“I just got off the phone with Eddy Cue,” Peter Kafka reports for Re/code.
“Cue says Apple will pay rights holders for the entire three months of the trial period,” Kafka reports. “It can’t be at the same rate that Apple is paying them after free users become subscribers, since Apple is paying out a percentage of revenue once subscribers start paying. Instead, he says, Apple will pay rights holders on a per-stream basis, the amount of which he won’t disclose.”
“Cue says he doesn’t know if the changes will be enough to get Swift to put “1989” on Apple Music. He also says that wasn’t his reasoning for the change,” Kafka reports. “Cue says he hasn’t talked to any other musicians, labels or publishers yet. Apple will keep the existing royalty rates it has already hammered out with the three major music labels for subscribers, he says.”
Read more in the full article here.
“It’s unclear if Apple can actually pay the rights during this trial period and not get targeted by competitors for predatory pricing or anti-competitive behavior. A company who has a big cash hoard can’t price something so low that others can’t match it, in order to unfairly compete with them. In some countries, it’s illegal to sell anything at a loss, and Apple will be clearly doing that during these free trials,” Kirk McElhearn writes for Kirkville. “Imagine a small streaming service, such as Tidal, which now has to compete with a free service for three months; they can claim that they’re losing money because of Apple’s cash hoard. (And they may be right) … the solution, with Apple paying for these streams, may end up being a Trojan horse that can lead to regulatory authorities investigating Apple’s plans.”
McElhearn writes, “I’m waiting to see what Spotify has to say, whether they’ll claim that Apple is being anti-competitive. And that Mr. Z from Tidal, who has been claiming that there is a conspiracy against his service… Apple is treading a fine line here, one that may lead to more problems than just angry musicians.”
Read more in the full article here.
MacDailyNews Take: Apple can now claim they did not plan any of this. They had deals in place to stream without paying for the trial period. So, there was no collusion here. They simply did the right thing, thanks to Taylor Swift.
If you think the dominant leader in paid music download sales made a mistake that had to be rectified thanks to Taylor Swift a week before launching a high profile music subscription service, we have an absolutely beautiful bridge for sale in Brooklyn, cheap!
Legality is one thing, PR is another.
What’re Spotify et al. going to do, whine that it’s unfair that Apple is paying the artists* and complain that they’ll have to pay them now, too? The other streaming music services will lose that argument with the artists and with the paying public. Spotify and the rest are between a rock and a hard place.
*in effect, Apple is actually paying the labels who then pay out some percentage of that to the artists.
SEE ALSO:
Taylor Swift wins streaming battle as Apple backs down on royalty payments – June 22, 2015
Apple responds to Taylor Swift, indie label complaints; will pay royalties during Apple Music 3-month free trial – June 22, 2015