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I still don't get why Apple pushed for a 3 month trial period instead of a 1 month trial.

If you use it for 30 days, you will know whether you want to keep it or not.

An extra 2 months of 'free-time' that Apple cannot collect revenue or pass onto labels and artists via royalties is completely superfluous and unnecessary.

Just change it back to 1 month and make everyone happier?

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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Why don't you come work for me for free for 3 months and then if I like you enough I'll start paying you.

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.
 
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.

Apple said it will pay music rights owners about 71.5% of revenue in the U.S. and about 73%, on average, for songs played abroad. That is largely in line with the payments by other music streaming services.

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.
 
Mountain out of a mole hill. Apple isn't making money from streaming during the trial period, why should it have to pay the artist or the label royalties during that period?

If indie artists have an issue with that, just don't jump on the streaming side.

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.
 
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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?
 
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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?

Theoretical loss of album sales and theoretical loss of streaming money from other sources?
 
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?
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.
 
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Most people who think artists should work for free have no idea how business works.

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.
 
No one enters an unpaid internship they don't find value in.
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.
 
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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.
 
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.

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.
 
I get that, but that will/might be the case regardless of wether their music is available in Apple Music. I think I would want to be on it, who knows if you get suggested or put in a curated playlist.

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.
 
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.

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.
 
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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.
 
And where is 93% coming from - I thought Apple were keeping in the region of 28-30%?


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.
 
If you do a little research... Spotify from 2012-2013 paid on average about .00521 cents per streamed track. So, let us say that I am a small independent artist who gets 10,000 streams per month on average.

That means on spotify, in three months, I would make $156.30. It is something I will give you that, but at $52.10 a month, I am more likely to make more on the exposure of being available rather than on how many times you clicked play that month.

Just sayin.. I think artists ought to be upset with streamed music in general, although it was started to try and get pirates back into paying something for legal music.

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.
 
Why don't you come work for me for free for 3 months and then if I like you enough I'll start paying you.

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.
 
Apple is not using copyrighted materials without permission. They're asking to use copyrighted materials at no charge. The labels and artists are being asked to sign a contract. If they sign, the new contract replaces the old one. If they don't sign, the old contract remains in effect. One artist reports Apple threatened to pull the old contract if they don't sign the new. Others report Apple has not done that (to them). Apple says they are not doing that. In the absence of proof, all we can do is believe who we want to believe.

There's a single contract that covers iTunes, iTunes in the Cloud, and iTunes Radio. The new contract adds Apple Music and Beats 1 to the old contract. As I read the contract, either Apple or the label/artist can cancel the existing contract at will. So if Apple wanted to threaten the labels, they could. If the labels wanted to walk, they could.

While it's possible the labels may pay something to their artists, there's a far, far stronger likelihood that the contracts between label and artist base royalties on how much the label is paid. If the label gets zero, the artist gets zero. Artists don't get paid when the labels send out promo and review copies, and this will almost undoubtedly be swept up under the same clause.

Apple can offer the same terms to anyone they want, and anyone, large label or indie, can decide whether to sign. It's not up to us to decide that the big kids should sign but the little kids should not. They're all grown-ups. The only "unilateral" about what Apple did was to decide that this would be the deal they offer, just like anyone who goes into a negotiation.

In the end, negotiating is always a matter of "who wants what, more." If the artists and labels feel they need Apple more than Apple needs any particular artist or label, then Apple has the upper hand. It's been that way since Jacob sold Esau a bowl of cereal.
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 can understand why some musicians, like The Beatles and Taylor Swift, don't wish to be party to this degradation.

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 still don't get why Apple pushed for a 3 month trial period instead of a 1 month trial.

If you use it for 30 days, you will know whether you want to keep it or not.

An extra 2 months of 'free-time' that Apple cannot collect revenue or pass onto labels and artists via royalties is completely superfluous and unnecessary.

I agree. The consumer is certainly getting spoiled here. But as always, someone has to pay.

Why don't you come work for me for free for 3 months and then if I like you enough I'll start paying you.

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.

It's great that Apple wants to offer three months free trial but why shouldn't the artists get paid? If not for their music (all artists/labels) there wouldn't be anything to listen to and the service would seem pretty bad.

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.

Mountain out of a mole hill. Apple isn't making money from streaming during the trial period, why should it have to pay the artist or the label royalties during that period?

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.

Exactly this. Apple wants to offer their customers something free from somebody else. Hey, want to borrow my neighbor's car? You can borrow it for FREE! That's because I'm a really really nice guy.

Haha! The analogy is far from perfect, but hey, it's not too far from the truth in some ways!

Anyway, to everyone else, since I am both a fairly unknown indie artist as well as an indie record label with music on the iTunes Music store, I have some actual insight into all of this. … It's definitely a win/win for any indie artist to opt in and not to worry about the 3 month trial. It's really not that big of a deal.

Thanks for sharing your perspective on this as an indie artist. I found it enjoyable and informative. I hope you're right!! :)
 
It's perfectly legal for Apple to _want_ to use and distribute someone's content. It is also perfectly legal for Apple to do it with permission of the copyright holder. Actually doing without permission is illegal.

We have no idea what contracts are actually in place. Back in the day when the iTunes Store was opened, Apple signed an identical contract with the major record companies, and offered that identical contract to all the independent record companies, explicitely saying that they wouldn't do any negotiations with any indie companies. Which to me made sense, because (a) negotiating a different contract would be time consuming, costly, and would cause trouble with any company getting less good conditions than another one, and (b) the indies would use the legal expertise and the negotiators of the big companies for free. I would assume that we have a similar situation today.

If there is a contract where the big record companies agreed that Apple can stream for three months without charging customers (which is good for the artists because their music is heard) and without paying the record companies or artists (which is bad for the artists because they get no money), then indies will not get a different contract. That's obvious. What isn't obvious and what we don't know is what happens if an indie doesn't like the contract. Whether theire iTunes record sale contract stays unchanged or not. Obviously if they don't accept the contract, they will not be part of the streaming.

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.

It's legal if the copyright holder agrees to it. Since they're bound by Apple's terms if they want to sell their music on iTunes, Apple could "force" (well, they could also quit iTunes) them to do it.

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?
 
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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.
 
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