A Swift Backtrack

Posted: June 23, 2015

Taylor Swift’s stand resulted in Apple changing its earlier decision not to pay artists any royalties during a 3-month free customer trial of its Apple Music streaming service.  In a message posted on her website on 21 June 2015, Taylor Swift set out the reasons why she was withholding her album, 1989, from Apple Music, stating “We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.”  Credit is due to Apple, as less than a day later, faced with the prospect of being without one of 2015’s biggest-selling albums so far, Apple senior vice president, Eddy Cue, announced on Twitter that the company had reversed its decision and would pay artists during customers’ free trial period. Cue added that Swift’s message, in combination with complaints from other artists and indie labels, had made Apple change its policy.

It was previously reported that Apple had planned to pay music owners 71.5% of Apple Music’s subscription revenue after the trial period ended, which Cue said was a few percentage points higher than the industry standard, to account for the longer trial period.  Now, Cue has stated that Apple plans to pay rights-holders on a per-stream basis. The New York Times has reported that Apple will pay 0.2 cent for the use of recordings, which will apply to all labels. This represents a rate that music executives reportedly said was roughly comparable to the free tiers from services like Spotify. Apple is still negotiating with many publishers and this rate does not include a smaller payment for songwriting rights, which Billboard anticipates to be $0.00047 per stream based on figures giving labels 58 percent of revenue, versus publishers’ 13.5 percent

This decision by Apple has been widely hailed as a win for the music industry and rights-holders in the battle to convince users that music should be paid for. It is also seen as testament to Apple’s leadership team, who have shown a willingness to listen and reverse a previous decision quickly. It will be interesting to see what changes, if any, Apple plans to make to the percentage of subscription revenue it pays to rights-holders after the trial period. 

[updated on 25 June 2015]