate' music and you will be doing a huge favor to the artists you support.

 

[ugahairydawgs]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

If there's no revenue coming there are no funds to pay out to the artist. It would be different if Apple was running ads during this the trial periods, but they aren't.

 

[AngerDanger]

Here's to hoping they put some of that 71.5% to designing more icons with white backgrounds.

 

[LucasEVille]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

Pay for the yearly package straight off the bat then?

 

[BillyBobBongo]

The payments will be primarily sent to record labels and publishers that own the rights to songs and their underlying compositions, meaning that the royalties will not necessarily line the pockets of musicians directly.

Please don't buy Apple Music. Buy all of the music you listen to and do not 'pirate' music and you will be doing a huge favor to the artists you support.

Go to gigs, that's how you can support artists.

 

[2457282]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

I think that this means that when you are not paying the subscription, Apple does not pay the label. You can start paying early and ensure that the artist get paid sooner. Another key point is that this is not just now but will be true next year. For example, if someone wants to try out Apple Music starting in 2017, they can signup for a 3 month free trial. At some point they would have to start paying to use the app.

I dont see this as a bad thing, especially when this was negotiated that Apple pays higher royalties for paid subscribers to compensate for the free trial period. On the face of it, it seems like an equitable solution.

 

[cmiller4642]

A lot of the artists have probably been paid royalties from Beats Music anyway for the year. Those deals are yearly aren't they?

 

[Apple_Robert]

Three month free trial is a very generous offering. Count me in for the trial.

 

[mdellepi]

Still waiting some info as regards non-US launch!
The fact that all Apple sites outside US are still writing a general "Coming soon" message, without date or prices is starting to worry me...

 

[LucasEVille]

I really don't understand the issue regarding royalties during the first three months. The only artists that will suffer are the flash in the pan manufactured artists fresh off the cookie cutter record label assembly line who release a top 10 song. I listen to my favorite music often and just as much as when they were first released. Since I will keep listening to those tracks it will continue to trickle money in the direction of the artist instead of a one off album buy.

 

[Thunderhawks]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

And other companies' one month trial does the same, but Apple pays a higher percentage to make up for that.
You viewpoint is shortsighted.
If the free 3 months trial generates a lot of extra subscribers , then the payout is obviously greater and in the end the artists get more money (depending on their deals)

 

[Khaaaaaaaaaan]

I'm certainly very interested in their service. If it's anything close to Spotify's, I'm in. And if their subscription doesn't require you to cancel and re-subscribe in order to downgrade like say from a Family plan to a Personal one, I'm absolutely in. If you're going to offer tiered plans, please make the change as smooth for your customer as possible. Just saying...

 

[Oletros]

And other companies' one month trial does the same,

Which ones?

 

[FightTheFuture]

I will not buy Apple Music. I simply do not want to support such a business model.

Keep in mind Apple does pay royalties for Beats 1 and iTunes Radio, which is ad supported like Spotify and Pandora:

"Prince points out that Apple offers its own free music via its iTunes Radio service, and will offer more via the Beats 1 radio service that it’ll launch alongside its paid service; Apple will pay music owners a much lower fee for music streamed on those options, which don’t allow them to call up songs on-demand."​

 

[citysnaps]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

Then do your duty and make a personal choice to not use the trial period and simply sign up with a subscription on day one.

 

[Quu]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

haha what?

 

[nando87]

I won't even try it because we already know it won't be for free and I appreciate my money. I wouldn't pay it even if it costs 1$ per month. I'll stick with my free Spotify account.

 

[StevieD100]

Go to gigs, that's how you can support artists.

Sadly most of the Music I listen to was made by Artists who are no longer with us.
I have bought all the Music I want to listen to so there really is not need for me to sign up to this or any other streaming service. Besides, I am a stingy and grumpy old codger who hates paying to stream something AND pay again for the bandwidth to get it to my device.

 

[Oletros]

A good compromise, Apple pays a little more every month and the music owners can recoup the free amount long term

 

[Chupa Chupa]

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry.

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

I'm not a fan of Apple Music and won't be a member but that's because I'm damned cheap when it comes to things like this. I want to "own" my music, not rent it.

But your comments are rather shallow. Apple is not making any money in this period either, nor are the music labels, so they are taking risk too. There are no free riders. Each player is taking some kind of risk and assuming a cost. The .99 trial doesn't even begin to cover Apple's cost of running the servers and promoting the servers. Even users have to pay-in. Not much, but something and then they have to actively cancel.

Ultimately, if Apple establishes Music as the industry leader it works out better for artists because it will force out "free" options and generate more revenue which artists might share in if they had a good lawyer negotiating (assuming they had some kind of leverage, i.e., are popular or talented -- not necessarily the same thing). The service also gives new artists valuable exposure to a wide audience they otherwise would not have received.

 

[bushido]

haha yet Taylor Swift is part of this while leaving Spotify for that very reason. hypocrite