Apple Reverses Course, Will Pay Artists During Apple Music Free Trial

[Rogifan]

I knew Apple would bend an do the right thing but why didn't they set out to do that right from the beginning? That would have been much better PR and show that Apple was really a class act.

Makes you wonder what Jimmy Iovine is good for. He of all people should have known this would be an issue and could become a PR nightmare. All those saying this makes Apple look like the good guy and gives more exposure to Apple Muisc are engaging in some massive spinning. The fact that Tim Cook had to get involved and on a Sunday says to me Cue/Iovine fumbled this and were scrambling at the last minute so it didn't snowball further into a real PR nightmare.

 

[Rogifan]

Whether we agree or disagree with the events that have taken place surrounding this matter, Swift has made a fundamental error in her judgement.

In her 'open letter' she claims that artists should not be asked to provide their work for free, and that Apple are not encouraged to give away free iPhones. While the latter is true; Apple do pay for all the costs incurred by the infrastructure, hosting, and delivery of the artists content. Apple invest in the platform on behalf of, yes themselves, but also the artists. If this cost is not shared, then it doesn't seem unreasonable to me that the '3 month trial' should serve as an investment in the platform, equally by the artists that will serve to generate them revenue in the long term.

I fear the cost of this grand act will be swiftly passed on to the consumer.

The motives behind this matter are not all of morality.

Are there infrastructure/hosting costs that are specific to Apple Music that Apple isn't already incurring with iTunes/iTunes Match/iTunes Radio?

 

[Benjamin Frost]

So you'll continue to steal. Great person you are.

I disagree.

I don't think theft should be praised.

 

[Kendo]

Eddie Cue and Apple look like real aholes. If you loved artists as you claim, you never would have attempted to screw them over like you did. What a bunch of disingenuous idiots. I'll stick with Spotify now.

Are you familiar with the concept of a free trial? It means that if 1,000,000 people sign up for a free trial, maybe 50,000 will continue to pay for it while the other 950,000 opt out. That means there are only 50,000 paying customers to spread profit to the music industry after the trial is over. But in this case, Apple has to pay for 1,000,000 people during the trial. It isn't really fair.

So all these artists will get payment as if Apple Music had 1,000,000 listeners for the first 3 months costing Apple a ton of money, when in reality they should only be getting 50,000 listeners worth of profit.

I don't subscribe to cable channels like Cinemax. There are like 300 million households with TV but the biggest cable channel, HBO only has like 15 million subscribers. But if HBO offered a free trial, you'd probably have 100 million people signed up. So Apple would be paying the equivalent of 100 million subscribers to the cable companies when they only deserve 15 million worth of profits.

 

[darcyf]

You compare a service that you receive and that you should rightfully pay for with a service that Apple wanted to receive without paying for it?

No. I'm being deliberately obtuse here since I've made clear in maybe a dozen or more posts how distinct I feel this issue is. Most comparisons fail miserably at trying to capture it.

In this case I'm expressing my disdain for the argument that won the debate: That because Apple can afford to do this, they should. If only we all had the PR power of a pop star celebrity.

 

[Nuvi]

Why does everyone actually go on about those "millions" that Taylor Swift or others artists make? People act like it's immoral for them to make so much money or like they are not entitled to an opinion on the music business, because they are rich.

Most major artists whine about something related to the music business. Swift was at least whining about the right thing, and she actually mentioned the not-so-wealthy artists in her rant.

Taylor Swift making millions is not immoral but Taylor Swift acting like she is defending the rights of poor indy artist is. Taylor Swift is the one to gain millions from enhanced streaming deals when small indy artist can get literally only few bucks more. I have no problem for any individual defending their rights but I have major problem when such fight is branded as "fight for the rights of poor artist" when in matter of fact the main beneficiary is Taylor Swift herself.

 

[Arran]

... that was obvious to everyone would receive a huge amount of backlash.

Hang on. If it was obvious to everyone (your words) how do you explain Apple's initial decision not to pay?

Are you saying Apple deliberately gave itself a black eye?

...that apple needs backlash to come to the "right" decision shows complacency.

Indeed it does. Or laziness? Or arrogance?

Or maybe Apple's taking bad advice now? I do sometimes wonder how well-aligned the recent new hires (aka "seasoned industry veterans") are with Apple's traditional brand values.

 

[Gasu E.]

Should have just paid them in the first place...

As if you never made a mistake, oh perfect one. At least Apple admitted it and corrected it quickly. How do you do on that score?

 

[TallManNY]

That's recording contracts for you - they are notorious for being grossly in the label's favour rather than the artist's.

Remember Prince taking his stand because Warner Bros owned the rights to his music?

Taylor's into her fifth Album and only 25/26 with momentum of having each Album sell more than the last. She is probably into her second recording contract (one that she negotiated from the position of being a star) at this point. And she might even be into her third. Big Machine also wants to get her next contract. They may own the current music, but they really want to own the future music as well. Swift seems like she is going to keep producing for years, maybe decades. So they really really have to keep her happy. I have no idea what percentage of Big Machine's revenue comes from Swift albums, but I'd guess it is a big enough chunk that she is actually the most influential person involved in the process.

 

[BigInDallas]

Music snobbery has no age limit, more likely.

Whatever else, 1989 is a fantastic pop album.

Fine it's a good pop album. Pop sucks

 

[Gasu E.]

First question was rhetorical.

On the internet, nothing is rhetorical.

 

[MentalFloss]

How does Apple look like ******s? Apple isn't making a penny during the free trial period either so it's a loss leader for both of them

Sure, but every Apple employee involved with Apple Music still would have received their regular salaries. The musicians were the only ones who were asked to give up a part of their income.

The problem: You are comparing Apple (a corporation) with the musicians (people).

They asked artists to come on board and take the risk with them and hopefully make money in the end while providing new avenues for them to interact with their fans etc.

Take the risk with them? You make it sound like it's a 50/50 distribution of risk. Where is the big risk for Apple? They have invested a few million Dollars into developing the infrastructure for the service. If the service fails, they lose the money. That loss is so minor compared to Apple's budget that it would not even get mentioned during Tim Cook's quarterly investor calls. Not the first time that Apple writes off a minor investment like that. The risk is much higher for the real people than for the corporation.

The only thing that happened is that Apple now pays money out of pocket to remove all risk for the artists because Taylor pitched a hissy fit and they decided it was worth the risk to potentially lose money in hopes of people liking the service.

Yes, just like they pay money out of pocket to remove all risk for their employees. There are a lot of people who contribute to this kind of service. Yet the musicians were the only contributors who were asked to take a financial hit.

I am trying to imagine how Tim Cook sends an email to Apple software developers involved with Apple Music, telling them: "Well, we're trying something great here, so you have to take a 30% pay cut for the next three months. If things work out well, you'll get a 1% pay raise afterwards." Seems bizarre? Hey, no, it's cool, it's just a loss leader for the employees.

In fact, perhaps that is how all companies should develop new products. Pay cuts across the board and back to normal pay with minor raises if the product catches on. A great way to remove even the last little bit of risk and liability from the shareholders! They'll be ecstatic! If the employees don't agree, you can accuse them of being short-sighted and not believing in the company vision!

It's like if I started a lawn company and asked you to come on board to be a part of it and an incentive for people to start using us every weekend was that our first cut was absolutely free. We are both hoping the they like us and use us, and if they do we both make money! I make a little more because I did the work to start the company, file the LLC, have business cards made and purchased all the equipment.

No, it's like you having a lawn company and making money each month, and then someone asks you to join their company and to provide your service for free for them for three months so that afterwards you can continue working through their company.

I just don't get how Apple looks like absolute ******s for creating a new service, giving people free trials and offering that to artists who can try it if they want, or not...

Yes, it's hard to understand what is so bad about giving away other people's work for free to promote your new service.

 

[TallManNY]

Having said all of this, this wouldn't have happened if she hadn't written that letter publicly. I guarantee it.



It absolutely is. Very catchy tunes.

I don't get why she's hated as much as she is. She's one of the very few that stands up to studios on the regular. She's extremely charitable. One of the few that actually writes songs anymore in the mainstream. She's an actual role model. You don't see her in the tabloids doing drugs and partying all the time. She voiced her concern and in doing that, she likely got some indie artists paid when they otherwise wouldn't.

Good on her.

Maybe you are right. But another big band like U2 or such could have written a similar letter. I think most people didn't agree with Apple's decision on this point.

As for Swift being hated. Well if you don't understand how it could be that a rich outspoken woman could be "hated" on the Internet, you haven't been paying attention. All rich, powerful women become polarizing figures. It is just plain old sexism and resentment of a women who can obviously not be controlled. Also, a vocal minority will always hate the current form of Pop Music. Nothing will ever be as good as the "real" music from when they were young. Just ignore that stuff.

 

[Paradoxally]

Hang on. If it was obvious to everyone (your words) how do you explain Apple's initial decision not to pay?

Are you saying Apple deliberately gave itself a black eye?

Honestly, it's not the first time Apple pulled PR stunts. It wasn't obvious to everyone, just people in the business. But if you think Taylor Swift changes the world in a day, especially a day, that's a little strange. They probably planned this for weeks in order to create some huge media hype and give Taylor/Apple/Apple Music even more publicity.

 

[Gasu E.]

If she doesn't then it's more the evidence that her letter wasn't about "standing up for the little guys" like she tried to make it seem.

Actually it means exactly the opposite of what you say. It would mean she spoke up for the little guy, even though she wasn't going to benefit herself.

BTW, I hate her music, but I'm not blinded by that-- Ms. Swift was exhibiting real leadership.

 

[Nuvi]

Whether we agree or disagree with the events that have taken place surrounding this matter, Swift has made a fundamental error in her judgement.

In her 'open letter' she claims that artists should not be asked to provide their work for free, and that Apple are not encouraged to give away free iPhones. While the latter is true; Apple do pay for all the costs incurred by the infrastructure, hosting, and delivery of the artists content. Apple invest in the platform on behalf of, yes themselves, but also the artists. If this cost is not shared, then it doesn't seem unreasonable to me that the '3 month trial' should serve as an investment in the platform, equally by the artists that will serve to generate them revenue in the long term.

I fear the cost of this grand act will be swiftly passed on to the consumer.

The fact remains, services such as Spotify are still loosing money. However, major labels own part of Spotify and it seems they are willing to comepensate so Spotify can push forwards. In case of Apple there are no labels directly investing money but it seems they are willing to invest in a form of extended free trials. However, even in this case Apple is paying all the streaming and infrastructure bills. So far there hasn't been a single profitable music streaming service. The only parties making profit are the labels and artists but it seems they want even more money. Talk about greed.

 

[MentalFloss]

So all these artists will get payment as if Apple Music had 1,000,000 listeners for the first 3 months costing Apple a ton of money, when in reality they should only be getting 50,000 listeners worth of profit.

If 1,000,000 people sign up to the trial, then Apple Music will have 1,000,000 listeners for the first three months. It's not an "as if" situation.

 

[Pablo90]

ahahahah all those people who kept bashing her saying "no one will listen to you", "they don't care about it" and so on...

it's just fair, that's it.

 

[Gasu E.]

Honestly, it's not the first time Apple pulled PR stunts. It wasn't obvious to everyone, just people in the business. But if you think Taylor Swift changes the world in a day, especially a day, that's a little strange. They probably planned this for weeks in order to create some huge media hype and give Taylor/Apple/Apple Music even more publicity.

It's an interesting theory; but knowing how big corporations work, I don't think so. It would have been too complex a plot with too high a likelihood of a PR disaster. And it came close-- it made all the major media and painted Apple as the exploitive corporate villain-- that's tough to erase. Corporations work hard to stay on message-- they would not have taken a risk like this.

 

[Benjamin Frost]

I knew Apple would bend an do the right thing but why didn't they set out to do that right from the beginning? That would have been much better PR and show that Apple was really a class act.

Apple have some experience with bending.

 

[TallManNY]

Everything about this Music launch so far has been tone deaf IMO. Just like the stupid idea to stick a U2 album in everyone's iTunes library. Really makes me wonder if the $3B for Jimmy Iovine and Trent Reznor was worth it.

Of course it wasn't worth it to buy J Iovine if you say it cost $3B. But seriously Beats makes plenty of money just on cash flow for the headphones to justify something close to the purchase price. Iovine is universally respected. But the guy can only get a meeting, he can't change the fact that deal still needs to get struck. And Apple won't get everything right. They never do. And Apple tends to do a bit worse in the social media aspects. But also some of Apple's mistakes are blown out of proportion in the media. They are considered huge problems and then in retrospect they look like blips.

Humanity is going through a gradual change from interacting with PC/Windows to Mobile/iOS. Some are skipping the PC/Windows step entirely. That's the ultimate story. Everything else is just noise.

 

[jclardy]

I'm sure the indie artists will appreciate it, but the Taylor Swifts, and Metallicas of the music world, let's not pretend it's for them.

Once Apple Music is up and running it won't really be a big deal, as you would have a sizable paying user base. The real issue is the initial launch - nobody would be getting paid for July, August or September, so if you are a big name and released an album during that time you stand to lose a ton of money from Apple Music. Especially for pop artists who's albums typically have a short shelf-life.

Now the question is - will Taylor put 1989 on Apple Music now...my guess is still no as she stands to make way more money from people buying physical albums.

 

[pithy]

How was Apple able to negotiate this in the first place? Don't the artists have any rights at all?

 

[ThunderSkunk]

A billion dollar teenybopper bimbo on a power trip tweets and one of Apples many minor oversights is corrected. Whoopee.

Maybe we can get another fashion model musician to tweet about fixing the Finder or cleaning up iOS.

 

[Daws001]

This is good for the artists but also for Apple. They've been getting a lot of publicity leading up to the launch of Apple Music and now they come out as a good guy.