Monday, June 22, 2015 [Tweets] [Favorites]

Taylor Swift vs. Apple Music

Taylor Swift:

I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple Music.

[…]

I’m sure you are aware that Apple Music will be offering a free 3 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.

[…]

This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. 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.

[…]

These are the echoed sentiments of every artist, writer and producer in my social circles who are afraid to speak up publicly because we admire and respect Apple so much.

John Gruber:

Also raises the question of just how many other top-shelf music will not be available on Apple Music when it launches. After the WWDC keynote, I simply could not get a straight answer from anyone at Apple about just how much of the iTunes Music library will be available on Apple Music when it launches. Part of that might be that they’re still negotiating with some labels and top-shelf acts, but I can’t help but suspect part of it is that they know they’re not going to have everything, and they don’t want to talk about that.

Peter Kafka (via John Gruber):

In the U.S., Apple will pay music owners 71.5 percent of Apple Music’s subscription revenue. Outside the U.S., the number will fluctuate, but will average around 73 percent, he told Re/code in an interview.

[…]

Apple won’t pay music owners anything for the songs that are streamed during Apple Music’s three-month trial period, a bone of contention with music labels during negotiations for the new service. But Kondrk says 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.

Nick Lockwood:

It seems to me with iTunes & App Store, Apple created an incredible opportunity for content creators to be paid fairly, only to squander it.

iTunes raised the price of MP3s from free (pirate) to 99c, likewise the App Store created a way to fairly monetise free Flash games.

But fast forward a few years, and through apathy (or worse) consumers have come to expect apps and music to be free, while Apple profits.

Eddy Cue:

We hear you @taylorswift13 and indie artists. Love, Apple

#AppleMusic will pay artist for streaming, even during customer’s free trial period

Update (2015-06-22): Kirk McElhearn:

Apple doesn’t pay artists or producers. Ms Swift says nothing about record labels, who, other than for the publishing payment, are the ones who collect the money. This distinction is very important when discussing streaming music. All the streaming services try and claim that they pay “artists,” but they absolutely do not.

When an artist gets paid, it’s by their record label. Standard contracts give a recording artist somewhere around 10% of the record label’s income, after expenses, including a producer’s royalty, for their recordings. Streams are already paid very little, and the artists get a fraction of that.

[…]

Note that Apple won’t be paying the full per-stream rate during the trial period. Peter Kafka of re/code spoke to Eddy Cue[…]

[…]

Second, and this is a much bigger issue, 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.

Charles Perry (tweet):

This debate is important to app developers because, whether we like it or not, digital music has been devalued – just as our digital creations have been. In just a few short years people have gone from paying tens of dollars for an album, to paying 99 cents for a single track, to paying pennies or even nothing to stream an entire library of music. This parallels in a rather frightening way the history of the App Store where, in an even shorter amount of time, mobile software that once sold for tens of dollars now is lucky to sell for 99 cents. Just as the music industry, now including Apple, has moved to an “all-you-can-eat” subscription model to bring down the per title cost of music below that 99 cent threshold, it now doesn’t seem unreasonable that a similar all-you-can-eat subscription model might be used to allow per title pricing of apps to fall below 99 cents as well.

Steve Streza:

Taylor Swift yells about getting paid for trials, and @cue responds in hours. App developers scream about sustainability for years, nada.

Wil Shipley:

I’m not the first to say it but gosh it’d be nice to get some love for indie developers as well as indie artists.

First off, indie developers used to make ~50% of our revenue by giving discounted upgrades to existing customers. Apple blew this away.

Second off, indie developers used to be able to talk to their customers directly. Now customers leave 1-star reviews when they need support.

Third off, indie developers don’t have any real recourse to deal with bad reviews that are actually customers asking for support.

pinaceae:

this was a BRILLIANT pr orchestration.

blogs, articles, etc all over the globe were written about apple music, for free. would have been far more expensive to buy all that airtime than this little scandal.

so taylor swift gets more publicity, apple music is now an established brand name, everyone and their dog knows about their pricing model - holy shit. hats off to the apple team, playing the outrage-piano like no other.

I doubt it was planned, but it does seem to have worked out well for both Apple and Swift.

eco:

I’m reminded of the huge success Coke experienced after reintroducing Coca Cola Classic after the disastrous new Coke. When questioned about the whole thing Coke’s president Donald Keough said, “Some critics will say Coca-Cola made a marketing mistake. Some cynics will say that we planned the whole thing. The truth is we are not that dumb, and we are not that smart.”

Update (2015-06-23): Eli Schiff (comments):

Apple’s impulsive response to Swift stands in stark contrast to their treatment of indie app developers, who have been lobbying Apple for almost seven years, requesting Apple reform policies in the App Store to no effect. In particular, Cue’s use of the word “indie” can only be described as a callous slap in the face given the circumstances that indie developers have been facing.

Developer reactions have been mixed: Daniel Jalkut of MarsEdit exclaimed, “Damn, I wish Taylor Swift were also a Mac App Store developer.” Cabel Sasser rightly pointed out that complaints by developers have and will likely continue to be ignored: “As if ANY of us nerds have 1/100000th the public perception pull of a Taylor Swift.”

Developer David Barnard pointed out the utter inconsistency here between music and app development: “Apple is subsidizing a 90 day free trial for Music, but there’s still a rule in the App Review Guidelines prohibiting timed trials for apps.” In other words, musicians complain that they will not get paid—Apple immediately subsidizes them. Developers on the other hand do not even have the option of using that marketing strategy.

Update (2015-07-12): Ben Sisario (via John Gruber):

For each song that is streamed free, Apple will pay 0.2 cent for the use of recordings, a rate that music executives said was roughly comparable to the free tiers from services like Spotify. This rate does not include a smaller payment for songwriting rights that goes to music publishers; Apple is still negotiating with many publishers over those terms, several publishing companies confirmed on Wednesday.

Update (2015-07-14): Michal Lev-Ram (via Konra):

Scott Borchetta—who discovered and signed Swift when she was only 14 years old—told the audience that the conversation actually started between him and Apple in the days preceding Swift’s letter.

[…]

“She literally texted me and said, ‘Don’t be mad,’ with the link,” Borchetta said. “She was in Europe. I responded and said, ‘You don’t have any idea how good your timing is right now.'”

After Swift’s letter made huge waves, Borchetta’s conversations with Apple quickly turned to his (and, presumably, artists’) favor.

Update (2015-08-21): Mitchel Broussard:

In a new interview with Evening Standard, Apple Music executive and Beats co-founder Jimmy Iovine sat down to talk about everything from the launch of Apple Music to the company’s dramatic reversal of its free trial royalties policy following Taylor Swift’s public dismissal of the service in an open letter.

Mitchel Broussard:

In an interview for the September cover story of Vanity Fair, Taylor Swift reveals her thoughts and reasoning behind the letter she wrote to Apple concerning the lack of monetary support for artists during Apple Music's three-month free trial period. The singer notes that she wrote the letter in the early morning hours after a few of her fellow artists sent pictures of their Apple Music contracts.

Oscar Raymundo:

“Apple treated me like I was a voice of a creative community that they actually cared about,” Swift told Vanity Fair. The magazine calls Swift an “Apple Music crusader” with the “willingness to take on tech giants.”

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