Apple Music all devices teaser 001
Apple is in full-on PR damage control mode with a sudden change of heart after pop artist Taylor Swift posted her strongly worded editorial on the controversial and much maligned decision to not pay musicians during Apple Music’s free of charge three-month trial period. Eddy Cue, Apple’s Senior Vice President of Internet Software and Services, took to Billboard to discuss what prompted this decision.

Acknowledging that Apple’s been hearing a lot of concern from independent artists about not getting paid during the trial period, Cue said that was never the company’s original intent.

“We never looked at it as not paying them,” he said, adding Apple let Taylor know they’re making the changes to learn she was “thrilled and very thankful.” He did not say whether Swift would change her stance and allow Apple Music to stream her popular “1989” album.

“We had originally negotiated these deals based on paying them a higher royalty rate on an ongoing basis to compensate for this brief time,” Cue explained.

“But when I woke up this morning and saw what Taylor had written, it really solidified that we needed to make a change. And so that’s why we decided we will now pay artists during the trial period and we’ll also keep the royalty rate at the higher rate.”

The decision was made following a full week of discussion between Cue and CEO Tim Cook over the fallout from indie artists’ rebellion against the mighty Empire of Apple.

“Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing,” Taylor Swift wrote in a blog post. “I say this with love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the progression towards a streaming model that seems fair to those who create this music. I think this could be the platform that gets it right.”

Cue said Jimmy Iovine “was very supportive” of Apple’s change in stance.

The whole issue blew up after Re/code ran a story detailing Apple’s payout structure in regard to Apple Music. Apple’s payouts are a few percentage points higher than the industry standard, “in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial,” said Re/code.

A full 1.5 percentage points higher to be precise.

So, who’s eating the cost then?

Apple is.

“We’re certainly paying for it yes,” revealed the executive.

Apple thought it was entitled to ask the labels to agree to free for 90 days because it’s “promoting great music” with the service.

“We thought that by giving them that time, people would see this revolutionary streaming service, the first worldwide live international radio station, how fans can connect with their favorite artists,” he argued.

I’m not buying the reasoning but am certainly glad Apple moved swiftly to do the right thing. I was disappointed in Apple. Refusing to pay artists to use their music to promote what’s basically a paid service just wasn’t fair to begin with.

Even the company’s most vocal proponents dissed the no-compensation policy. For example, The Loop’s Jim Dalrymple wrote that “if the company feels so strongly that someone shouldn’t be paid for the three-month trial, why don’t the top ten executives at the company give up their salaries, bonuses, and stock for three months and pay the artists instead.”

Apple likes to say that music is a part of its DNA.

That said, there never was a graceful exit from this mess other than biting the bullet and switching to compensate artists during the free three-month tier.

Source: Billboard

  • Matheus Lisboa

    I know I’m going to apple music, but still wonder if it’ll pay off for apple. Will people really leave Spotify or will the status quo prevail?

    • Mr.Coolfreak

      Well the whole situation switch Taylor swift certainly made a lot of people aware of Apple Music. One big benefit of the service is that all music is stored in one place, the music you stream and music on your phone is in the same app

      • Elias Chao

        I haven’t though how much marketing Taylor did to Apple Music. A lot of people are now aware of the service.

      • Kurt

        Unfortunately in a negative light. But that won’t last long

      • omgitsobaid

        Yup.. A very huge benefit for sure

  • Riley Freeman

    I have iTunes match and I’m good. I would never use apply music but to me this sounds insane. If they negotiated these deals and we’re all aware of the 90 days and to now throw up a fit is funny. If you didn’t like it why did you agree to it?

    It’s funny how people sign contracts then complain about it afterward.

    If this was hidden then ignore everything I said above but I doubt it was cuz of the wording used

    • Joostiphone

      But iTunes Match will be combined with Apple Music. So I think you also will get Apple Music with your subscription? I am not sure though.

      • If they are combined then that does bring up an interesting topic. What about is imatch users? I don’t want to add apple music onto my bill I’m fine the way things are now. I have plenty of music to stream as it is.

    • therealjjohnson

      The parent record companies made the deals, not the individual artist. They can still choose to (depending on how much of their work they own) have their material on a particular streaming service.

      • This is what I don’t understand. You’re right the record companies did negotiate these contracts and were aware that artists would not be paid during the trial so why were artists such as Taylor Swift angry at Apple as opposed to having a go at their record companies?

  • That_Fruitarian

    “We had originally negotiated these deals based on paying them a higher royalty rate on an ongoing basis to compensate for this brief time,” Cue explained.”

    Every story I read seemed to omit this gem.

  • pauleebe

    Yet, Taylor still won’t make her album, 1989, available on Apple Music.

    • asch3n

      Do you have any source to back that up?

      • pauleebe

        She was quick to criticize Apple, and then respond once they changed their course… yet not so quick to make her album available. Seems pretty telling to me.

        It’s not being released because it means less revenue for her, I’m sure.

      • Zack Whitfield

        So what? Would you do your job for half the pay?

      • Chindavon

        Apple is flipping the bill to promote the service too. You know, the service that will pay royalties to these artists with all the subscriptions, the “Free Trial” will bring in. Oh Ya. , Apple doesn’t get paid during the free trial period.

      • M_Hawke

        And you are missing the point that this was Apple’s Great Idea, not the artists. Did they artists get a vote? Did they get a say? No. Apple just decided to do this. So what if the the artists will eventually get royalties, even industry-leading royalties. It was Apple who just suddenly says “You are not getting paid for the next 90 days.” What is there not to understand?

      • Zack Whitfield

        Who cares? Apple is going to start making money off of these artists, if they weren’t going to make money they wouldn’t do it. It’s hard to see Apple on the losing side here.

      • asch3n

        It is on there. 🙂

    • Yet, Taylor still won’t make her album, 1989, available on Apple Music.

      There’s a word for that, it’s called ‘spite’!

  • dbtwothree

    Apple music is a) also not making anything during those 90 days and b) is giving artists free promotion on their platform that is already on hundreds of millions of iDevices and Macs. I understand no one should “work for free” (ridiculous way to phrase it btw) but asking Apple to not make anything AND foot the bill isn’t right either. Apple, in that sense, is PAYING TO WORK.

    • M_thoroughbred

      I understand what your are trying to say but it is Apple’s idea to make the service free for 90 days no one else’s so you your service+your idea to make it free for 90 days= your bill

    • M_Hawke

      So? I don’t know where you work, but wonder if your employer decided to run a 90 day promotion on a new service based on your skills and said to foot the bill, you would not get paid for 90 days because–WOWZA!–it is such a great idea that will revolutionize the world and not only that, you will get a raise after the 90 days? Oh, yeah, and you still have to work those 90 days. Fair? I didn’t think so.

      • dbtwothree

        A) The music is already published and they aren’t currently being paid by Apple. This is an added bonus on top of alllllllllll the other royalties they are currently getting (i.e. iTunes, Spotify, Pandora, etc.) B) I’m at a Wall St. firm and am only paid on the business I transact, ala the artists are only paid on the songs that are streamed. Lesser known indie artists aren’t making jack off this anyway, much the same way Tidal only benefits the already rich and well-known. If you aren’t able to give people a chance to try it and get them hooked, there will be little revenue to split going forward.

      • M_Hawke

        They are getting paid royalties from iTunes Radio. And so what if it is an added bonus? The point is, Apple decided to do this. Since this was negotiated through the artists’ labels, they didn’t have any say. Why their labels would agree to such a thing is understandable because they, like Apple, are only interested, appropriately, in profit. However, the deck is always stacked against the artist. They didn’t take kindly to this as would be expected. Though it is appropriate for corporations to be profit-minded–I have no problem with that–there is a point to where it is greedy. This is Apple’s investment and risk. Apple should pay for the investment and the risk. The artists didn’t demand that Apple try doing this. Apple’s lack of understanding of how artists are sensitive to protecting their intellectual property is astounding. Especially since they claim that music is “part of their DNA.”

  • Norbi Whitney

    “Apple moved swiftly to do the right thing.”
    HA, Swift!

    • M_Hawke

      Good catch! LOL

    • Jerry

      lol GOTEM!

  • Zack Whitfield

    “I’m not buying the reasoning but am certainly glad Apple moved swiftly to do the right thing”

    hurr hurr.

  • Apple make billions and not paying the artists was such a greedy and evil move. Good for once Apple is humbled and pay to whomever is due.

  • Yujin

    The main issues is not why apple doesn’t pay..it is greedy artist like Taylor who wanna milk companies and their customers cause they are “popular”. This is nothing like a PR stunt for her and she comes out as the protector of the little guy…meanwhile services like spottily and apple music do more for little artist than the big ones. Too bad apple changed their tune…wish jobs was alive I’m sure he would have pulled all of her music and then some from the world’s biggest music store.

    • M_Hawke

      I totally disagree. You misaligned Taylor, but it was Apple who initiated the greed grab. They backpedaled when their idiotic assumptions, expectations, and greed was bared in public.

  • M_Hawke

    I think this does not bode well for Apple, at least for the near term. If the Apple execs were this blatantly CLUELESS on how artists would react to a no-royalty period, then I believe they are pretty naive on important aspects of the music industry and musicians and how protective they are of their intellectual rights. This was just a very, very stupid move on Apple’s part. Hopefully they will learn from it and become more educated.

  • madmaxmedia

    They don’t have to damage control because they reversed stance. By changing their mind on this, they end up with free positive buzz because of Taylor Swift’s love letter. It’s like when you complain to a company about a bad product or service, and then they surprise you by trying to solve your problem instead of denying it- you often end up with a better impression of the company than had the problem never happened.