Apple has finally struck a deal with independent music labels, agreeing to pay 0.2 cents for every song streamed through the upcoming music service's three-month free trial period.
The report comes out of the New York Times, which cites music executives who say the amount is roughly the same as what Spotify pays for every song streamed through its free, ad-supported tier. They say Apple will also pay the same 0.2 cents to all music labels, including Universal, Sony and Warner, with whom Apple has struck deals just days before the announcement of Apple Music on June 8.
The 0.2 cents does not include a separate amount that Apple will pay music publishers for songwriting rights, but Billboard reports Apple is still finalizing the negotiations with the publishers.
Following a strongly worded rebuke from Taylor Swift on Sunday, Apple swiftly took a 180-degree U-turn and agreed to shoulder the cost of the three-month free trial. On Tuesday afternoon, Apple had drummed up a new proposal that is now deemed satisfactory by the Merlin Network and Beggars Group, two of the biggest independent music groups representing more than 20,000 artists. Beggars Group, which carries four labels, was influential in jumpstarting the careers of artists such as Adele, Radiohead, Prodigy and Arcade Fire.
"Over the last few days, we have had increasingly fruitful discussions with Apple," Beggars Group founder Martin Mills tells the Times. "We are now delighted to say that we are happy to endorse the deal with Apple Music as it now stands, and look forward to being a big part of a very exciting future."
Apple is expected to launch Apple Music in more than 100 countries on Tuesday. Unlike Spotify, the new on-demand streaming service will not have a free tier but will instead charge customers $9.99 a month for a single user or $14.99 for a family of six. However, Apple plans to promote the service with a three-month free trial, which has become the subject of controversy in the music industry after Apple said it would not be paying indie music artists during the trial. Instead, Apple proposed a higher royalty of 71.5 percent of the artist's total revenue to compensate for the lost earnings during the trial.
Independent labels have protested to no avail, revealing that Apple only sent them a proposal on the day of the announcement of Apple Music itself, while having negotiated with the big three for months. The Times' sources say Apple gave the indie labels only five days to approve the proposal with no room for negotiation. The turnaround came when Swift posted a blog post airing her sentiments about the issue.
"We don't ask you for free iPhones," Swift says. "Please don't ask us to provide you with our music for no compensation."
Photo: Peter Zuco | Flickr
