Apple Streaming Music
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Posted on 06/22/2015 7:54:55 PM PDT by Swordmaker
There's no more bad blood between Apple and Taylor Swift.
After the singer took the hardware giant to task in an open letter, for deal terms specifying that no labels would be paid during a user's free 90-day-trial of Apple Music, the company backed down and changed course, telling Billboard Swift's words hit home.
How long had they been contemplating the concession and will Apple, a company currently valued at $700 billion, eat the cost at its own expense? Those were just a couple of the questions we had for Apple senior vice president of internet services and software Eddy Cue.
Apple Changes Course After Taylor Swift Open Letter: Will Pay Labels During Free Trial
Was this decision prompted by Taylor Swift's letter?
Cue: 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.
Did you reach out to Taylor?
Cue: I actually did talk to Taylor today and I let her know that we heard her concerns and are making the changes. She's on tour in the U.K. and she was in Amsterdam. I wanted her to hear directly with from us. We've had a long relationship with Taylor.
How did she react?
Cue: She was thrilled and very thankful. You can tell by the letter she wrote that she's a great admirer of Apple and we've done a lot of great work together. So she was really excited to see how quickly we responded and thrilled that we did.
Wait, Apple Music Could Be Great for Indie Musicians? Under Heavy Fire, a Counterpoint: Op-Ed
Is Apple eating the cost?
Cue: We're certainly paying for it yes. We're all in. But we view this as: music is a part of our DNA -- we talk about it a lot. We love music and we've always strived to have great relationships with the music community and we have a deep respect for what they do. We're in this for the long term.
What was the original thinking behind asking the labels to agree to free for 90 days?
Cue: First thing is we're promoting great music, so we wanted to make sure everyone had the opportunity to try it out and have experience with it so that's what the trial period is there for. Once the trial period is over, they would [either] convert to a paying customer or they would decide that the service is not for them and so we thought that by giving them that time, people would see this revolutionary streaming service, the first worldwide live international radio station, how fans can connect with their favorite artists...
Once you read the letter, what were the next steps? How did the decision get made?
Cue: The good news about that [Apple CEO] Tim [Cook] and myself can make decisions very, very quickly by talking to each other. It was something we had already been discussing for the past week.
What was Jimmy Iovine's reaction?
Cue: Jimmy was very supportive of our decision. What we've always tried to do is compensate artists along with making it great for bands and customers.
Has the PR battle surprised you?
Cue: Going through all of this to get to the right place and get a great service to fans, that's the really important part.
Does Taylor Swift now speak for all artists?
Cue: Well, we've heard from other indie artists, but she's a great artist herself, and it's great when she speaks up on what her positions are.
Translation: “We got caught with our johnsons exposed. Now please excuse us while we zip up.”
L
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Exposed Johnson’s, ya say?
Shake It Off! *SNORT*
No, Apple had always intended to pay, just when the revenues were booked. That's a standard practice in business. This was KNOWN, and specified in the agreements. When Apple charged the cards for subscriptions made during the trial period, the artists would be paid. This was an argument from people who wanted their money NOW, not later. The agreements even stated that they would received GREATER compensation because of the delayed payment. This is a idiotic kerfuffle about not much of anything. Now Apple has decided to go ahead and pay them now AND still pay them the extra money.
All the crap she takes, too...
Yet she’s the one who stood up...
LOL, Taylor spank.
Fun being a little bird on a tree watching giant dinosaurs fight.
That’s not how I read his response, but your comparison to revenue recognition is hogwash. A company’s obligation to pay its suppliers is totally separate from when it receives payment from its customers. Apple can provide free trial service as long as it wishes, but in no way does that imply their content providers also agree to such terms.
There were some FReepers last night who seemed to think Swift was going to get her clock cleaned in this disagreement. Nope. She’s not just a pretty face. She’s pretty business savvy too.
Apple> Once the trial period is over, they [trial users] would [either] convert to a paying customer or they would decide that the service is not for them...
Sword> Apple had always intended to pay, just when the revenues were booked... When Apple charged the cards for subscriptions made during the trial period, the artists would be paid.
What about the trial users who "decided the service is not for them"? All they wanted was a freebie deal. Their cards were not charged, and they didn't make any subscriptions during the trial period. They got three months of music for free and then walked away.
We both know there would be LOTS of people who would do that.
So... Who was going to pay the artists whose music was taken for three months by the freebies who walked away? I haven't read that Apple intended to fund that loss, but that seems to be what they've agreed to do now.
What am I not understanding about the handling of the walk-aways?
Seems Apple was planning to cheat a lot of artists but got caught. I guess they thought it was okay for them to cheat people.
She’ll write a song about it! It will go platinum. LOL!
I have seen absolutely nothing to support this comment from you. Apple NEVER intended to pay the artists or indies even a dime during the trial “free” period.
What are you smoking? This very article debunks what you say.
You are simply not understanding that Swordmaker got this “all wrong.”
Exactly.
Cheat!
Cheat!
Cheat!
That was in the agreement.
So..... do you have a copy of the ‘content provider’s contract’ ?
Apple would, out of revenues from those who did pay subscriptions. Apple would wait for profits to manifest. They can afford to. Generally Accepted Accounting Practices (GAAP) rules apply to this, just as they do to all corporate income and expenditures. . . that's what some on here and elsewhere simply do not understand. Several years ago, Apple was forced to initiate a $2 charge for an upgrade that had been free before the Sarbanes Oxley laws were passed. . . The license as it existed did not allow them to give it away and some stockholders filed a lawsuit over giving it away on the grounds it caused a loss of stockholder return. The license Apple was offering the artists was a greater payment later for a delay in payment during the trial period.
As usual, there are people who would prefer to HATE Apple and obfuscate the issue than to understand what Apple was offering. . . which was a pretty good deal.
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