Monday, June 22, 2015

IT IS UNCLEAR WHETHER THERE IS NOW "MAD LOVE" BETWEEN THE PARTIES: So, Taylor Swift posted an open letter yesterday explaining why she was withholding 1989 from Apple Music's streaming service, most notably that during the three month free trial of the service, Apple was paying no royalties to performers or songwriters.  Apple quickly responded by changing its policy, confirming in a series of tweets that "#AppleMusic will pay artist for streaming, even during customer’s free trial period."  No word on if the album will make its way there yet, but, y'know, streamers gotta stream stream stream stream.


  1. Saray9:49 AM

    While I'm glad Tay Tay called out Apple, good LORD did this not need to get this far. Who is the lawyer at Apple who made the decision "hey let's just...NOT pay royalties, cool?" Seriously. Pay your fucking royalties, people. It's not that hard.

  2. Adam B.10:03 AM

    I will just say that I saw T-Swizzle at the Linc a week ago with Lucy, and she puts on a heck of a show. Totally professional, "confessional," and the White Stripe-ified "We Are Never Getting Back Together" does completely rock.

    Also, we had a Mariska Hargitay cameo.

  3. My understanding it was contractual. "Hey, want the royalties (which are higher than what Spotify is paying!) from being on Apple Music? Then you need to give us the first three months royalty-free!" It wasn't "we won't pay royalties," but "waive your royalties so we can launch this more economically." (Still a dumb decision from a PR standpoint.)

  4. Joseph Finn10:42 AM

    I'm an admitted Apple fan, but that was just baffling.

  5. No, I get that it was contractual - it would have to be, since royalty payments are required by (c)law. I'm just saying it was a stupid idea to begin with.

  6. GrooveShark did try the "we don't owe royalties, since we're just connecting you to music on someone else's computer!" argument (a la Napster). Unsurprisingly, it was not successful.

  7. Andrew11:24 AM

    As evidenced by the fact that the major labels all agreed to this 90 day royalty-free trial period, Apple had enough leverage to convince the labels to take the deal. But it's a situation where Iovine and Cue pushed their hand harder than they need to. For Apple, the expense of the 90-day trial period is a drop in the bucket. In aggregate, iTunes Store (music and videos), the App Store, the Mac App Store, the iBooks Store, AppleCare, licensing and other services combined to 9% of Apple's revenues in FY 2014.

    Likely the main reason that Apple pushed for the free trial period, other than it could, is likely that payouts for Apple Music (like Spotify and Beats) is based on percentage of subscription revenue. During the free trial period, there is no revenue filling the royalty pool (which, for all of the subscription services, is allocated based on monthly plays.) Unlike Spotify, of course, Apple has $155 billion in cash. It can afford to pay royalties on a free trial.

    I suspect that there was internal debate at Apple over whether to pay out royalties during the trial period, which is why Swift's Tumblr post moved the needle so quickly. If Apple wants to continue to have exclusive content and have artists come to Apple Music, sacrificing the goodwill from paying out during the trial period seems like a foolishly shortsighted move.