Sure, the iTunes trial period means that NOBODY is going to buy a single record. They clearly don't understand how people nowadays consume music AT ALL and I just love how these views on the matter show that as clear as day.
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UK Indie Labels Say Apple Music Free Trial Could 'Literally Put People Out of Business'
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A three month free trial is going to put people out of business? Seriously? Talk about hyperbole...
My guess is they went with three months because they're really pushing this human curation aspect to the service. Can you really feel the affects of human curation in just one month?
I think any new user will get the three week free trial, regaldless when they sign up. But initially that lack of revenue could hurt them with the flood of users signing up on June 30.
If people switch over to streaming, they will stop buying and get three months free listening, so to the labels that's no revenue for three months.
Spotify users will end their contracts, that likely means less money from there. If Apple succeeds in getting people onboard who didn't previously subscribe to a streaming service but instead purchased on iTunes, the artists will lose revenue from the iTunes store.
Maybe I can shed some light on this. The Artist and/or Label can choose to participate or not which is what I'm gathering. Sadly, streaming revenues are very, very low. For example, if Madonna's song is streamed one time on Spotify or other streaming services, the services pays out around $0.005 per stream. The artist, given their popularity and contract arrangement, may see 20-40% of that after the label takes their cut. If you take 1,000,000 streams of 1 song x $0.005 = $5,000 to which the artist gets maybe 20-40% of that, maybe 50%. That's nothing. I love Apple. I love Spotify, but Artists don't make money through streaming. If a song was purchased on iTunes at .99 then the label gets paid 70% of that and the artist may make 20-50% of that 70%. So if one artist charges .99 per song, there is .69 cut going to the label. If the label pays out 30% of that cut to the artist then the artist receives almost .21 cents per download. Multiply $0.21 x 1,000,000 and it's $210k for that artist. BIG DIFFERENCE. Indie artists or self published artists make more because there is no label cut and/or the fee to the label is a lot lower, but their downloads may not be as popular.
I'd rather pay the .99/1.29 per song or 9.99 per album than stream. I think streaming is a good way to discover music, but I'd rather support the artist by buying than "renting" essentially.
I'd rather pay the .99/1.29 per song or 9.99 per album than stream. I think streaming is a good way to discover music, but I'd rather support the artist by buying than "renting" essentially.
Say you are an Indie label with a moderately successful underground band (or, a band running its own label, the line is blurred these days, but same difference) with a hotly anticipated new album scheduled for release this summer. You've worked your arse off on recording, post-production and promotion, and the band have made personal sacrifices whilst they spend time writing, rehearsing and recording too. Fortunately recording is cheaper than it used to be, thanks to the awesome Logic Studio X and everything else, but you still can't actually afford to pay the band anything, because you only broke even on the last album due to promotion costs, which are actually paid by all labels, even for artists that look like they've "come from nowhere entirely under their own steam".
You've promised the band that they'll get something back this time, apart from just screaming fans. The launch gigs are booked (which by the time you've paid venue, transport and accommodation fees you're already making an irreversible loss on), the bribes for favourable reviews have been paid (yes, that is really how it works... how else do you explain half the crap out there?) and the t-shirts are printed. You're running on impossibly tight margins, and you're relying on iTunes revenue to bring in a couple of grand so you can break even or maybe even better, because Spotify and YouTube pay near-as-damnit nada.
Then along comes Apple Music. If you sign-up, then all your fans listen to your highly anticipated album for free. Zero income. Legitimised piracy. By the end of the summer when revenue starts to trickle in, the fans have moved onto some other band (as they should) and maybe only listen to your album occasionally. Your only revenue opportunity is missed. You've helped promote the new music service of one of the most cash-rich corporations in the world, and got basically **** all back. The band, disheartened, give up and train as accountants. No Soft Bulletin, no OK Computer, no Parklife, no <insert your favourite indie band's career-defining third album here>.
If you don't sign up to Apple music, then people might at least still buy the vinyl or get the download from Amazon or iTunes. You'll loose out on people hearing your album on Apple Music, but you live to fight another day.
So, of course I'm not signing up my indie label to Apple music.
Some of you lot don't have a clue.
SL
You've promised the band that they'll get something back this time, apart from just screaming fans. The launch gigs are booked (which by the time you've paid venue, transport and accommodation fees you're already making an irreversible loss on), the bribes for favourable reviews have been paid (yes, that is really how it works... how else do you explain half the crap out there?) and the t-shirts are printed. You're running on impossibly tight margins, and you're relying on iTunes revenue to bring in a couple of grand so you can break even or maybe even better, because Spotify and YouTube pay near-as-damnit nada.
Then along comes Apple Music. If you sign-up, then all your fans listen to your highly anticipated album for free. Zero income. Legitimised piracy. By the end of the summer when revenue starts to trickle in, the fans have moved onto some other band (as they should) and maybe only listen to your album occasionally. Your only revenue opportunity is missed. You've helped promote the new music service of one of the most cash-rich corporations in the world, and got basically **** all back. The band, disheartened, give up and train as accountants. No Soft Bulletin, no OK Computer, no Parklife, no <insert your favourite indie band's career-defining third album here>.
If you don't sign up to Apple music, then people might at least still buy the vinyl or get the download from Amazon or iTunes. You'll loose out on people hearing your album on Apple Music, but you live to fight another day.
So, of course I'm not signing up my indie label to Apple music.
Some of you lot don't have a clue.
SL
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If my existing employer said they'll keep paying almost the same amount for for those three months I think I'd get by.
Wait 6 months, then join in. Most free trials will be over and they can get revenue. Not rocket science. Maybe Apple realized this and didn't bother to get them onboard early because they knew this was the correct strategy for them anyway.
I'm not a math guy, but... the added 3%--paid by Apple forever--will:
- NOT offset the missing royalties at first.
- THEN will exactly equal the missing royalties, after a certain time period.
- And THEN will exceed the missing royalties by a total that never stops growing.
So the logical complaint wouldn't be "losing money" but "too much delay before making money." Maybe that's so. But they won't go out of business from the 3-month delay unless MOST of the old download business dries up during the next 3 months. I really don't think the shift will be all that sudden--people have their habits and they like building a library. And in fact, the transition has been going on for years under multiple brands, with their own free tiers to entice people. If that didn't kill downloads overnight, this won't either.
(Plus, the whole point of any free trial is the same for ALL parties who receive income from a service: to get more users and income in the long term. If Apple is wrong that people will like the service, then they'll eat the cost of running it for 3 months and the service will fail and the "problem" will be solved. But if they're right, then the "first taste free" will benefit Apple and the content owners alike.)
I can certainly understand wanting the big company to give the little one more time to negotiate back and forth before launch; but the small label could choose not to participate until after launch, and buy time to think about it. And negotiations with the big labels were surely complex and painful; I doubt it would have been practical to bring in tons of smaller companies in too, from the very start of negotiations. Apple needed the big ones first, and the little ones second. Such is life.
- NOT offset the missing royalties at first.
- THEN will exactly equal the missing royalties, after a certain time period.
- And THEN will exceed the missing royalties by a total that never stops growing.
So the logical complaint wouldn't be "losing money" but "too much delay before making money." Maybe that's so. But they won't go out of business from the 3-month delay unless MOST of the old download business dries up during the next 3 months. I really don't think the shift will be all that sudden--people have their habits and they like building a library. And in fact, the transition has been going on for years under multiple brands, with their own free tiers to entice people. If that didn't kill downloads overnight, this won't either.
(Plus, the whole point of any free trial is the same for ALL parties who receive income from a service: to get more users and income in the long term. If Apple is wrong that people will like the service, then they'll eat the cost of running it for 3 months and the service will fail and the "problem" will be solved. But if they're right, then the "first taste free" will benefit Apple and the content owners alike.)
I can certainly understand wanting the big company to give the little one more time to negotiate back and forth before launch; but the small label could choose not to participate until after launch, and buy time to think about it. And negotiations with the big labels were surely complex and painful; I doubt it would have been practical to bring in tons of smaller companies in too, from the very start of negotiations. Apple needed the big ones first, and the little ones second. Such is life.
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Lol!
For all the talk of "drinking the Apple koolaid", I've NEVER seen anyone so blindly follow such a ridiculously stupid baseless lie... hook, line, and sinker!
In actuality... most commission based sales jobs don't see money for the first few months. I suppose all auto sales professionals and financial services professionals were "homeless" in their early careers??! Hahahahahahahahahaha..... Omg. Quit!
Yeah, I'm sure there's a lot of Indie artists with a mortgage payment & they are precisely in a "make or break" moment, where 3 months is the difference between wealth & stardom.... and a lifetime of regret and misery. *smh*
No. That only works if you are a label that has a roster of several successful bands with multiple releases. The small labels complaining are typically one-off entities formed by the band themselves (and registered with the AIM), or bedroom-based labels with maybe one moderately successful artist propping up a handful of other artists who are still trying to break through and not yet making any money. If your big one release is coinciding with the summer period when everyone will still be on the free trial, then the damage that does cannot ever be reversed.
I'd re-consider signing-up to Apple Music after the summer, but right now you can forget it.
Bold mine--that's why I don't see a need to panic. Not "everyone" is going to leap on Apple Music right now. Even a massively successful launch phase will leave most people this summer still doing whatever they did last month: such as using other streaming services and/or buying downloads.
If an indie label wants to time their joining of the program strategically (some time after a big release, say) that's fair game and perfectly reasonable to do. They're not forced to join now or never.
You mention labels that will NEVER have any significant success in future to offset a short-term loss now. (And you do mean NEVER--if it were "eventually" then my math still works.) If that's the case, if they were never going to have a big successful release again after the one right now, then I don't think they were going to survive anyway. (Sad to say: I wish art and income weren't connected.) But yes, maybe they'll prefer to join later rather than now. Later on will be a mix of free trial users and paid users, vs. now when it's new and nobody is paying.
Yours is the 1st to be me more of an insight into what the possible problems could be with the 3-month period. But would your example equally apply to a similar band who was NOT a.) just starting out or (b.) about to release their next album? Surely the 'problem' you sketch could just as easily be avoided by launching the album through the usual means - i.e. what is currently available/done - why does one HAVE to sign up to Apple Music if the timing isn't right, right now?
And regarding your point of - 3 months later, they all would've moved on to the 'next best thing, as they should' - is rather(?) unusual. What do you mean by that?
What about those listeners out there, who, when they find something they like, patiently wait for each new album to be released, and then actually PURCHASE it. You seem to be suggesting that all a new and upcoming band would get in terms of revenue, would be those 3 months of income - and then nothing?... But then surely that's a critique of the entire streaming service model, not just Apple Pay?
Would be interested to hear your thoughts in reply.
If Apple included iTunes Match costumers for Apple Music music labels wouldn't lose any money. Maybe music label stop putting out crappy music like Britney Spears than they would make more money.
Apple users have a pretty good track record of adopting new services pretty quickly, I wouldn't be at all surprised if a large majority of iOS users sign up to the free trial within it's first month.
It's possible that Apple with apply start it automatically (although I doubt that - people will probably be more likely to appreciate and therefore continue with it if they try it out at a time of their choosing).
autrefois
macrumors 65816
Apple is a HUGE name, and millions of people have heard that they can get 3 months of free music on Apple Music. You don't think this will have any effect on downloads or other paid streaming services?
There's no one-to-one equivalency of course, but certainly people can realize the following scenarios are likely, both of which would lose labels and artists potential revenue:
• Let's say I'm a Spotify Pro customer. I decide to try out Apple Music for 3 months. During those 3 months, any artist who would have gotten royalties for each time I would have listened to them on Spotify, will get no royalties whatsoever for any listens on Apple Music for 3 full months.
• Let's say I'm an iTunes customer and I normally buy my music to download. Apple's offering 3 months of streaming for free. Instead of buying that new song, I'll find it on Apple Music and listen to it as many times as I want to the next three months for free. By then, more songs come out and I forget about this song or only listen to it once in a blue moon, resulting in no or nearly no revenue for the artist or their label.
Multiple these by thousands of times and it will start to add up. Not to mention that this will further play into the mindset that music should be free or dirt-cheap and the person in the second scenario will probably be less likely to purchase tracks in the future.
I'm not saying it's impossible any artists or labels will benefit in the long run, but it's very clear to me why at least in the short run this will likely lose artists some money.
To people not understanding:
When Apple Music launches, for the next three months, nearly every person who owns an iPhone or Mac, plus many people on Windows or Android, will stop using any paid music service. Nobody will be using Spotify, Pandora, or any of the other streaming apps that are currently used. Downloads will become nearly nonexistant.
For three months, Apple Music will be the preloaded music player on OS X and iOS, and it'll let you play anything you want for free, so most people are going to use it instead of any other way they might get music for those three months. Ad revenue for other free streaming services will dry up. Subscriptions for paid streaming services will be put on pause. Many people who have thus far stuck with downloading music will discover the world of streaming music. Even audiophiles (a tiny minority) might try it out.
The larger companies and artists could survive. The smaller ones will die.
Here's something I'm wondering: will self publishing become far more common as a result of this? Why go through a publishing company when you can easily upload via iTunes Connect yourself?
Also, this will be devastating to Spotify. They're already having a hard enough time balancing their budget - all of their revenue being shut off for three months is going to slam them pretty hard.
When Apple Music launches, for the next three months, nearly every person who owns an iPhone or Mac, plus many people on Windows or Android, will stop using any paid music service. Nobody will be using Spotify, Pandora, or any of the other streaming apps that are currently used. Downloads will become nearly nonexistant.
For three months, Apple Music will be the preloaded music player on OS X and iOS, and it'll let you play anything you want for free, so most people are going to use it instead of any other way they might get music for those three months. Ad revenue for other free streaming services will dry up. Subscriptions for paid streaming services will be put on pause. Many people who have thus far stuck with downloading music will discover the world of streaming music. Even audiophiles (a tiny minority) might try it out.
The larger companies and artists could survive. The smaller ones will die.
Here's something I'm wondering: will self publishing become far more common as a result of this? Why go through a publishing company when you can easily upload via iTunes Connect yourself?
Also, this will be devastating to Spotify. They're already having a hard enough time balancing their budget - all of their revenue being shut off for three months is going to slam them pretty hard.
If Apple wants to offer a three-month free trial, it should be Apple's problem how it is going to finance that. It shouldn't be Apple going to the labels and saying: you should offer a three-month free trial.
P.S.:
The labels are gaining nothing when users switch from one streaming service to another. Why should the labels fund an attempt to shift users from one service to another? Because Apple has the market power to demand extras whenever they feel like it?
There is an alternate scenario where the big labels agreed do forgo streaming revenues for three months in order for a higher percentage over the long term. But what I don't see why Apple has to insist on every label to have the same deal, if a label insists on a shorter free trial and a lower percentage, why should Apple care? I don't see why they couldn't offer their customers a longer free trial and pay the difference out of their own pocket, they would be making it back over the longer term anyway. If a label would have a liquidity problem with three-months free trial, Apple should be the company best placed to solve it.
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Streaming revenue is biggest (or in my experience, only actually significant at all) around release-time. Music fans are fickle. This is a basic fact.
The biggest impact will be on small labels and bands who already have a release lined-up this summer and it's too late to move it. Labels delaying signing-up to Apple Music for this reason aren't panicking (as Nanogramme said), but just making the right business decision. But we'd still expect income to be impacted over this season either way. There's going to be a seriously big source of free and ad-free music, and that's gonna hit our bottom line whatever we do.
For labels with no significant release this summer, then it's just part of the ongoing general erosion of revenue that we have to accept. The iTMS was a reasonable little revenue earner, but Spotify has already come in and cannibalised that. Since Apple Music will be marketed directly at iTunes users, that erosion will only get worse. But that's just the way it goes.
And indeed, my label has no significant release this summer, but I'll be standing alongside my fellow UK indie labels, some of whom are going to be royally shafted. Decent honest music in the UK has been under attack for too long from too many directions.
It's also the ruddy cheek of it. Apple could afford to pay us if they wanted to this summer.
That's one Hell of an assumption you are making based on pretty much nothing but gut instinct. What about all of the people who don't upgrade their iOS for 6 months or more? What about all of the users who have huge saved playlists on Spotify and see no need to switch services for the same price and redo all of the work? What about all of the people who have zero interest in streaming services because they don't want to rent their music for a subscription fee for all of eternity?
If we were having this conversation just a few years ago, some new subscription service, everyone would be laughing and saying "this is stupid, we've been here before, no one wants to rent their music!". Now, all of a sudden since Apple is starting a subscription service it's terrible! This will destroy the music business! Everyone will want to rent their music!
To think that the entire music-listening world is going to turn on its head, cancel all of its services, stop all music purchasing activities, just because Apple Music has a free trial is beyond nuts. Sure, the Apple faithful might do this, and some super tech savvy early adopters will try it out. Some may cancel their Spotify Premium - some won't bother. This is speculation run completely wild.
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Fine, not everyone. But there will be an impact, and it is likely to be significant. For some, not all, it could be disastrous. It doesn't mean the end of indie music and indie labels, but it's still enough reason to be angry.
The music belongs to the artists that performed and wrote it, and to the labels that paid for it to be made (often one and the same). It isn't Apple's to give away for free, in the same way I'd never let anyone else use my licence code for Logic Studio.