Monday, June 22, 2015

Indie Labels Have It Drastically Wrong About Apple Music

Apple Music Indie Labels image
The latest flareup in the streaming music wars has the indie record labels in an uproar over the fact that Apple won’t be paying royalties for the free three month trial period that consumers have before deciding whether they want to subscribe to Apple Music or not.

The indies major contention is that their margins are so small that three months without royalty payments will put them out of business. While on the surface that seems like a reasonable argument, it misses the mark of what the real issue is - the lack of corporate respect.

While no one but the label execs themselves know if the majors have the same no-royalty deal in place for the trial period, rumor has it that the music giants are not being paid either.

Either way, it matters little. Both the majors and indies aren’t currently getting paid a dime from Apple Music and those companies aren’t rushing into bankruptcy court, so another three months will make little difference.

The fact of the matter is that no one is taking in any revenue during the trial period. Apple isn’t charging for advertising like the other freemium tiers of its competitors, so it’s a wash. No one makes money, no one loses any (although Apple does absorb the operating costs).

The trial period is a necessary evil in that if you don’t give consumers a taste of the service, there’s no way they’ll plunk down their cash on a subscription (even if it is made easier by the fact that Apple already holds their credit card information). If you don’t water the garden, it’s now going to grow, and that garden could potentially put a lot of food on the table so it’s best not to starve it just when it’s beginning to spout. Read more on Forbes.

UPDATE: Apple has decided to pay artists and songwriters for the trial period. Read more here.

1 comment:

Peter McDonald said...

Indie labels and artists should be more concerned over the disparity of royalties paid. Major labels can and have demanded a higher payment per play than indie labels.

There is no reason this should be the case larger artists naturally get more overall already due to the increased play count they receive.


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