Eddy Cue talks about Apple’s change of heart

If you are not a weekend reader, chances are you missed a lot yesterday.

First, yesterday morning, Taylor Swift posted an editorial laying out her thoughts on Apple not paying musicians during the three month Apple Music trial period.

Swift’s editorial got incredible traction. The blogosphere caught fire. Unusual, given that it was a Sunday and Father’s Day (here’s our writeup about Swift’s post and Jim’s plea for Apple execs to give up their salaries for three months to pay those musicians). This was clearly an issue that touched people deeply.

Then, yesterday evening, Eddy Cue posted this bit on Twitter:

#AppleMusic will pay artist for streaming, even during customer’s free trial period

Late that night, Eddy did an interview with Billboard to discuss the details.

On what prompted this decision:

We’ve been hearing a lot of concern from indie artists about not getting paid during the three-month trial period, which was never our intent. We never looked at it as not paying them.

We had originally negotiated these deals based on paying them a higher royalty rate on an ongoing basis to compensate for this brief time. But when I woke up this morning and saw what Taylor had written, it really solidified that we needed to make a change. And so that’s why we decided we will now pay artists during the trial period and we’ll also keep the royalty rate at the higher rate.

Clearly, Taylor Swift’s post was that last straw, the lever that moved the world. But also telling is Cue’s comment about royalty rate. As a reminder, one of the articles that started this whole brouhaha was this post from re/code. In it, Apple’s Robert Kondrk addressed the Apple Music royalty rate:

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 key words here are “in part to account for the lengthy trial period”. My sense here is that Apple thought they had a fair solution. Pay a higher rate, and in the long run, the artist will make more money. The problem with that approach, obviously, is that the artists didn’t buy into it.

The pleasant surprise is that Apple will keep that higher rate in place, during and after the free trial period. Perfect.

Now the only question is, will Taylor Swift return the favor and give Apple Music the ability to stream her massively popular 1989.

Your move, Taylor.

  • ToddHuge

    Eddie is a pragmatist and Apple can afford to be more than fair. Good job Swift.

  • StruckPaper

    Suddenly Taylor Swift is the most powerful person in music. JayZ must be envious.

    • Brian Mauter

      Or Kanye

  • matthewmaurice

    So, I wonder how the person who said in meetings before the Apple Music announcement “let’s just pay everyone out of our own pocket” but was voted down is feeling today?

  • jimothyGator

    Apple clearly has a lot of respect for her. So much, in fact, that they named a programming language after her.

    • JimCracky

      Taylor Objective-C?

  • JimCracky

    If you think that streaming is the future of music, then as a musician you will be under compensated for the rest of your career.

    Streaming models are unsustainable; from the making of music, to its distribution model.

    Streaming will consolidate commercial music to a world of haves and have nots.

    The argument that artists never made money from album sales is only superficially true.

    Soon, your choices will be limited, there will be no financially sustainable model for a broad and vibrant music industry.

    Welcome to Commodity 101

    • Zepfhyr

      I certainly can’t speak for everyone, but the few musician friends that I have make very little from album sales due to poor exposure. They make far more from live performances, wherein they occasionally sell a handful of CDs.

      There is no “one right way” to make it in the business anymore, but there are a lot more people making SOMETHING without performing that used to be making NOTHING, because they didn’t have a record contract.

      • The one thing I hate about this argument is that there are many artists who don’t do live performances for many reasons. Granted this is just one more low-paying contractual agreement in a long line of such things since the days of radio and large music companies (and payola even). The potential to do something better for the artists is there, however, if only someone can figure it out and get around the big companies controlling it all now.

        We could go back to the days of classical music and wealthy patrons commissioning works and hiring composers, but that’s probably not ideal either. 🙂 (Yes, we have some of that now with the likes of Patreon and Kickstarter around…)

        • Zepfhyr

          Patreon is actually my favorite thing to come out of the idea of crowdfunding so far. It’s not perfect, but it is a great way for people to support the things they love in a meaningful way. Not enough to completely fund many projects, but a little is better than nothing.

          I agree that performing is not for everyone (for a variety of reasons). Honestly, though, it doesn’t matter how you sell your music if no one ever finds out that you’re selling it. The real struggle here is balance. How much “free exposure” is too much? Too little? The sad truth about art in this world is how much great art is left completely unknown due to no one ever hearing about it.

          • As a pseudo graphic designer (my wife does the real/much better design 🙂 ) and a web developer, I fully know the “it’ll be great exposure” stuff. And yes, crowdfunding and Patreon in particular is very very good. Like you, I think there has to be a good mix/balance of all this. Sorry I didn’t communicate that part well.

          • Zepfhyr

            No worries. I think you communicated it quite well, I simply clarified. It’s so common on the Internet to have people take up arms and build stanchions for one side or the other, it’s refreshing to find someone trying to find the middle ground.

        • Moeskido

          Marian Call talks about patronage a bit, but at a personal level that relies upon independent artists building their own audience, similarly to how Jonathan Coulton does. Anyone who buys a CD is helping the village poet buy her next meal. I like that.

    • David Stewart

      It would only take about 60,000 subscribers to match the entire revenue of the US recorded music industry.

  • GFYantiapplezealots

    I think Taylor should remove all of her music from iTunes and then see how much money she makes!!! Talk about biting the hand that feeds you.

    • Moeskido

      Oh, please. That wold hurt Apple, too, and they know it. Apple is still selling the majority of her catalog, no?

      She chose to decide how and where her work would be sold. Having earned her clout, she chose to use it to play hardball with Apple.

      Too bad more artists don’t have such ability to negotiate terms with labels, distributors, or retailers.

      • frikova

        No, it wouldn’t hurt Apple. iTunes sales are a small but decent amount of Taylor Swift’s business. Taylor Swift’s music is a grain of sand of what Apple earns.

        • Moeskido

          “Hurt” is a big word. No, Apple wouldn’t suffer the loss of revenue. But not having Swift’s latest work available makes Apple’s offerings that much less interesting to Swift’s fans.

          Apple wants to be a complete solution for people who want to buy or rent music. Losing a any popular artist’s content counts as a deficit for that business model.

      • Idon’t Know

        Apple barely breaks even selling music which is well known. They sell music to sell devices. If someone wants swifts insipid autotuned muzak they probably already have it.

        • Moeskido

          Ooh, burn.

          Your opinion of Swift’s work means nothing here. My opinion of Swift’s work means nothing here. That Eddie Cue probably doesn’t listen to Swift’s work means nothing here.

          Apple wants to be the complete, nonpartisan, ecumenically egalitarian music provider for everyone. Period.

          • James Hughes

            Exactly. I was going to comment but you wrote what I was going to post. It goes beyond that too as far as PR as well. Does Apple want the public at large or at the very least, Taylor Swift fans thinking of Apple in a negative way? Nooooooo. Maybe I am naive in thinking this too, but I really believe Apple is trying to do the right thing here. Even if some people believe they already were, this solution is better all the way around.

  • Moeskido

    Depends upon whether she thinks the new terms are worth it for her. If they aren’t, I hope she says “Thanks, that’s a good start. Keep talking.”

  • adamschoales

    She won’t. Because despite what she claims this is about her and her money. Not her fans. Not other artists. Her bottom line.

    And that’s fine. But own up to that, be honest about it. And just remember people can find your music online elsewhere (for free I might add).

  • StevieJ

    Wow! Only Apple can pull such a Genius an exquisite PR Stunt and hopefully they will get to their desired initial costumer base for the music service because at the end Apple music is more convenient for the artists than Spotify. Please remember the tension between Swift and Spotify.

    • I actually wondered if this wasn’t somehow orchestrated, too, either as a deliberate Apple move to shake the trees or as a stunt between Apple and Swift. She is a pretty savvy and ruthless businesswoman, and Apple, for all the warm and fuzzies I like, is a corporation that wants to make money.

      Things to make you go, “Hmmmm.”

      • StevieJ

        I think is not about profit, is about not loosing the position as leaders in the music industry. People says that apple should have make a streaming service long time ago but they forget how apple plays; they wait for others to build the market while watching and developing in secrecy then Boom a “Me too, a little late” reinvention that shakes everything.

      • Moeskido

        It’d be interesting if that was true.

  • Geek Life 3.0

    The funny part here? As an indie artist – and along with virtually every indie artist is know and work with – I had no problem at all with not being composted for the three-month trial. Apple’s end game is to get traction for paid streaming to the masses, and EVERYONE who makes music wins in the end. That three months was an investment – and a small one – to stake a claim to a much, MUCH bigger payoff over the long term – especially for indie creators who can get the exact same ride as the big label acts for no overhead and no obligations to third-party publishers or distributors. We were STOKED.

    A group of us sat around for a few hours after our assorted sets at Supercrawl in Hamilton this weekend and all came to the same conclusion – Swift is greedy, period. She would still make buckets of coin from sales and other sources for those 3 months, and just wanted more more more. We wouldn’t make a dime … and didn’t mind at all. Taylor Swift can wrap herself in the flag of “standing up for the indies” all she wants, but she has no clue and no frame of reference for artists like us.

    That letter came straight from the wallet, not from the heart.

    • Moeskido

      Did you and your colleagues have a choice of whether to participate in supporting that trial?

    • James Hughes

      Regardless of her intentions, isn’t this situation still better for you and your group? I don’t see the downside of the artists being paid now vs. not being paid before. How is this bad for all of you?

  • The thing is, when this started to hit the fan as indie labels began to grumble, I thought to myself there is no way Apple isn’t going to pay something for those three month trials. After all, they paid U2 for all the “free” albums they handed out, and they definitely have the cash on hand to do it. So, honestly, I think Taylor Swift is getting a lot of credit for something Apple planned to do all along but just hadn’t communicated very well — and, let’s face it, they must not be commuincating their Music very well since everyone seems to write all the time how confused they are about it. (I disagree about that as well, but maybe I’m just looking at it all as simply as they announced: Music is for streaming anything in their catalog, streaming what you own, and listening to a radio station to learn about new music or get interviews and such.)

  • rogifan

    Billy Corgan ripped Apple a new one on CNBC today. If artists were supposed to have a different opinion of Apple because of bringing Jimmy, Dre and Trent on board it doesn’t seem to be working. Apple is seemingly as tone deaf as ever.

    • Idon’t Know

      Billy who?

  • electric_larry

    Not sure how I feel about how all of this played out, positively or negatively, but It does seem to have emphasized the growing irrelevancy of record companies. The artists and Apple had to go around them to work this thing out. What are they even there for except to dip their hand in the till?

  • TWF

    She won’t; its about money. That’s why she only pulled the latest album and not all of them.

  • the Ugly Truth

    …could have avoided this; don’t they know people like swift gratification?

  • Billy Razzle

    Apple should just let artists self publish on iTunes/Apple Music for a 70/30 split like they do apps. Then let’s see what the record studios think about that.