Apple Music free trial pays record labels industry-standard 0.2 cents per stream royalty rate

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Lots of ink was spilt regarding Apple’s decision to not pay artists during the free trial only to reverse course after Taylor Swift raised a stink about it. Apple’s said it’ll pay for free users and keep the royalty a bit higher for subscribers but stopped short of specifying the exact sum paid during the free trial.

According to unnamed record label executives who spoke to The New York Times newspaper, Apple is paying an industry-average royalty rate of 0.2 cents per each streamed song during the free three-month trial, roughly on par with Spotify.

The 0.2 cent rate would apply to all labels, said industry executives who noted the number was roughly comparable to the free tiers from services like Spotify, which pays a 35 percent share for free users versus the 70 percent per-stream rate for paid subscribers.

The 0.2 cent rate excludes a smaller payment for songwriting rights that goes to music publishers, reads the article. “Apple is still negotiating with many publishers over those terms, several publishing companies confirmed on Wednesday.”

Following “extensive talks” with Universal, Sony and Warner ahead of the June 8 Apple Music introduction at WWDC, the three labels struck the deal with Apple to have their music streamed via the upcoming service.

“But independents were not sent proposals by Apple until the day of the event, and they were told they had five days to approve them with no possibility of negotiation,” according to two executives with knowledge of the talks.

As “many labels were upset by the prospect of three months of reduced income from the industry’s biggest retailer,” and following a rebuke from Taylor Swift, the iPhone maker relented and drafted a new proposal that paid royalties during the free trial period while also addressing concerns like the policing of content uploaded by artists to the Apple Music’s Connect feature, basically a social network for artists to connect with fans.

Apple Music includes Beats 1, a 24/7 Internet radio hosted by celebrity DJs, in addition to human curation, streaming, a Connect feature, offline playback and more. The service costs $9.99 per month ($14.99 for a family of six) after a free three-month trial and launches June 30 on the iPhone, iPad, iPod and Mac and Windows PCs, with an Android app and Apple TV compatibility due this fall.

Source: The New York Times