Taylor Swift wins streaming battle as Apple backs down on royalty payments

“It took Taylor Swift less than 24 hours to make technology giant Apple Inc. back down,” Tim Culpan and Aki Ito report for Bloomberg. “In the wake of a stinging rebuke from the pop singer, Apple made a rare public about-face on an earlier decision not to pay royalties for songs played on its new streaming-music service during a three-month free trial.”

“Swift penned an open letter on Tumblr, calling the policy ‘shocking, disappointing, and completely unlike this historically progressive and generous company,'” Culpan and Ito report. “‘When I woke up this morning and saw what Taylor had written, it really solidified that we needed a change,’ Eddy Cue, Apple’s senior vice president for Internet and software, said in an interview with Billboard Sunday. ‘And so that’s why we decide we will now pay artists during the trial period.'”

“The reversal isn’t a total loss for Apple, which has more than $190 billion in cash and can easily afford higher royalty payments. It also is generating untold publicity for the new service,” Culpan and Ito report. “Once the decision was made by Cue and Apple Chief Executive Officer Tim Cook, Cue called Swift on the phone from her tour in Amsterdam, according to Billboard. ‘I let her know that we heard her concerns and are making the changes,” Cue told Billboard. “We have a long relationship with Taylor so I wanted her to hear directly from us.’ …’I am elated and relieved. Thank you for your words of support today. They listened to us,’ Swift said in her own tweet.”

Read more in the full article here.

MacDailyNews Take: If this isn’t brilliant PR in action, it ought to be.

More on that here.

Spotify is hating life even more today. Just wait until Swift announces that “1989” is exclusive to Apple Music.

45 Comments

    1. Reminiscent of Apple lowering the price for iPhone so soon after the launch, and giving iPhone “early adopters” Apple Store credit for the difference. Steve apologized to customers for the “mistake” in pricing. The early adopters were happy, and gleefully spent their “refund” (and probably more) at the Apple Store. The “later adopters” were smugly happy because they felt “smart” for waiting, and saw iPhone’s new lower price as a bargain. Apple was happy for the free “Apple listens to customers” PR. A “feel good” win-win-win if there ever was one.

      Steve Jobs would be proud… 😉

    2. i’m going to get one starred but I disagree.

      As PR it’s a disaster because in the way the press, the blogs are going to spin it which is “Greedy Apple taken down by Hero Swift”.
      I’ve read a whole bunch of articles in that vein. Most internet articles today are designed for ‘quick’ bites and a ‘racy’ plot line (heroes, villains, evil corporation etc) and not long on analysis. Almost none I’ve read printouts Swift’s praise for other things Apple in her original post.

      even this MDN link article’s title is “Taylor Swift Wins Streaming Battle as Apple Backs Down” (Swift (hero) WINS, Apple (the villian) BACKS DOWN). In the copy: “Stinging rebuke” is NOT good PR for Apple.

      Here are some headlines “Apple CHANGES TUNE on royalties AFTER Taylor Swift COMPLAINS” (emphasis mine. The trust is that Apple was greedy and trying to rip off poor artist until the ‘hero’ kid fought back)

      another “Taylor Swift STANDS UP to Apple”
      another “25 year old Blogger TOOK DOWN APPLE”
      this is from TIME magazine and this is one of the more reasoned articles yet it goes like this : “champions for beleaguered artists rather than uncreative conglomerates hellbent on ripping fans off…. Apple Music service and several music labels are under investigation by two state attorneys general for anticompetitive practices”

      Most posts just has Swifts most aggressive complaints on “greedy apple” (with a few throwing in Apple’s Foxconn labour issues!)

      There will be thousands of Apple hating blogs spinning it, many FINANCED BY APPLE RIVALS trying to blow up as much negativity as possible.
      (see how this is done in books like “Trust me I’m Lying, Confessions of a Media Manipulator by Ryan Holiday)

      ETC.

      ——-
      HOW IT SHOULD HAVE BEEN DONE. this would actually have been GOOD PR and Marketing.

      Apple should have PLANNED FROM THE START to pay the artists. No need for Swift’s “rebukes” or all the indie complains earlier.
      Apple should have had a campaign in the vein off “It’s 3 months free BUT we’re are paying artists . Although we’ll lose tons of money apple Believes in supporting artists especially young indies because Apple loves music and Apple would like to give 3 months Free Music AT OUR EXPENSE to our fans ! . We are Apple We are DIFFERENT… ”
      ETC (I just thought of the above line in one minute. Pro PR guys paid millions of bucks can do a better job with a team)

      Then Apple should milk this “Free but Artists Paid” theme for all it’s worth, all over in a media blitz campaign. (with Indie artists quoted as praising it) .. . This would have given Apple a POSITIVE AURA (apple NOT greedy, supporting artists and fans etc) instead of now ‘rebuked’ into action.

      like I said I;m going to get down voted but thats what i believe should have been better PR and Marketing.

  1. Soooooo… she posts on Tumbler rather than contact Apple directly o_0 Very professional. Keep in mind she only gets paid if it’s actually streamed, publicity whore won’t be getting any of my money

    1. If you read the letter, you would notice how the letter is full of praise for Apple, their innovative people, and everything they had done for the music industry. She consistently shows her admiration for the company and is very polite and respectful.

      The letter is extremely well written; the exact opposite from that profane diatribe by what’s-his-name (Newscombe?), that Apple effortlessly ignored. Swift’s letter was deserving of a proper response by Apple. They could have easily decided to say “We’re truly sorry you feel that way, Taylor, but this was a business decision”, or something more diplomatic, in order to placate her. The point is, his verbal diarrhea deserved silence (which it received); hers required a proper response, and that’s exactly what it received.

    2. “Some people you just can’t reach” Would you be willing to work 3 months without compensation? Taylor can certainly afford to NOW, but what about the small indie artists just starting out? this was Taylor using her clout to help the music industry, not a selfish act. Free music is a fail, why would anyone give away anything? its a business just like any other. How long would any business stay afloat giving away everything? If Apple wants to offer free service then THEY should eat the loss, not the artists!!

  2. I’m not a big fan of streaming music in the first place, but I’m hoping Apple Music succeeds. I actually hope the artists demand the same terms from Spotify and Pandora because they are less likely to be able to afford paying artists. But the bottom line is the artists/labels were all stupid to begin with – thinking they could make money on streaming. And the first mistake they made was to raise prices on iTunes from .99 to $1.29.

  3. Good on Swift for calling them out but the 2000lb gorilla is still in the room–RECORD COs/labels who snatch-up the lion’s share of revenues produced by artists. Until the record co’s are relegated to the ‘dumb pipes’ that they are–all except the most successful artists will remain mostly uncompensated.

      1. I think it was a JOINT EFFORT to promote the musicians and a new PAID service that will likely result in very little money for Apple but a bonanza for the artists and a pleasure for the paying customers.

  4. As with regular Music sales Apple aren’t looking to make fortunes from streaming (at least in comparison to their other offerings), ultimately this is a product designed to make sales of their hardware more attractive, so in the long run if this succeeds they will make a fortune from device sales. I don’t know the economics of it, but it seemed like it was a far worse deal for the music companies and artists than it was for Apple.

    1. I think you’re getting this wrong. The perspective of all working musicians here is this: Apple is launching a new music streaming service, entering an existing market for such services (it may still not be a mature market, but it clearly exists and is a meaningful part of the music industry). In order to acquire customers, Apple decided to offer free access to this streaming service.

      Now, for artists, this is all nice and great, but for them, this doesn’t mean much. There is absolutely no reason why an artists would want to promote Apple’s service at no charge. For artists, this is Apple’s marketing campaign; not their own. They see no reason why they would want to give their own work away for free for three months. While in the end there may be some reward for that, the most significant recipient of that reward will be Apple, as it will bring customers to Apple (away from Spotify or Pandora, or Tidal).

      Apple (and its fans) are hoping that their new entry will significantly increase the size of the streaming market. For all others, this isn’t so clear; most will expect Apple to poach people away from Spotify. In such a scenario, artist are suddenly losing three months of Spotify revenue, not getting anything from Apple until the end of the trial period.

      The final outcome is correct. If Apple is trying to promote their own service by offering it for free, it is only fair that Apple underwrite that promotion and not throw the vast portion of that promotional burden over to the artists. After all, Apple’s share of that lost revenue is less than 30%.

      1. I see Apple as creating a money stream for musicians and not making much if any money themselves off of it. It is for the benefit of Apple customers to access the music they want from the musicians they like and pay the musicians for their work. Musicians get known and can get paid by the consumers with Apple’s promotion (for less than 30%).

        Greedy musicians don’t want to pay for the promotion and expect Apple to provide them with a free vehicle to make money.

        1. “Greedy” musicians? You do realize that the vast majority of professional musicians hardly make any money. Same with actors, dancers, writers, etc. Whatever Taylor Swift’s motivations, or whether this was a whole “false-flag” scenario as MDN’s take suggests, I’m glad it’s worked out for the best.

          APPLE should be springing for the cost of the free trials, not the artists themselves.

          1. My former wife was a struggling musician. I personally support local musicians by going to their live performances. Greedy musicians are those who think that they can produce one song or one album and make a living for the rest of their lives on that small piece of work. Taylor Swift is hugely overpaid for the work she does. (yes, so are professional athletes).

            1. Because your former wife would turn down Taylor Swift level royalties to maintain her artistic integrity. I don’t think so.

              You also do not seem to know how economic markets work.

              People want to pay to see Taylor Swift and buy her records at a certain market price, therefore she is not overpaid.

              People choose to buy “overpriced” iPhones and Macs, therefore Apple’s products are not overpriced.

            2. Your ignorant comment deserves a response. If you write a song, nobody should ever be able to give your work – that song – away for free, does that not make sense to you? Ask any of those live musicians you go see, or maybe your ex wife.

              As a former musician myself, who knows many that succeeded – I sure didn’t, all of those I do know would want to be compensated for their work.

              If you read Taylor’s letter, you would note her concern was not for herself, but more for new musicians who just got started, and her point that these artists don’t ask Apple for free iPhones, so why would Apple expect them to willingly give away their product for free is a valid one.

              It was a succinct and well-put argument, from one of todays truly amazing artists.

              Taylor does a lot of good work day in and out for her fans and others who need help, and has managed to maintain a positive outlook and image despite everyones, (including your) attempt to bring her down. I wish her nothing but the best.

        2. As I said, while Apple and its fans may expect this to significantly increase the streaming market size, realistically, this is far from certain. For anyone outside the RDF, the net result may well be customers switching from Spotify to Apple, without a significant increase in total numbers. In such scenario, musicians would be losing three months worth of revenue, just so that Apple could poach customers away from Spotify (and others).

          When Apple opened iTunes Music Store, over ten years ago, it didn’t ask musicians to offer their music for free for three months; whoever allowed their songs on iTMS started receiving payments from first download, regardless of whether that download was paid for or not. When iTMS started, I remember receiving several promo offers allowing me to redeem them for a free song download on iTunes. They were paid for by Apple (or whoever was underwriting the promotion), and artists got every penny of their share for those free songs.

    2. Yours is the position of the Supermarkets that force producers to offer products at promotional discounts and at no pain to themselves by using their corporate muscle.

      And it took a 24yr old artist to point that out ?

      So much for the music industry savvy Bovine and Dr Dire.

  5. I think shes completely right in her demands as every artist is. I dont know how things work in the US but in my place radiostations are obligated to pay for every instance they play a tune, so why not Apple during the promotion period? They can certainly afford it. Good move, and this makes me proud 2 be a apple shareholder. I think a lot of criticism smells of sexism or just disliking for her kind of music. This is about principles!

  6. Apple classy as always. Take that spotify. But that Taylor is a little arrogant. Just respect your fans. They want download/streaming not the cd. Very greed.

  7. Well that was quick.

    Someone in MDN’s story “Would Apple Music really launch without some of the biggest names in music?” asked who is Taylor Swift.

    Apparently when she says jump, Apple’s Eddie Cue asks “How high?” is who Taylor Swift is.

  8. Apple’s judgement regarding the not paying artists for three months trial really surprised me. They’re ridiculously overpriced watch bands and having only one USB-C port on the new MacBook surprised me as well.

    I’m glad they’re doing the right thing with Apple Music, but it took someone to call them out on it. That’s not the company I fell in love with 8 years ago. I hope their judgement gets better.

  9. Greedy! Doesn’t want to give an option for her fans to hear her music for free in a trial unless she gets paid! Maybe three months was a little too long, maybe a month would have been better. Its all about money money money!

  10. Apple Inc. will have foreseen this outcome & I am sure will see it as additional PR for Music prior to launch, so a non-issue. Paying artists for this 3 month trial period will already have been factored into the service offering, plus as already noted is small change to this colossus!

    Apple Inc. are masters in generating hype through the media frenzy channel, without having to pay for it!!

    This move will strike a very positive chord with artists and users who will use the Music Streaming service.

  11. Apple is late to streaming party by at least three years. Remember it bought a company called La La Music years ago because it wanted to introduce streaming. The bunch of characters Apple got from Beats are bozos as was seen on the launch day. What was the idea of planning for years when they could not think that indie artists would object to the free promotion? This creates a poor impression about Apple management. Sorry!

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.