Artist Payments For Apple Music's Trial Period

The world has been in an uproar over Apple Music's free trial period over the last week or so, and now that the company has agreed to pay artists and songwriters, the only question that remained was how much it would pay to artists and composers.

That question has finally been answered. Apple will pay around 0.2 cents for every play during the free trial period, an amount equivalent to what Spotify pays on its free tier as well.

Apple had originally proposed paying out 71.5% of its income instead of 70% after the trial period to make up for the shortfall, but the straight payment per play felt fairer to everyone involved.

This amount will cost Apple some money, but with $178 Billion (yes, with a B) of cash on hand, it can afford it.

The fact of the matter is that Apple doesn't have to make money with Music since its business thrives on hardware. This puts it at a distinct advantage over other services like Pandora and Spotify that rely on the income to keep the lights on.

The royalty dustup was actually a good thing for Apple Music in that it kept the service in the public spotlight for another week after the announcement, proving that there's no such thing as bad publicity.

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Google Introduces A Free Tier For Its Play Music Service

Google's Play Music streaming service is trying to take some of the thunder away from the Apple Music launch by announcing that it will offer a free, ad-supported tier to users who are adverse to paying $9.95 a month for the paid subscription.

Unlike the paid tier, users won't be able to choose their own songs to play on-demand, but will instead play songs from curated playlists in a radio-like fashion. This isn't new to users, as it's also the way that services like Pandora and iTunes Radio work.

What's a little different is how the playlists are categorized. Listeners can choose between lists such as Driving or Working Out, or even "What would Beyonce do?", so it will be interesting to see just how well the playlists fit into those activities.

The technology used in this tier basically comes from the now defunct Songza, which Google acquired last year.

The new free tier might not be enough to counter the boulder that is rolling downhill in Apple Music, but at least it made some news as well as made people aware of the Play Music service again.

That said, the real news will come later in the year when Google's YouTube Music Key is officially introduced, which is expected to have a much larger impact on music distribution.

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Apple Spins, Taylor Wins

You have to hand it to Taylor Swift - when she speaks people listen. After an open letter criticizing Apple for not paying artists and songwriters during its free 3 month trial period on Sunday, the company has decided to do the right thing and pay up.

While Taylor Swift has a huge audience, this amounts to more damage control by Apple than anything. The noise on the subject from indie artists had begun to swell last week in the news and was getting louder by the day, but Ms. Swift’s argument that artists and songwriters should be paid put it over the top.

The one thing that Apple can’t afford right now is any negativity floating around Apple Music, and with the launch only a few days away, it was imperative that the story turn positive. Inaction would have caused the negativity to linger and even grow, and the company needed to eliminate any reason for consumers not to try the new service.

The fact of the matter is that with a war chest of $178 billion of cash on hand, the money paid to artists and songwriters over the trial period is a drop in the bucket that the it could easily absorb. It’s also a fact that the Apple could have done nothing and survived the inevitable blowback that would happen as well.

But give credit where credit is due, the biggest music star in America took on the biggest company in the world and won.

It will cost Apple a little money that it should easily recoup should Apple Music reach the expected subscription levels, but in the end everyone is a winner with this decision. 

Consumers will find a larger catalog filled with many more of the artists they love, artists and songwriters get paid for their hard work, as do the record labels and publishers, and Apple Music gets some positive spin right when it needs it most.

Originally posted on Forbes.

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Soundcloud Streams To Be Limited

In a move that may upset many users, SoundCloud will introduce limits on the number of streams outside it's network as of July 1st. That means that any song played via a third-party app will be limited to 15,000 streams in a 24 hour period.

SoundCloud said that the move was to counter "an increasing number of applications that abuse content."

To be clear, this does not affect songs that are embedded and streamed directly from the SoundCloud app. The limit only affects its API.

Many developers who use the SoundCloud API are up in arms because they were only given 15 days notice, which they claim isn't enough to reprogram their app.

The service is facing increasing competition with Apple Music about to come online, and YouTube's Music Key waiting in the wings, so this isn't a great time to be upsetting anyone in its ecosystem.

You can read SoundCloud's announcement directly here.

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Indie Labels Have It Drastically Wrong About Apple Music

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.

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What Apple Music Means To Artists

Here's a nice infographic from TakeLessons.com shows the potential of Apple Music. It's just a little outdated in that Spotify's numbers are now much larger (75 million subscribers of which 20 million are paid).

Also keep in mind that the royalty rates at the bottom of the page can be a bit deceiving in that they're only averages. It's difficult to determine the exactly rate per stream because it's different in each country, is different for different tiers, and in some cases, even based upon the marketshare that the artist has.

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Your YouTube Channel Checklist

If you have a YouTube channel (and if you don't you really should create one right now) you can optimize it by utilizing its features to the fullest. Here's an excerpt from my Social Media Promotion for Musicians book that outlines the things that you should be sure are taken care of.

"☐ Branded Channel Art

The channel art is the banner at the top of the page where you can display a customized graphic. YouTube suggests this graphic be 2560 x1440 pixels so that it works on all types of televisions, tablets, smartphones and computers, but what YouTube will show on most computer browsers is 1546 x 423. This is known as the “safe area” and is where you should place any critical graphics information since anything outside that area might not show up on a device with a smaller screen. The graphic can be up to 2MB and in either a JPG or PNG format. The Channel Art upload section is accessed by clicking on the pen icon on the top right of graphics box. You can access a template for the channel art, as well as a design tutorial, by clicking on “How to create channel art” at the bottom of the upload pop up box.

☐ Channel Description

You access your channel description from the About tab underneath your channel name. After the About box pops up, select the pen icon on the upper right to edit. From here you can enter or edit the description. Be sure to include all the information about your channel in the description, such as what to expect from the video content as well as who’s involved (like the members of a band).

☐ Website link

The website and social medial links are accessed in the same manner as above; through the pen icon on the top right of the box. Here you can add links to websites, blogs and social networks. The first weblink you entered will appear on the lower right side above your channel art, as will the social network icons. The others will appear in the About box.

☐ Social Media Links
Make sure that you connect your Facebook and Twitter accounts to your YouTube channel.

☐ Channel Icon (picture)

The avatar is either a picture of you, your band, or product that appears on the upper left of your channel page. The avatar can be up to 800 x 800 (you’re able to crop it) and 1MB in size, although the smaller the file size the better, since it will load faster. The picture is stored with your Google+ account, and you can also access any pictures stored there to use as your avatar.

☐ Featured Video or Trailer

Another thing that you can do is feature a particular video or trailer at the top of the page when someone who is unsubscribed visits your channel. Simply select the pen icon on the top right of the box, select a video, then hit save. You can see what both subscribers and non-subscribers see by toggling Unsubscribed trailer and Subscriber view next to the edit icon.

☐ Playlists

YouTube allows you to create multiple playlists, which can have a great influence in how your fans consume your content. If you have a fair number of videos, you might want to create different playlists for different parts of your fan base, since each may have a different desire of what to watch. While your superfans will want to see everything you upload, your casual fans may be more selective. You can select the order and layout of these playlists, or create a new one, by selecting the edit icon on the top right of the playlist box."

It's easy enough to have a YouTube channel without using many of the above features, but it will be so much more powerful if you do as it connects with the rest of your online presence.

You can read more from Social Media Promotion for Musicians and my other books on the excerpt section of bobbyowsinski.com.

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Facebook Changing Its News Feed Algorithm Again

Just when you thought that Facebook couldn't get any worse in distributing your posts to your friends and followers News Feeds, it goes and changes its algorithm yet once again.

Right now your News Feed is determined by how much a post is liked, commented on, or shared.

The company will now measure how long that you look at posts, photos and comments in your feed to determine your interest in certain content as well. The thinking is that the more time you spend on a post, the more likely your friends will like to see it as well.

Of course, the main problem with its current algorithm is that it's cut down on the number of followers that you can reach with any one post. 5 years ago a post would be seen by all of your friends and followers. 2 years ago that was down to just 15%. This year it's around 2%.

Of course, you can still reach all of your friends and followers by promoting a post (meaning, paying for distribution), which is what Facebook really wants.

It's probably too early to tell whether this will be a positive or negative, but my bet is that for most artists, it will fall on the negative side. Of course, the best way around it is to post really compelling information that people spend a lot of time reading.

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Music Matters - A Movie About The Payola Law

Payola, which occurs when a record label pays to have a song played on the radio, was outlawed in 1960, but a new documentary called Music Matters tries to make a point that the law was created for the wrong reason.

The film states that it was actually a racist backlash against Elvis Presley, since he was singing a white version of songs made by black artists. The film also states that if payola was still in force, market forces would self-regulate the industry, so a bad song wouldn't play long on a station no matter how much the label paid since it would hurt the station's ratings.

Whether you agree or not with the premise of the film, it's still worth watching below.

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A Look At The Streaming Revenue Pie

Here's an interesting infographic from Statista that shows exactly what the online digital revenue pie looks like as compared to 2008.

At the end of 2014 there was about 28 million paid streaming music subscribers, which has now topped 41 million so the numbers are quite a bit larger in 2015.

As you can see, downloads still owns 52% of the market, and while that will undoubtedly decrease in 2015, it will still remain a substantial piece of the puzzle for at least a few more years.

What is growing is the number of people that are adopting streaming, either via the free tier or paid subscription, and this looks to really take off now that Apple Music has launched.

What's interesting is that 15% of the market is still made up of ring tones, ring backs and various other technologies that we don't even consider these days, but are still generating significant income.


You will find more statistics at Statista

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Like A Coiled Snake Spotify Strikes Back At Apple Music

If you thought it was a coincidence that Spotify released new and much improved subscriber numbers directly after the big Apple Music announcement at its World Wide Developer Conference, then you haven’t been paying attention to what many are calling the “Streaming Wars.”

At least in the short term, Spotify is still the market leader in the interactive music streaming space, and the company did its best to put an exclamation point on that fact by providing a lot of new information, strategically waiting a day for the Apple Music furor to die down a bit to steal a little thunder for itself.

At the end of last year, the company touted 60 million total subscribers, with 15 million of them paying the going rate of $9.99. That number far outpaced its closest rival in Deezer, with only 6 million paid subscriptions, and others like Rdio and Tidal that fall below the 1 million mark.

But Spotify’s new user numbers show a striking increase in a short time, with the company announcing it now has 75 million users, of which 20 million are now paid subscribers. This makes the company a major player even when compared to the non-interactive streaming side of things, as Pandora only sports 79 million total users, with the vast majority of those using the free tier. 

While user numbers are solid proof of growth, another part of the same announcement may be even more important. The company also reported another round of funding for $526 million, which places its valuation at around $8.53 billion (keep in mind that it has yet to turn a profit). 

Among the partners that invested in this round include Swedish telecommunications firm TeliaSonara AB and Abu Dhabi’s sovereign wealth-fund, so there are some deep pockets with a large stake in the company’s success. Read more on Forbes.

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Apple Pushes A Fake Indie Artist

The Real Loren Kramer

While Apple was introducing its new Music service on Monday at the WWDC, it made a point of saying that indie artists would be prime contributors to the service. That's when Loren Kramer was introduced and given about 10 seconds of prime airtime that any indie artist would die for.

The problem is that Kramer seems to as close to a true indie artist as a Blackberry is to an iPhone.

With the world filled with hard working artists slugging it out gig after gig, recording after recording, Apple instead chose an artist who hasn't played many gigs and has no presence on iTunes, Spotify, Facebook, or even a web page. He has a Twitter feed but that only went live right after the announcement.

What Kramer does have going for him is a manager who used to work directly for Apple Music head Jimmy Iovine back in his Universal Music days, and a whole list of privileged friends thanks to a wealthy family that sent him to exclusive Hollywood schools. Kramer is in fact a visual artist who's the editor of an art magazine called Megazine, hardly what you'd call indie music credentials.

Apple really whiffed badly on this one, and while it might not rise to the U2 fiasco of last year, it still proves that the company is now surprisingly tone-deaf to what's currently going on in music.

This could also bode poorly for the thousands of indie artists that were hoping that Apple Music might somehow become a new source of income. If the company couldn't get something as simple as this right given the thousands of worthy candidates available, then it really shows where the company's priorities lie.

So good for you if you're on a major label, Apple Music will welcome you with open arms. If you're an indie, not so much.

You can read some excellent posts about this in Digital Music News and The Next Web.

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