Apple Music Royalties During Free Trial May be Lower Than Expected

[TruthWatcher412]

If the artists don't like this why not just opt out until the free trial is over, their music is still for sell on iTunes. I don't see how they're losing money, does it cost them money for their music to be played? And it'll still be getting revenue from all of the other streaming services while Apple is doing the free trial.

 

[Karma*Police]

It's Apple's decision to have a free trial, not the artist's, so why doesn't Apple deal with it? If Tesco gives you free Kit Kats as part of a promotion, then they don't automatically expect Kit Kat to give them for free to Tesco. If you get a free 1 month trial of Photoshop, that doesn't mean the developers don't get paid for a month, it means Adobe figures it out from their own stock of money.

But it's not Apple's sole decision. The labels have to agree and as TS and others have shown, artists can opt out. The entire music industry is hurting and if Apple can convince the masses to switch to a paid subscription model, everyone benefits, which is why many labels agreed to it in the first place. Apple is bearing a lot of the risk by pouring billions into this project. The music industry should do their part if they want to save their own arses.

This whole thing is such a sham because as Billy Corgan pointed out, this has little to do with indies and everything to do with big artists and labels... The ones who will actually "suffer" during the free trial. The sad part is, their negotiating tactic to sway public opinion using a specious argument about protecting the poor starving artist worked.

 

[Zxxv]

And I bet it took you three weeks to think up that comment and write it.

Do you see what I did there?

Not 3 weeks. Im not small time Indie I'm talented see what I did there? this game is fun

 

[bernuli]

Not the same thing. If apple were giving away physical goods, i.e. cds, records or tapes then your argument would hold some weight as the physical goods need to be manufactured. No one is working for free in the music streaming rights. The songs have already been made and no physical goods are being given away.

When radio stations have commercial free segments, they still pay royalties. Sometimes when new stations start up they go commercial free for days and pay royalties.

That is the same thing I think.

 

[Zxxv]

Does the same argument hold true for software then? I should get everything on the App Store for free because it's already been coded, so the fact that I want it, and no physical goods are being manufactured means I should get it free?

Apple doesn't run a free trial on the app store. Maybe you could pitch it to them.

 

[2457282]

I see several scenarios that are conflicting here.

1. Artist want to get paid for their work. Failure to get paid, their option is to withhold their works from services like spotify and Apple Music (a la Swift.

2. Indie artist need to get noticed to make a name for themselves so they can sell more albums, concert tickets, etc. Failure to participate in streaming services reduces their exposure and could cost them significantly.

3. There is no guarantee and even with exposure, the artist does not connect with an audience and cannot sell album or tickets. Here is where the three months free hurts the most. After 3 months even the paying subscribers are not listening to an artist so any chance of making money is gone.

How to reconcile? Make Apple pay and address all three. Or don't pay and have artist take the risk on whether the exposure creates enough demand to make up for it later. Clearly the indies and new artist are not betting on themselves by asking Apple to pay. But that is part of the reality - there are too many artist out there and even the good ones get lost in the noise, so it really is risky.

Eddie, my cuban compatriot, give them a break and pay the artists. After the initial three months of this service, you should have enough revenue stream to cover for the on-going free trials.

Edit: From Apple's perspective, the question is how to figure out what to pay. By this I mean that with paying subscribers, it takes 71% and spreads this amongst the labels. But 71% of 0 for three months is still zero. So they will need to get a little creative. Could be take the total number of free trials and give $6 to the labels for each one.

 

[Gasu E.]

I thought they got paid via a few ways?

They sell a cd/record/tape/digital download based off of people listening to their music on apple music and wanting a copy.

They sell tickets to their gigs based off of people listening to their music on apple music and wanting to see them live.

They sell merch based off of people listening to their music on apple music and wanting some physical goods.

They get higher pay rates/returns than any other streaming service when the apple music 3 month trial is over.

The whole point the artists are making is that streaming competes with selling "cd/record/tape/digital download". It's a significant portion of their expected revenue stream. What if someone told you that they decided you were going to get paid 25% less for the same amount of work? For some people, it would drive them out of the business if a new streaming service cut into their revenue.

 

[Zxxv]

When radio stations have commercial free segments, they still pay royalties. Sometimes when new stations start up they go commercial free for days and pay royalties.

That is the same thing I think.

I have no idea if radio rights are the same as online streaming. Isnt that some of the who ha with old school broadcast ways moving into the modern age?

 

[please22]

Apple regrets their decision to open source Swift already.

Umm...no, I'm pretty sure its a good thing all programmers get a go at Swift now.

 

[Zxxv]

The whole point the artists are making is that streaming competes with selling "cd/record/tape/digital download". It's a significant portion of their expected revenue stream. What if someone told you that they decided you were going to get paid 25% less for the same amount of work? For some people, it would drive them out of the business if a new streaming service cut into their revenue.

Im not interesting in paying to be advertised to i.e. streaming. So I just buy music I like when I hear it or someone recommends it.
So they can leave me out of their calculations.
ps... im not alone in this view point.

 

[milo]

It's easy to spend money that isn't yours...

That's a funny thing to say considering apple wants to give away free product that isn't theirs.

 

[London Lad]

I would tell the 'artists' to to like it or lump it. Lets face it there will be next to no CD, record or tape sales in a few years time and if they want to alienate Apple they will ultimately regret it. Also most artists don't do well for that long so there will be a whole new crop available soon.

 

[teslo]

great pic on the article.. +1

 

[Zxxv]

If the artists don't like this why not just opt out until the free trial is over, their music is still for sell on iTunes. I don't see how they're losing money, does it cost them money for their music to be played? And it'll still be getting revenue from all of the other streaming services while Apple is doing the free trial.

I think how it works is i sign up next month. For 3 months all the music I listen to does not pay royalties.

You sign up next year. All the music you listen to for 3 months does not pay royalties.

So there is no way to opt out for the artists.

Or is the 3 month trial only when apple music kicks off?

 

[Poisednoise]

Apple doesn't run a free trial on the app store. Maybe you could pitch it to them.

I'm afraid I don't understand your response. Your argument is that if something pre-exists, and no actual physical manufacturing is required, then it should be free to all users.

By extension, you're arguing that the cost of a product should only cover the cost of the manufacture, as that is what determines whether it's free or not. If it's not physical, then it's free. You're essentially arguing against royalties of any sort. You're arguing against Apple factoring in the cost of design of its hardware. You're arguing against any reward for anyone doing anything other than manufacturing.

That's a fairly major societal shift, and one which reductio ad absurdum keeps us locked in the stone age. Without anyone to design something, there won't be anything being made either.

 

[Zxxv]

I'm afraid I don't understand your response. Your argument is that if something pre-exists, and no actual physical manufacturing is required, then it should be free to all users.

By extension, you're arguing that the cost of a product should only cover the cost of the manufacture, as that is what determines whether it's free or not. If it's not physical, then it's free. You're essentially arguing against royalties of any sort. You're arguing against Apple factoring in the cost of design of its hardware. You're arguing against any reward for anyone doing anything other than manufacturing.

That's a fairly major societal shift, and one which reductio ad absurdum keeps us locked in the stone age. Without anyone to design something, there won't be anything being made either.

Im "arguing" / discussing within the limits of the discussion. You took it outside so my reply or stance appears to you, to have changed.

 

[WrQth]

That's a funny thing to say considering apple wants to give away free product that isn't theirs.

If they have permission to do so why can't they? The big labels don't seem to mind and it's not likely just because they have deeper pockets but rather because they see the long term benefit.

 

[Poisednoise]

Im "arguing" / discussing within the limits of the discussion. You took it outside so my reply or stance appears to you, to have changed.

I'm sorry, I misunderstood.

So your argument is therefore that musicians shouldn't be paid for their "design" work, but that this only applies to musicians, for no particular specified reason, other than that you personally feel it's fair to discriminate. Alright, well that's just such a bizarre stance that I don't know where to start. So I won't.

 

[Nyguy76]

When radio stations have commercial free segments, they still pay royalties. Sometimes when new stations start up they go commercial free for days and pay royalties.

That is the same thing I think.

Radio only pays royalties to songwriters. Most of the real popular pop artists don't write their music so they get nothing from radio play.

 

[Jason83]

Do NOT piss off Taylor Swift!

Oh no will she break up with me?

 

[jamesjingyi]

It's Apple's decision to have a free trial, not the artist's, so why doesn't Apple deal with it? If Tesco gives you free Kit Kats as part of a promotion, then they don't automatically expect Kit Kat to give them for free to Tesco. If you get a free 1 month trial of Photoshop, that doesn't mean the developers don't get paid for a month, it means Adobe figures it out from their own stock of money.

Actually in major retailers like Tesco, Asda and Sainsbury's, if they decide to do a promotion, they often screw over the suppliers, making sure that they still make plenty of profit. It is usually the suppliers that suffer. However, Apple isn't a retailer, its providing a service so it shouldn't be taking hints from other areas of business, just work out something good at the start.

 

[Jason83]

Seriously though- I don't understand the three month trial- you can test it out in a week- why the long free trial?

People have been in the existing services like Spotify for years. You give someone a week to try Apple Music, they'll go back to Spotify. You let them in for three months, you got them hooked and their playlists and whatnot are set up. This is THE way to get people to make the switch.

 

[dZp]

Why don't people (who feel so strongly about Apple not paying royalties during the 3 months trial) simply sign up and pay as soon as iTunes Music goes live, instead of you know... using the service for free. This way the artists get their fair share.
Oh I get it now... people don't want to pay!

 

[Jason83]

I work in music, I also agree that Apple needs to pay artists something during this trial. They're too big not to, for smaller labels and indie artists it would be a tremendous burden to not bring in revenue for 3 months.

Still, there's no way to make everybody happy here. Streaming payouts are based on a revenue sharing model--not a predetermined royalty fee. So with no revenue coming in, and no way to know which free users will eventually pay up, the amount Apple pays will have to come out of thin air.

Artists would be very smart to take advantage of Connect during this time--push out links to merch, concert tickets and vinyl versions of their music to the hopefully increased number of people discovering music over the first 90 days.

This is one of the most well thought out takes I've seen on this whole thing. Small artists can use Connect and can basically piggyback on Apple's notoriety to advertise to a massive audience!

 

[tasset]

Why don't people (who feel so strongly about Apple not paying royalties during the 3 months trial) simply sign up and pay as soon as iTunes Music goes live, instead of you know... using the service for free. This way the artists get their fair share.
Oh I get it now... people don't want to pay!

Correct, people don't want to pay hence the 3 MONTHS. Apple knows consumer psychology better than anybody, and knows that if the music industry wants to turn nonpaying customers into paying customers they stand a better chance with a longer trial period. Apple just naively thought the artists would sack up and live lean for a couple months, that's their bad.