It is a much more attractive lure to get people to try out the service and likely to lead to a higher subscription conversion rate than a one month trial.
Everyone is worse off with a one month trial including the artists.
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Apple Not Coercing Indie Artists Into Apple Music Deals With iTunes Removal Threats
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It is a much more attractive lure to get people to try out the service and likely to lead to a higher subscription conversion rate than a one month trial.
Everyone is worse off with a one month trial including the artists.
They are not working for free. They are being compensated by receiving higher royalties than they would get from any other streaming service. It is a business deal. Artists too dumb to,understand how a free trial of a decent length along with more money for them can live in penniless ignorance.
Not sure where you're getting that artists will receive higher royalties under Apple Music...unless you're gonna compare it to Pandora which everyone knows pays the lowest in the industry.
Because they are using it to get people onto their service. Musicians don't need Apple right now - they have Spotify and all the other streaming services to go to. Apple, on the other hand, needs musicians to get its service off the ground. Therefore, Apple should pay them royalties, even though the company is making no money (but building a valuable user base) for 3 months. Plain and simple.
Despite the fact that I think Apple should front the bills on this free trial, I'm not sure I see how indie bands are going to go out of business. Apple Music doesn't exist yet, so they're not taking in money from Apple for that. I guess Beats is going to be shut down, but did the 300,000 or 400,000 of us on Beats really pay for all of these guys of whom I've never heard?
Spotify, Pandora, Rdio, etc. will all remain in existence and help these guys pay bills. iTunes purchases still exist. YouTube ads still exist. Concerts still exist. CD sales still exist.
So how is this Apple Music three-month trial going to kill these artists?
Spotify, Pandora, Rdio, etc. will all remain in existence and help these guys pay bills. iTunes purchases still exist. YouTube ads still exist. Concerts still exist. CD sales still exist.
So how is this Apple Music three-month trial going to kill these artists?
Theoretical loss of album sales and theoretical loss of streaming money from other sources?
Most people who think artists should work for free have no idea how business works.
It was probably an exaggeration. I don't think anyone's going out of business either. But as you said, Apple should still pay the royalties.
Depends how you see it.
You could reduce it to working for free.
Or it could be more like giving some free samples to one outlet which has massive potential to generate a long term revenue stream.
Again - a free trial or sample to lure people in is about the oldest marketing tricks in the book. If its good enough for everyone else, I don't see why it isn't good enough here.
Internships are a classic example of corporate exploitation of people who are not in a position to negotiate their working conditions. Not a good example for Apple to be following, but a good example of what Apple is doing here.
Yeah I don't get why some people think this means artists are working for free... They are not employed by apple. iTunes is a platform provided by apple so artist can sell their music using that. If they don't like the deal apple puts in front of them, then they can just sell the their music somewhere else. iTunes and Apple music is just like a window display of particular shop. And if apple is not making money for 3 month, then there is no reason for apple to pay the artists. Artists are forgetting that many people are not buying albums or tracks these days and instead they stream it. Some people also torrent them. Anyways they always welcome to go and sell their music on other platforms. better yet they can sell their music through their own website.
If musicians don't need Apple why aren't they pulling their music from iTunes in droves?
People keep acting like this situation isn't mutally benificial. Do you know what artist get out of this arrangement? A bigger potential streaming audience...more subscribers means more money for artists. Think about it, you've got millions upon millions of people with an apple device, that now has a streaming music service installed by default with three months for people to enjoy for free, warm up to the idea of paying a monthly fee for all the music they can listen to, and have a percentage convert over to paid subscriptions.
I can only see this being beneficial for the artists, and so can they and their labels. That's why you won't see a huge exedous from indie artist either....the more exposure for them, and the more people streaming their music, the better.
Well if you aren't on it, you will presumably not get suggested or put on a curated list. In fact if you opt out I assume that Apple can't legally use your music. I think the Indie's want to be on it, they just want to get paid for the assistance that their content will bring to build this new service. Frankly it is a very reasonable position. But Apple is trying to match its revenue from sales with the payments to the content providers. But Apple has chosen a long free trial period. Compare that to Beats which currently has a one-week trial period. Hmm. That is pretty different.
Yes, they can. In fact the artists really like selling their music on iTunes. They regularly comment that they make more money from this than from any (and possibly all combined) of the streaming services. However Apple is asking them to donate their content for three month's to Apple's new music venture. That is all that is going on here. Though also Apple is suggesting this is an "opt out" scenario, where silence (as in not replying to Apple) means you agree to donate your songs. This is a bit weird. I can't mail you an offer for your car and then write in the bottom of that mailing that if you don't reply and say "No", I get your car for free.
A better analogy would be if you had a car in a showroom somewhere that was for sale.
And the showroom was starting a new showroom membership scheme, with a free trial membership.
And they wrote to you asking if it was OK for them to make use of your car during that free trial membership, where members would be able to test drive the car for free.
There are several long running threads where people exchange information about how to get cheap gift cards. For a £50 gift card people pay usually between £37.50 and £42.50, from reputable stores. If I pay £37.50 to the store, then Apple isn't getting £50 but less than £37.50. And pays out £35.
So Apple doesn't _get_ 100% in the first place. And they pay for all the cost of running the site, storing and delivering the music, advertising, handling the money, and so on.
Your numbers are wrong. Either they pay .00521 dollars per streamed track, and not cents, or you would make $1.56 in three months, and not $156. 0.00521 cents per streamed track is about 1 cent for 200 tracks or 1 dollar for 20,000 tracks.
For a more fitting analogy you'd have to pay him in addition to his present salary for the same work he is already doing now.
They are not asking. They are telling. By a flipping email no less. Opt out, remember?
This isn't about payment, nor publicity, nor long term potential. This is about who is in control of the work artists produce and the terms under which it is offered.
That control should be with the artist and definitely not with Apple.
Interesting topic! People have made some good points on both sides of the argument. I have mixed feelings on it all.
Still, something doesn't feel right to me about Apple offering a whole three months free listening without paying the artists. It reminds me why I don't like the major supermarket chains here in Australia, who, amongst other practices, use their buying power to tell farmers and suppliers what the terms are, including so-called 'voluntary' marketing contributions. (See this article.) Apple's free trial has a similar ring to it. For a supermarket chain, it's all about getting people into the store. In the longterm, it's about market dominance (and in turn, even more buying power). 50% off an advertised product gets shoppers into the store. Will those shoppers become loyal to the product once they've sampled it—once it returns to the full price? Who knows? Who cares? Certainly not the supermarket. They only care about their own brand. For Apple, this is about getting people in, and dominating the online music industry again. It's about making Apple the world's preeminent music brand. Who cares if a few artists lose out along the way?
I hope artists don't lose out. I hope this is a great opportunity for indie artists to get heard, and to make good money for what they do. I guess time will tell.
I hadn't realised this was the case until I read your comment. When I heard the Apple Music announcement, I had naively assumed it would be the whole iTunes Store library… But I see there will be some pretty big holes in there. Apple can't be happy about that.
I agree. The consumer is certainly getting spoiled here. But as always, someone has to pay.
You've received a fair bit of stick for this analogy, but I thought it was okay (no analogy is perfect). If someone discovers some great new music soon after signing up, and they play it to death for the first month or so (and who hasn't done this at some time?), you have to wonder if that artist will see much if anything once the trial period is over.
Right. Despite what some commenters are saying, Apple Music needs musicians more than musicians need Apple Music. If the world's musicians united and said no to Apple Music, it would be nothing. However, Apple has evidently done enough to get the major labels on board, so that's not going to happen. One feels that Apple Music will have a huge number of trial members from day one, and all those starving artists will feel obliged to tag along on the scent of a prayer of the hope of getting noticed.
Apple, during the initial months, will be getting exactly what Apple wants—millions of subscribers who can't resist a great deal. The outcome for artists is a little harder to predict I think.
Haha! The analogy is far from perfect, but hey, it's not too far from the truth in some ways!
Thanks for sharing your perspective on this as an indie artist. I found it enjoyable and informative. I hope you're right!!
Still, something doesn't feel right to me about Apple offering a whole three months free listening without paying the artists. It reminds me why I don't like the major supermarket chains here in Australia, who, amongst other practices, use their buying power to tell farmers and suppliers what the terms are, including so-called 'voluntary' marketing contributions. (See this article.) Apple's free trial has a similar ring to it. For a supermarket chain, it's all about getting people into the store. In the longterm, it's about market dominance (and in turn, even more buying power). 50% off an advertised product gets shoppers into the store. Will those shoppers become loyal to the product once they've sampled it—once it returns to the full price? Who knows? Who cares? Certainly not the supermarket. They only care about their own brand. For Apple, this is about getting people in, and dominating the online music industry again. It's about making Apple the world's preeminent music brand. Who cares if a few artists lose out along the way?
I hope artists don't lose out. I hope this is a great opportunity for indie artists to get heard, and to make good money for what they do. I guess time will tell.
I hadn't realised this was the case until I read your comment. When I heard the Apple Music announcement, I had naively assumed it would be the whole iTunes Store library… But I see there will be some pretty big holes in there. Apple can't be happy about that.
I agree. The consumer is certainly getting spoiled here. But as always, someone has to pay.
You've received a fair bit of stick for this analogy, but I thought it was okay (no analogy is perfect). If someone discovers some great new music soon after signing up, and they play it to death for the first month or so (and who hasn't done this at some time?), you have to wonder if that artist will see much if anything once the trial period is over.
Right. Despite what some commenters are saying, Apple Music needs musicians more than musicians need Apple Music. If the world's musicians united and said no to Apple Music, it would be nothing. However, Apple has evidently done enough to get the major labels on board, so that's not going to happen. One feels that Apple Music will have a huge number of trial members from day one, and all those starving artists will feel obliged to tag along on the scent of a prayer of the hope of getting noticed.
Apple, during the initial months, will be getting exactly what Apple wants—millions of subscribers who can't resist a great deal. The outcome for artists is a little harder to predict I think.
Haha! The analogy is far from perfect, but hey, it's not too far from the truth in some ways!
Thanks for sharing your perspective on this as an indie artist. I found it enjoyable and informative. I hope you're right!!
Yes, we don't know anything about the contracts, but this bad resonance from the musicians indicates the big deal: Apple doesn't get paid and therefore doesn't want to pay the artist for 3 months.
This fact alone seems to bother the small artists and big labels, while the latter could afford the dry period anticipating the future profits, the former could or want not.
And that is exactly the point: they don't agree! Apple seems to "force" them by threatening with iTunes bans, which alone is far below the belt and leaves some bad taste. Imagine, if majority of indie artists would quit (or would be quit) from iTunes. What purpose would it be good for?
It will be interesting to see stats on the percent of songs played by paying subscribers compared to those played in a trial period. My guess is that after the startup period almost all the usage will be by paid subscribers.
Apple AND the labels will make no money for 3 months, Apple will actually lose money on Apple Music during those free months because there are costs associated with streaming music (data centers, bandwidth, employees to run the service, etc). The benefit to the labels is that Apple will pay them a higher percentage 71.5% vs 70% after the free trial. I'd have to bet that the extra 1.5% earned over their lifetime is more than what they would've earned in those 3 months. Apple hopes to get 100 million people worldwide signed up for Apple Music, it'd be stupid of these indie labels to not want to be a part of that. Also, who's to say that Spotify customers will stop paying for Spotify during their free trial with Apple Music?
Businesses worldwide give out "free samples" all of the time. Whether it's with software or services. Yes, 3 months is longer than usual but Spotify is doing 3 months for $0.99 so Apple has to compete. Spotify is NOT profitable, even with 20 million paying customers and 55 million FREE customers, supported by AD revenue. Apple has the ability to make this profitable for both the record labels and themselves. Apple has spent billions on Apple Music already (BEATS acquisition, building data centers, building the iOS app, negotiating deals, etc) and so they want to make sure they get people to sign-up and pay for the service.
Apple is not the evil corporation you think it is. They wanted something (3 months free) and gave something in return (an extra 1.5% paid in royalties). They'd be evil if they gave nothing in return. Apple has likely done a study and found out that people are more willing to pay for a service after a 3 month trial vs a 1 month trial. Having dual majored in Psychology and Business Administration, I can tell you that their findings are probably correct.
Just give Apple a chance to finally make streaming music work.
Businesses worldwide give out "free samples" all of the time. Whether it's with software or services. Yes, 3 months is longer than usual but Spotify is doing 3 months for $0.99 so Apple has to compete. Spotify is NOT profitable, even with 20 million paying customers and 55 million FREE customers, supported by AD revenue. Apple has the ability to make this profitable for both the record labels and themselves. Apple has spent billions on Apple Music already (BEATS acquisition, building data centers, building the iOS app, negotiating deals, etc) and so they want to make sure they get people to sign-up and pay for the service.
Apple is not the evil corporation you think it is. They wanted something (3 months free) and gave something in return (an extra 1.5% paid in royalties). They'd be evil if they gave nothing in return. Apple has likely done a study and found out that people are more willing to pay for a service after a 3 month trial vs a 1 month trial. Having dual majored in Psychology and Business Administration, I can tell you that their findings are probably correct.
Just give Apple a chance to finally make streaming music work.