Apple Won’t Pay Any Labels During the Free Trial Period of Apple Music
It was widely expected and now it's confirmed: During the three months Apple will allow subscribers to use Apple Music for free, the company won't pay a cent to any music labels providing music to the streaming service.
Last week, a proposed contract between Apple and an anonymous indie label leaked, showing that Apple is asking indie labels to forgo payment for three months, as had been reported for weeks. Then, in an interview with Re/code, Apple executive Robert Kondrik confirmed the company won't pay major labels during the three months, either.
Kondrik said the three months without payment will be offset by a higher per-month payment rate than what other streaming services are offering. He said Apple will pay 71.5 percent to labels, versus Spotify's 70 percent.
Like Spotify, Apple essentially makes the argument that if the service grows at the rate expected (Apple's rumored initial goal is to hit 100 million subscribers) the 71.5 percent it will pay to labels will seem like more than a fair trade for three months of free use.
Since there are only three major labels, observers shouldn't expect to hear much of their perspective on Apple's payment offers. The indies, however, are a different story. We reported yesterday (June 15) that the largest indie label group in America, A2IM, is encouraging its members not to sign Apple's contracts because of the three-month trial period. And Digital Music News, relying on unnamed sources, says big indie labels are planning to boycott Apple Music.