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Apple Confirms 71.5% Revenue Sharing for Apple Music, No Royalties During Trial Period

Monday June 15, 2015 7:22 am PDT by Joe Rossignol
Apple Music iOS 9 IconApple vice president of iTunes content Robert Kondrk has confirmed to Re/code that the Cupertino-based company will share 71.5% of Apple Music revenue with music owners in the United States.

That number will be slightly higher outside of the United States, averaging around 73%, but Apple will pay no royalties during the three-month free trial period in return for paying a few percentage points extra.
"Apple won’t pay music owners anything for the songs that are streamed during Apple Music’s three-month trial period, a bone of contention with music labels during negotiations for the new service. But Kondrk says Apple’s payouts are a few percentage points higher than the industry standard, in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial."
The payments will be primarily sent to record labels and publishers that own the rights to songs and their underlying compositions, meaning that the royalties will not necessarily line the pockets of musicians directly. Artists often have their own individual deals with the record label they are signed to, so their payouts are often dependant on the terms of their contracts.

Apple paying seven-tenths of every dollar to rights holders is the standard rate paid by other streaming music services such as market leader Spotify, although Apple Music may be more lucrative for record labels due to its absence of a free ad-supported tier. Spotify argues that Apple also offers free streaming music through iTunes Radio and its upcoming Beats 1 global radio station.

Apple Music was unveiled last week as an all-in-one streaming music service, live global radio station and social platform for artists to connect with fans. The subscription-based service will be available June 30 for $9.99 per month after a three-month free trial period for iPhone, iPad, iPod touch, Mac and PC. Apple TV and Android versions of the service will be available in the fall.

Tags: Spotify, Apple Music Guide
[ 181 comments ]


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hlfway2anywhere
50 months ago
I'm sure a lot of people will have opinions about the unpaid trial, but as a musician myself, I'd rather give Apple Music users 3 free months of my music with higher payouts indefinitely after the trial than have my music on other streaming services with lower payouts all around. its my understanding that as an artist or label, if you don't like it, you're free to distribute your music elsewhere.

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry. :mad:

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.

Please don't buy Apple Music. Buy all of the music you listen to and do not 'pirate' music and you will be doing a huge favor to the artists you support.
Rating: 14 Votes
Avatar
ugahairydawgs
50 months ago

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry. :mad:

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.


If there's no revenue coming there are no funds to pay out to the artist. It would be different if Apple was running ads during this the trial periods, but they aren't.
Rating: 11 Votes
Avatar
crenz
50 months ago
"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry. :mad:

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.
Rating: 9 Votes
Avatar
citysnaps
50 months ago

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry. :mad:

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.


Then do your duty and make a personal choice to not use the trial period and simply sign up with a subscription on day one.
Rating: 7 Votes
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BillyBobBongo
50 months ago

The payments will be primarily sent to record labels and publishers that own the rights to songs and their underlying compositions, meaning that the royalties will not necessarily line the pockets of musicians directly.


Please don't buy Apple Music. Buy all of the music you listen to and do not 'pirate' music and you will be doing a huge favor to the artists you support.


Go to gigs, that's how you can support artists.
Rating: 7 Votes
Avatar
Thunderhawks
50 months ago

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry. :mad:

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.


And other companies' one month trial does the same, but Apple pays a higher percentage to make up for that.
You viewpoint is shortsighted.
If the free 3 months trial generates a lot of extra subscribers , then the payout is obviously greater and in the end the artists get more money (depending on their deals)
Rating: 6 Votes
Avatar
crenz
50 months ago

If there's no revenue coming there are no funds to pay out to the artist. It would be different if Apple was running ads during this the trial periods, but they aren't.


I disagree with this sentiment. It is Apple's decision to offer certain goods (the music being streamed) without incurring revenue. That doesn't mean they should have access to the goods for free. It's Apple's risk to run their business like that - why pass the risk on to their suppliers? Because they can, not because they ought to.

If Uber were to offer free trial months, would you let them use your car for free?

Reminds me of a typical customer behavior lots of freelancers should have seen: "Hey, you should do this for me for free - if the project takes off, you'll earn lots of money with follow-up projects".
Rating: 5 Votes
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LucasEVille
50 months ago
I really don't understand the issue regarding royalties during the first three months. The only artists that will suffer are the flash in the pan manufactured artists fresh off the cookie cutter record label assembly line who release a top 10 song. I listen to my favorite music often and just as much as when they were first released. Since I will keep listening to those tracks it will continue to trickle money in the direction of the artist instead of a one off album buy.
Rating: 5 Votes
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mdellepi
50 months ago
Still waiting some info as regards non-US launch!
The fact that all Apple sites outside US are still writing a general "Coming soon" message, without date or prices is starting to worry me...
Rating: 4 Votes
Avatar
LucasEVille
50 months ago

"No royalties during trial period" - what a shabby business model where artists are pre-financing Apple's market entry. :mad:

I know this is probably industry standard, and due to negotiations with the labels, but for me, that means I will not buy Apple Music. I simply do not want to support such a business model.


Pay for the yearly package straight off the bat then?
Rating: 3 Votes

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