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.
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.
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?
“When Apple charged the cards for subscriptions made during the trial period, the artists would be paid.”
What a crock! Yes, those who subscribed will pay but how about all of those who recorded these free songs and have no intention in subscribing? How much money was lost to the entertainers there?
Most will record (or purchase) as song only one time....period.