Business News Digital Labels & Publishers Top Stories

Apple u-turns on royalty free trial after Taylor Swift speaks

By | Published on Monday 22 June 2015

Taylor Swift

So after a week of stern statements, critical commentaries and veiled threats from across the music industry, in the end it took just one short letter from Taylor Swift. Perhaps she could get online and declare government austerity counter-productive, peace for our time in the Middle East, and Dave Grohl’s leg unbroken, and we could all get on with living in a better world.

So yes, following the news last week that Swift – a famous critic of freemium streaming – was withholding her latest album from Apple’s big new music service in protest at the tech giant’s proposal it pay no royalties at all during the planned three month trial period for Apple Music, the singer published an open letter on Tumblr this weekend to make her objections more explicit.

Noting, as had all of Apple Music’s detractors in the indie community, what a great partner iTunes had been in the past, Swift told her fans: “I’m sure you are aware that Apple Music will be offering a free three month trial to anyone who signs up for the service. I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company”.

Insisting her shock and disappointment was on behalf of the wider artist community, she continued: “This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt. This is about the producer who works tirelessly to innovate and create, just like the innovators and creators at Apple are pioneering in their field… but will not get paid for a quarter of a year’s worth of plays on his or her songs”.

Conceding that Apple isn’t including a Spotify-style freemium strand in its new streaming service, which is good news given her well documented distain for free streams, she went on: “[But] three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. 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”.

Apple had been, in the main, pretty quiet as indie label trade groups around the world lined up last week to criticise the royalty-free three month trial, but this time the firm was quick to respond, with its Senior VP Of Internet Services And Software Eddy Cue quickly tweeting to declare his new streaming service would, after all, “pay artists for streaming, even during a customer’s free trial period”.

He subsequently told Billboard: “When I woke up this morning and saw what Taylor had written, it really solidified that we needed a change. And so that’s why we decided we will now pay artists during the trial period”. So that’s all sorted then.

“I am elated and relieved”, Swift tweeted within the hour, Cue having seemingly called the singer, just in case she missed his tweet.

Apple had told rights owners that while the royalty-free three-month trial period was a big ask – most other streaming services have a one-month free trial – it would compensate the music industry down the line by paying a slightly higher revenue share, it being common practice to play one part of a streaming deal off against another (as explained in this CMU trends article here).

This likely played a key role in convincing the majors to sign up to the royalty free period, they being in a better position to take a hit now in return for a future revenue boost. But even though it has now back-tracked on the royalty free trial offers, Apple still seems to be offering the slightly higher revenue share as well.

That will presumably have a not insignificant impact on the tech giant’s bottom line, though the Swift-inspired about-turn has garnered Apple Music plenty of very valuable PR points as it ramps up to launch its big new music play, leading many to speculate that the whole thing was a publicity stunt. Or at least, Cue and co had been ready to capitulate in response to mounting pressure from the indies worldwide, but being able to spin it as a Swift-placating move was a nice plus.

Though arguably the whole debacle was caused by bad communications in the first place, with the indies as annoyed about the deal being dropped so late in the day – pretty much fait accompli – as they were about the actual terms. And there remain some questions about how the Beats 1 radio station is being licensed, about what the publishing deals look like, and as to why the labels would post audio or video to Apple Music Connect royalty free, when YouTube and even SoundCloud now provide options to monetise such promotional activity.

But if nothing else, all this might result in a flurry of sign ups to Apple Music next week just to see which indie artists on are there.

For a further recap of the Apple Music story prior to Swift’s letter, listen to last week’s edition of the CMU Podcast here.