Apple's New Music Royalty Proposal Would Make Streaming Costlier for Free Services Like Spotify

[Michael Goff]

Apple can change policies any time they want. In fact they changed policies right now at WWDC. If they truly cared about artists they wouldn't get 30% cut from streaming services like Spotify, Pandora, etc. Period. This latest attempt by Apple to change pricing is not to serve artists, it's to manipulate the competition to serve Apple's own interests. And that's my only point in this thread.

That's ridiculous. Apple's cut is not taking away from what artists make, Spotify charges people who sub through the app 30% more to make up for it. Don't be a blind hater.
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Also what people fail to mention is that a service such as YouTube really help artists/bands get a lot of exposure. This exposure is worth more than getting a little bit more in royalties. Though YouTube does pay royalties fair and square.

I'm sure their landlords will accept exposure for their bills, right?

 

[mantan]

If you like a music service, pay for it. Too many people now think that they are entitled to free stuff.

I would go one step further and say that many people (especially millennials) think they are entitled to free/cheap entertainment.

My 18 year old daughter and many people of her generation feel that 'free/cheap/ streaming music and free/cheap streaming video actually covers the cost the entertainment. In her mind, when she graduates college all she wants is a Netflix app and to stream from network/entertainment websites. The idea of paying to download albums or pay for a cable/satellite subscription seems pointless because 'everything out there is free/cheap.'

It's fine now when you have people willing to pay high prices to see concerts or pay cable/satellite fees that's the primary source of income for cable networks...but at some point you have to put something in the pot....

 

[Rogifan]

As to Siri, why should Apple allow Spotify to use this? So in addition to you wanting Apple to allow freeloaders like Spotify to make purchases through in-App without taking their usual cut, Apple should ALSO allow other companies full access to their key features as well? Unbelievable.

Last time I checked Apple announced a Siri API at WWDC so they are allowing 3rd parties access to a key feature. We all know why it doesn't include music. The way for Apple to get 15M music subscribers is to bake Apple Music into the native Music app that's installed on every iOS device and keep a feature like Siri as Apple Music only. So consumers get the benefit of Siri only if they're using native apps or where it doesn't compete with an Apple service.

 

[trifid]

That's ridiculous. Apple's cut is not taking away from what artists make, Spotify charges people who sub through the app 30% more to make up for it. Don't be a blind hater.
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I'm sure their landlords will accept exposure for their bills, right?

Don't be a blind lover

 

[Michael Goff]

Don't be a blind lover

Except I don't love Apple. They're a company. Why love a company? They're just not wrong here and they're not taking money from artists.

 

[Deuce on the Clock]

Apple made this proposal for their own well being and theyre entitled to do so because theyre a business. It still wont make Apple Music any better.

 

[MH01]

All the naysayers on MR should start their own technology company. You clearly are more capable than Apple. I'm not saying Apple can't be criticised, it's the incessant pissing and moaning in every post that gets me.

Do the apologists get to start their own tech company too ? anyone with negative thoughts gets fired !!

I just glad we have posters like your self that moan about the moaning on every post. Adds value, and never get old

 

[HopefulHumanist]

Apple can change policies any time they want. In fact they changed policies right now at WWDC. If they truly cared about artists they wouldn't get 30% cut from streaming services like Spotify, Pandora, etc. Period. This latest attempt by Apple to change pricing is not to serve artists, it's to manipulate the competition to serve Apple's own interests. And that's my only point in this thread.

You seem to be operating under the assumption that if Apple did not take a percentage of Spotify's revenue generated by Apple's App Store, that somehow that money would be paid to artists and/or labels. I don't see how that is the case; do you have any reason to believe that or evidence to support that argument?

 

[GoodWatch]

I use the most cost friendly form of streaming there is: FM Radio in my car! Or DAB. As for Apple; embrace, kill and bury the competition. 200 billion in the bank means that you can hold your breath for a long, long time. Apple wants to dominate not only the delivery platform but the content as well. That 1984 commercial is turning into the apogee of irony now, don't you think?

 

[trifid]

You seem to be operating under the assumption that if Apple did not take a percentage of Spotify's revenue generated by Apple's App Store, that somehow that money would be paid to artists and/or labels. I don't see how that is the case; do you have any reason to believe that or evidence to support that argument?

Please answer something for me, why is Apple seeking 9.1 cents from 100 plays, is it to sorely to benefit artists? If so, if they truly cared about recognizing an artist's efforts, why are they taking a 30% cut which is unprecedented outside of iOS (on Mac they take 0). If Apple cared so much to make a proposal to the government, why wouldn't they change music streaming policies on the iOS app store to benefit the artists?

 

[Michael Goff]

Please answer something for me, why is Apple seeking 9.1 cents from 100 plays, is it to sorely to benefit artists? If so, if they truly cared about recognizing an artist's efforts, why are they taking a 30% cut which is unprecedented outside of iOS (on Mac they take 0). If Apple cared so much to make a proposal to the government, why wouldn't they change music streaming policies on the iOS app store to benefit the artists?

Even if they took 0, the money wouldn't go to the artists. How would changing the policy benefit artists?

 

[trifid]

Even if they took 0, the money wouldn't go to the artists. How would changing the policy benefit artists?

Huge potential benefit to artists, because suddenly Spotify would become 30% cheaper on the app store, potentially a lot more customers would find it alluring enough to subscribe, which in turns generates more paying customers that leave the free tier.

Don't believe me? Check out the effects of increasing Netflix subscription by $1-$2, it made thousands of subscribers to drop service. Go, Google it.

Edit: Netflix has around 45 millions subscribers in the US, their price hike was estimated to cause 3 to 4% drop in subscribers which turns out to be 1-2 million lost subscriptions. Imagine a 30% drop in music streaming prices in the app store, it could potentially mean a lot more subscribers and more money going to artists rather than Apple.

 

[Michael Goff]

Huge potential benefit to artists, because suddenly Spotify would become 30% cheaper on the app store, potentially a lot more customers would find it alluring enough to subscribe, which in turns generates more paying customers that leave the free tier.

Don't believe me? Check out the effects of increasing Netflix subscription by $1-$2, it made thousands of subscribers to drop service. Go, Google it.

Edit: Netflix has around 45 millions subscribers in the US, their price hike was estimated to cause 3 to 4% drop in subscribers which turns out to be 1-2 million lost subscriptions. Imagine a 30% drop in music streaming prices in the app store, it could potentially mean a lot more subscribers and more money going to artists rather than Apple.

So only theoretical benefit to artists.

 

[CarlJ]

If Apple cared so much to make a proposal to the government, why wouldn't they change music streaming policies on the iOS app store to benefit the artists?

Apple doesn't have "music streaming policies on the iOS app store". They have App Store policies that apply to all apps equally, including how they charge for in-app subscriptions. Apple is extremely upfront about, "if you want your app in our store, here's how much it costs."

Spotify looked at that pricing structure and decided to build an app and put it it Apple's App Store, knowing full well how the money would work out, and how much they would have to split between themselves and the music labels. Spotify decided to go forward with that, Apple didn't point a gun at them and demand they make an iOS app. Now you're showing concern for the artists and arguing that in order for more money to go to the artists, Apple should cut their published rates, because, what, Spotify is some sort of charity? Spotify didn't submit their app to the store under the special music streaming app rules, because there are no special music streaming app rules.

If you can't make a business model work, it isn't Apple's responsibility to magically make it viable for you. And this whole article is about Apple submitting a proposal to make things better for the artists in a very real and measurable way (and the rules would apply to Apple too, and other entities are free to also submit proposals). If that isn't beneficial for Spotify, too bad.
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So only theoretical benefit to artists.

Oh, I'm sure that Spotify has publicly promised that any additional money gained by Apple giving them Apple's share would be passed directly to the artists, rather than going to prop up Spotify.

 

[trifid]

Apple doesn't have "music streaming policies on the iOS app store". They have App Store policies that apply to all apps equally, including how they charge for in-app subscriptions. Apple is extremely upfront about, "if you want your app in our store, here's how much it costs."

Spotify looked at that pricing structure and decided to build an app and put it it Apple's App Store, knowing full well how the money would work out, and how much they would have to split between themselves and the music labels. Spotify decided to go forward with that, Apple didn't point a gun at them and demand they make an iOS app. Now you're showing concern for the artists and arguing that in order for more money to go to the artists, Apple should cut their published rates, because, what, Spotify is some sort of charity? Spotify didn't submit their app to the store under the special music streaming app rules, because there are no special music streaming app rules.

If you can't make a business model work, it isn't Apple's responsibility to magically make it viable for you. And this whole article is about Apple submitting a proposal to make things better for the artists in a very real and measurable way (and the rules would apply to Apple too, and other entities are free to also submit proposals). If that isn't beneficial for Spotify, too bad.

No you are wrong, policies don't apply to all apps equally, Apple has recently made a differentiation between single purchase apps and subscription apps (single purchase apps are 30% but subscription apps are 15% after the first year). This validates the notion that the policies were fine in 2008 for single purchase apps (a time when subscription apps didn't exist), but as technology evolves, and streaming/subscription services become more prominent, updated or new policies are needed.

So please, don't claim or act like Apple sets the app store policies in stone and they can't react to customer or industry demand, particularly when half of the top grossing apps in the app store are streaming apps.

 

[4jasontv]

You are conflating "I was exposed to something without my paying cash for it" with "that item has zero cost". They are not equivalent.

I never said it had no cost. I said it had no value. It isn't worth anything because there is so much product being distributed. So instead of selling the experience of the music, which is what used to occur when you had to go see a band play to hear them, now they sell control over when you can hear what music. This started with the radio, using airtime to sell albums and concert tickets, to today having free streaming accounts that make you pay to skip or select the next song. This is the music industries progression, not mine. Not yours.

Your original statement:

You claimed someone is invading your home. Note "they" indicating an action taken by someone not you, and "invade" meaning to forcefully enter a place without permission and against the will of the rightful occupants.

Actually invade simply means to spread into. It doesn't require force. It also doesn't require the physical presence of a person. An idea or message can invade. In this case they instead of selling me music and allowing me to do as I please, they want to have access to how I use the music in my own home. Maybe invade isn't strong enough of a word.

Now you say you didn't mean it literally. Okay if it isn't someone literally breaking down your door, then what can you mean?

See above.

Is there a music industry truck parked right in front of your home with giant PA speakers pointed directly at your door blaring music that you didn't approve at you? (That would be pretty clearly a case of them invading your home with music - and this would also be a situation where you should call the police). You're putting the blame on "them", implying the producers or distributors of the music, so clearly you can't have played any part in the invasion, like turning on a radio or a television, or opening an app or website.

Actually, yes, there is a truck outside blaring music. But it's a neighbor listening to the radio. Music on the radio is an ad for marketing control of their noise. Yes - I do think we should be able to travel in public areas without being overtaken by music. And yes, I leave stores if I find it to unbearable. The thing is, stores try to use music to entice you to shop, and I get control by deciding if I want to leave or stay. But that's not really the point here. The point is that by allowing this practice the music industry has said that they don't care how often you hear a song. If you want more control over the experience you have to pay money. Not for the music. For the control of the music. Note the difference.

Because if that were the case, that would be YOU inviting music into your home and then blaming someone else for that music being present, somehow considering yourself the victim. Poor you. You are causing music to be played in your home and then complaining that you don't like that music. Turn off the radio/TV/computer.

Nope. I am saying that I am willing to pay what they decided the music was worth. Nothing.

It sounds a lot like you are twisting the fact that you heard music through your own actions in your home into "they owe me something", in order to justify your actions. I merely pointed out that you were claiming something completely outrageous, in order to make yourself feel entitled.

I think that people who produce noise pollution are no different than people who burn coal. If they want to start charging for the music again, I am all for it, but I am not going to pay for the music and then again for control over it.

 

[Mindbomb2000]

Apple shouldn't even be getting 15%. They don't host this content or have anything to do with its creation or marketing of it.

Walmart doesn't create or market the toaster I bought from them. Yet, they did get a % of what I paid. Why? because it was purchased from their store.

 

[threesixty360]

That logic doesn't apply to China or Chinese. Chinese ISP don't care about IP and the Chinese government barely bats an eye at IP theft or anything of the sort. Honestly though, it doesn't make a difference for Western businesses. English streaming services are a joke in China, and Chinese streaming services carry ****** English movies. And like the guy says, no Chinese person is going to pay the money Western movie studios demand. So, basically, Chinese are going to pirate English movies, TV shows, and songs, because Chinese government doesn't care, and Chinese themselves aren't going to pay more than a dollar or two at most for a movie, which Western artists will never agree to.

I dont think any content maker in the western world factors in the Chinese market place. Markets for western music and film exist purely because of western demand and subsequent payments from western customers. Modern entertainment products only exist in the west because of strong copyright and ip laws which are heavily enforced. On the whole content companies don't care about regions they don't respect copyright.

 

[Gasu E.]

Please answer something for me, why is Apple seeking 9.1 cents from 100 plays, is it to sorely to benefit artists? If so, if they truly cared about recognizing an artist's efforts, why are they taking a 30% cut which is unprecedented outside of iOS (on Mac they take 0). If Apple cared so much to make a proposal to the government, why wouldn't they change music streaming policies on the iOS app store to benefit the artists?

OK, since you ask politely, I'll answer. Apple's cut comes out of the record labels' share. It has nothing to do with artist's royalties, which are set separately.

 

[sudo1996]

Because........ it involves Copyrights. not some big government conspiracy.

Not sure if I was clear, but I was referring to the royalties only, not the copyrights. Yeah, the government needs to protect IP. Whose business is it what percentage the artists are paid?

I never said anything about a government conspiracy, just that unnecessary laws like these invite companies like Apple to try unfairly hurting competition through the courts.

 

[AppleScruff1]

I use the most cost friendly form of streaming there is: FM Radio in my car! Or DAB. As for Apple; embrace, kill and bury the competition. 200 billion in the bank means that you can hold your breath for a long, long time. Apple wants to dominate not only the delivery platform but the content as well. That 1984 commercial is turning into the apogee of irony now, don't you think?

Yep, Apple has become what they once abhorred. Ironic, isn't it?

 

[TechGuy327]

Now if Apple would couple this with ending the stupid 30% they take from subscriptions.

According to the Verge since Apple has negotiated their own deals with the labels they might not even have to follow this which makes me wonder what the point of it is then.

The current formula is 70/30 and after someone has subscribed to a service for a year the formula changes to 85/15.

The service provider (Spotify) would get 85% and Apple would get 15%. So Apple has already changed the amount it takes.

 

[sudo1996]

If you like a music service, pay for it. Too many people now think that they are entitled to free stuff.

Well, we are. Services offer music legally for cheap or free, so it's cheap or free.
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That logic doesn't apply to China or Chinese. Chinese ISP don't care about IP and the Chinese government barely bats an eye at IP theft or anything of the sort. Honestly though, it doesn't make a difference for Western businesses. English streaming services are a joke in China, and Chinese streaming services carry ****** English movies. And like the guy says, no Chinese person is going to pay the money Western movie studios demand. So, basically, Chinese are going to pirate English movies, TV shows, and songs, because Chinese government doesn't care, and Chinese themselves aren't going to pay more than a dollar or two at most for a movie, which Western artists will never agree to.

The U.S. has IP protection, but nobody ever gets caught pirating content, and piracy sites hardly get taken down. I'd like to see ThePirateBay get destroyed, but it ain't happening. I think the only thing protecting the content is people either not knowing how to pirate, not wanting to steal content, or finding legal services like Spotify easier to use than manual bit-torrenting.
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Apple saved the music industry with iTunes back then???

OMG. Utter lie.

Yep. Those were the times of Napster. The only real way to legally buy music was on CDs. The lure of free content from piracy was one thing. It was a whole lot worse when it was also much easier to pirate than it was to go out and buy the music on CDs. Also, the cost of physical CDs was a burden on producers and, by extension, the musicians and consumers.

 

[shartypants]

I recently checked out Spotify, way better than Apple Music, imo.

 

[x0vash0x]

"maximize profit (i.e. shareholder value)" actually means not engaging in anticompetitive behaviour and a discriminatory platform and exposing the company to legal action which reduces profit and reduces shareholder value.

Clearly you didn't read anything I wrote, because there is an extremely slim, to zero chance, this will go beyond a few AGs crying foul.

THIS IS NOT ILLEGAL.

This is disturbing mentality that is growing today, and shame on you or anyone else who continue to repeat this. Absolute shame.


Corporations are made up of people, human beings. Employees, customers and the society that they operate within.

Yes, their goal is profitable but to claim that they should be allowed to without ethics or morals to achieve this is pathetic. These companies aren't being run by some a-moral robot AI, they are being run by human beings. And when these human beings are willing to put others beneath them, and use immoral and unethical means to take advantage of people, while hiding behind corporate banners, they should absolutely be taken to task for it.

This stupid An Raynd mentalityof "I got mine so screw everyone else" that seems to be prevelant today as some sort of legit excuse for being *******s is despicable.

Lol... This isn't a disturbing mentality, it's a fact of life. Absolutely no business does things because 'it's the right thing to do' they do it because 'people will view us favorable, and it will create good will' No CEO is debating 'Hm, what's the moral, right thing to do in this situation?' You think Tim Cook is thinking 'You know, I really think Apple should just do what the moral thing to do is. Let's hire Foxconn employees ourselves and double their salaries. While we're at it, we should petition the Chinese government on their LGBT rights issues. That'll show them'

Come on, stop being so naive and high-minded. The world does not work like you want it to, never has, and never will. The entire world is built upon the 'I got mine, so screw everyone else'? You may feel good about yourself for appealing so nobel and alright, but you will never be successful.

You cannot steal something that does bro physically exist. So downloading music is not thief, I am not stealing something. I am just getting all these 1 and 0 from one source to my computers.

I give zero **** about if China be successful. I just live my life as usual.

And you cannot still something that physically not exist. Download music and movie is not thief.

LMAO.... Go figure. This is why all my students have to cheat their way into college, with minds like yours, no wonder they pay me $1,000 per personal statement, clearly they can't comprehend basic logic or thought process. How's the 50 cent army treating you?

This is ridiculous. You are actually confusing being competitive with being anti-competitive.

It's absolutely fine to do things that are bad for your competitors. For example, improving your product. Reducing prices. Advertising. All bad for your competitors, and all absolutely fine. Anti-competitive behaviour is something that makes it impossible for your competitor to compete. Something that isn't against your competitor, but against competition per se.

Google can still offer a free service. Hell, Spotify could still offer a free service. Nothing is stopping anyone from offering a free service. This doesn't limit competition, it just makes it more costly. It's not impossible for people to compete, they're just making it more difficult.

I dont think any content maker in the western world factors in the Chinese market place. Markets for western music and film exist purely because of western demand and subsequent payments from western customers. Modern entertainment products only exist in the west because of strong copyright and ip laws which are heavily enforced. On the whole content companies don't care about regions they don't respect copyright.

Movie studios are becoming more aware of Chinese movie goers. There's quite a few of co-productions taking place these days. And everyone in China knows Taylor Swift and Adele. Chinese enjoy Western entertainment. The thing is, there's absolutely no way in Hell that Chinese are going to pay $15+ (100RMB+) for a new CD or movie. This is a ridiculous amount of money.

Take a look at this website: http://vip.iqiyi.com/order.html This is one of the most popular streaming sites in China. It's 200RMB/Yr ($30/Year). These sites typically have movies for individual sale (although a very limited selection) for roughly 20RMB ($3). Before the iTunes movie store went down in China, I could buy movies for a much more reasonable $3-$5 instead quadruple that in the U.S iTunes store.

My point being: Chinese are not willing to pay the prices movie studios have become accustomed to. China is an emerging market, and most emerging markets have high rates of piracy. But, I'm not sure this will ever change, at least in China, because Chinese are so used to cheap entertainment, that it'll be extremely hard to get Chinese to pay more than a few dollars for entertainment.

LovingTeddy is an excellent example of the typical Chinese mentality. Except, most Chinese will admit what they're doing is illegal, or at least is probably illegal.