That’s because we still don’t know what the royalty rates will be for artists when customers are in the trial period and once they’re paying subscribers. The Wall Street Journal learned that Apple won’t necessarily be paying artists the same amount during the trial period: the company says that they will pay artists a higher rate once subscription fees start rolling in. A higher rate than what?
Here’s the problem: the proposed rate of 71.5% means that Apple would take 71.5% of the money they take in for subcription fees and redistribute them to artists. That’s great, once they have paying subscribers, but Apple is offering to pay artists royalties on $0 income.
Say that Apple took in $1 million from subscriptions in a month, and 50% of all songs played on the service were by Taylor Swift, after the month was over, Apple would cut Taylor a check for $357,500. What do they do with no income to use for the figures?
That would be in line with what competing streaming services do. For example, competitor Spotify pays artists discounted royalties when they’re offering discounted subscriptions to attract new paying customers, and even more discounted royalties when a free (ad-supported) subscriber listens to a song.
Apple will probably just make up a fixed amount per song play for early Apple Music artists. Will artists go along as long as it’s more than zero, or will they refuse to take part in Apple Music if they don’t like the payment structure once it’s announced?
Apple Music launches on June 30. We’ll find out then.
Apple Yet to Disclose Payments for Artists [Wall Street Journal] (via 9to5Mac)
by Laura Northrup via Consumerist
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