The Apple Music dilemma: Who pays for a free trial?

Update: Apple's Eddy Cue has announced Apple Music will pay artists during free trial period. So they went for option 2, below.

For the first ninety days of Apple Music, customers won't be asked to pay anything, and neither Apple nor the music industry — including artists — will be getting paid. Customers will get all of Apple Music for free, while iTunes supplies the service and the industry — including artists — supplies the content with no up-front remunerations. That's led to some artists declining to participate and voicing their concerns through the media, traditional and social.

Andy Heath, the chairman of UK Music, spoke with The Telegraph:

Mr Heath told The Telegraph that to his knowledge no British independent labels have agreed to Apple's terms or intend to on grounds they will "literally put people out of business"."If you are running a small label on tight margins you literally can't afford to do this free trial business. Their plan is clearly to move people over from downloads, which is fine, but it will mean us losing those revenues for three months.""Apple hasn't thought this through at all and it's not like them. They can't spring a contract like this on us three weeks from release. "They are basically putting all the risk on the labels. People will say 'oh but you're on Spotify'. Well yes, but we get paid for that.""Of course my members want another player in the market but not at the risk of their survival. Apple is sitting there with this massive pile of cash and saying to us, 'you help us start a new business'. Well I just don't think it is going to happen on these terms.""I think the dynamic here is nothing to do with the royalty rates but there are elements of these deals that are just too difficult for smaller labels to do. It will literally put people out of business. Smaller labels would be completely screwed. Apple just has to move on this."

Hit recording artist Taylor Swift expressed her concerns on Tumblr:

I'm sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the service. I'm not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company.I realize that Apple is working towards a goal of paid streaming. I think that is beautiful progress. We know how astronomically successful Apple has been and we know that this incredible company has the money to pay artists, writers and producers for the 3 month trial period… even if it is free for the fans trying it out.Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. I say this with love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the progression towards a streaming model that seems fair to those who create this music. I think this could be the platform that gets it right.

For the company's part, Apple's vice-president of iTunes Content, Robert Kondrk, told re/code:

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.

I certainly don't know enough about the industry and its dynamics to speak with any authority on what should or shouldn't be happening. There don't seem to be many options, however, for how to do it differently:

  1. Change the trial period from ninety days to somewhere between zero and thirty days. At zero days, the recording industry would start getting paid immediately, though it might hurt adoption of the new service since there's no free tier. (Competing services seem to offer free trials and tiers.) At seven, fourteen, or thirty-days, the recording industry would get paid sooner, but would it risk some customers not getting as invested in the service as they might with a longer trial?
  2. Have Apple subsidize all or part of the ninety-day trial. Since Apple has over a hundred billion in the bank — some of that domestic, most of it international — they could afford to pay artists out of the company's own coffers during the trial period. That would certainly make the music industry — especially artists — happy. Apple is a for-profit company, however, already donating the services side of the business for free for those ninety days. Apple is also a frequent target for anti-trust litigation, already having been sued over eBooks and already being investigate for music. Could subsidizing longer than industry standard Apple Music trials be seen as unfair competition?
  3. Create a conversion bonus when customers start paying. Although Apple says the company will be paying higher rates to compensate for the longer trial, perhaps the music that customers listened to during the free trial could receive additional compensation once the customer converts to paying. It would still mean a period of non-compensated content, and a higher cost to Apple who's already providing the service at no-cost, but could it better reward the content that is participating in the trial?
  4. Let artists opt-out of the free trial. That way, anyone who feels like they can't afford to contribute their music as a way to secure subscription revenue sharing going forward can withhold it at first. (It seems like Taylor Swift and others are doing this already by excluding, for example, recent albums.) If all the desirable music is absent from the free trial, however, could it also risk significantly hurting conversions to the paid version?
  5. Show ads during the free trial. Ad-supported free trials and tiers aren't uncommon in streaming music services. They also haven't proven to be successful revenue generators, or great experiences for anyone. Apple will be using ads in News, though, so could the company and the industry figure out a way to use them in Music?
  6. Let customers who choose to start paying at any time. It may or may not be planned like this already — I don't know — but Apple could let any customer who chooses to skip any part of the free ninety-day trial and start paying immediately. That way, if anyone wanted to make sure the music industry received more compensation, they could do so. How many people, however, would choose to pay before they absolutely had to?

Regardless of what happens, all of this highlights just how tough a problem streaming music really is to solve. That it hasn't been solved to many people's satisfaction yet is an even bigger indicator.

One additional note — I've been using the term "music industry" here because "artists" isn't really accurate. It's not "artists" that aren't getting paid, it's the entire industry, including labels and other middle-people and brokers. And those middle-people and brokers are never thrown under the bus anywhere nearly as hard and repeatedly as they should be.

Traditionally artists have been screwed by labels, and it's so bad they'll try to get the compensation they truly deserve from anyone and everyone else. Even if Apple did choose to subsidize the ninety trial completely, how much of that money would really end up in the hands of the artists?

The system, in general, is archaic and broken, and until it's fixed, it's hard to see anything helping artists directly outside the traditional revenue generators of live performances and ancillary merchandizing.

In an ideal world, the Taylor Swifts, Trent Reznors, and indie artists would be working with Apple to create a way for them to make sure artists get paid better and more significantly, in general, even without labels.

A streaming service that pays better, and more directly to the writers, producers, singers, and musicians, sounds like the solution almost everyone wants.

Unless and until that happens, this question is going to be hard to solve: Who pays for free trials?

Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.

  • Publishers and Composers are also out in the cold.
  • "Publishers and Composers are also out in the cold." Are you sure? Because for radio stations, licensing music includes royalties to performers as well as composers and publishers. I can't imagine online performance licenses to be any different.
  • During the trial period, the publisher and composers are also out in the cold. It's not just the artist.
  • "Are you sure?" Yes.
  • Well, imagine it. Because the mediums are different and governed by different contracts. I sure appreciate your "guess", however. Sent from the iMore App
  • I think the artists are being disingenuous here if you look at e.g. Spotify's streaming compensations. According to they add up all the revenue from Ad-streamers+Premium Income and then divide it out over their streams. Then if I look at Spotify as a user I could currently sign up for a 60-day free trial. I would be streaming music and adding no ad revenue or income revenue for those 60 days = no compensation for those 60 days for what I stream. Seems the same as Apple's 90-day free trial apart from the duration. It's just going to be more obvious because for the first 90 days of Apple Music there won't be any paid streamers.
  • I would even add that right now, Spotify is promoting a $0,99 for three months of premium access bundle... That's hardly a lot more money than $0 for 3 months...
  • No, they don't. Spotify calculate revenu separately from ad-accounts and premium. That's why rate per play can be different for different songs.
  • I'm sick of this discussion about streaming services. If you want to listen to someone's music, pay for it. End of. If you don't then you're stealing. Remember, there are very few musicians who make it to the top. If you don't like the local car mechanic, you don't say, hey, I don't like the work, I'm not paying for it. You pay for the work and then never go back to them. Same as music; don't like it, don't listen. Like it, pay for it. Personally, I would shut down all of the streaming services.
  • How is paying for music via a streaming service not "paying for it"? I don't see how you can say it's stealing at all.
  • I don't think you understand any of this?
  • So am I stealing when I listen to FM radio? I don't pay a dime, and I listen to lots of music. If a mechanic does a crappy job, then I'm also not gonna pay them s dime, they are either gonna fix it right or have it towed to another mechanic that can fix it. Sent from the iMore App
  • Your paying for it by having to listen to all the endless ads on the FM station that are paid for by the sponsers with actual money.
  • That's how it's paid for yes. But that's not how he made his statement. Sent from the iMore App
  • Very true but what op said made no sense what so ever. Posted via the iMore App for Android
  • Unlike some other commenters, I understand the point you're making and I totally agree. I don't know why paying for music is an absurd idea to so many people.
  • The point is who's music is the creator or the scumbag music company? The artists make nothing compared the various companies sucking the industry dry. The whole music industry is so corrupt and innovation killing.
  • Very true.. Especially since the music labels take a majority of the profits to begin with and laying the scraps to the artist. Secondly when crap is released by Nicki Minaj or Iggy Azaela. Who'll buy the same crap heard by other artists beforehand. Posted via the iMore App for Android
  • Do you have any clue what this discussion is about??? Sent from the iMore App
  • Yup and yes. This goes for everythig, including software. In general I just do not believe that free is better, and from a Darwinian POV, it certainly is not better in the long run. If you want to consume more of something you deem good, for you, then you must be willing to pay - you're not just paying in the moment, your also paying for ongoing creation and replication of the thing(s) you feel adds quality to your life. If you like music, then be willing to pay for it. Yes, sometimes you're going to get stuck with a few things you don't like, or even change your mind about what you thought you liked, but for the most part, when you're paying, you quickly learn what suits you and perpetuate the continued growth of the source of your pleasure, happiness and well-being, by paying for it. Personally I like the way properly run streaming services are adapting. Also personally, I really don't see why Apple needed to open a free-window of time in the first place - why'd they even go there. It wasn't necessary and I think everyone who's going to use it would be using even without the feel trial period. Just allow paying customers to get opt out or in on a monthly basis and we're done. And one more thing, as I already posted elsewhere, I hope I can continue to pay for songs and albums one-at-time, I don't want to be forced into a subscription model - that's just me.
  • Your options are a good start and even if nobody agrees with them, at least it's thinking about a solution (something Apple hasn't done). The part that gets overlooked in this argument is that the labels agreed to these terms yet somehow they are not held accountable. It would be great if the artists expressed their anger over Apple music using the stupid ping like service, but I suspect those comments will be heavily modified by Apple PR. It's a shame because Apple could have done something really special with this, but sadly what Apple did was launch an average music service and take all the negative press from Spotify (another winner from Cue). "In an ideal world, the Taylor Swifts, Trent Reznors, and indie artists would be working with Apple to create a way for them to make sure artists get paid better and more significantly, in general, even without labels." -- Tidal says Hi.
  • It's getting bad press just before launch, I think it's a good sign for the consumer
    I'll try it and then decided.
  • In 2001 if Apple was as big as it is today, do you think artists would not cry foul when Steve Jobs wanted to sell every song for .99? Without that, iTunes Store will not be as popular and music industry as a whole would plunge more downward.
    Food for thought.
  • Nah, the price would settle wherever it would settle and it would eventually settle to $0.99 because that's what it's worth. Also, the unbundling of the album and the ability to buy individual songs is arguably the thing that has brought the music industry to it's knees in the last twenty years or so.
  • No one in their right mind will think a hit song should be worth the same as every other songs. The deal Steve Jobs cut was as cruel as this deal.
  • I guess I'm not in my right mind. Growing up, I routinely bought cassingles. The current hit song plus a b side. The price? 99¢ Whoever wants to blame Apple for the state of the music industry is blind. Apple just was the first to successfully change the existing method of delivery (cassettes and CDs) to a digital format. It is nothing new. This "we're going to go broke in the trial period" people are not either understanding how things work, which would explain how this would "put them out of business" because they don't know how to run a business, or are just jumping on Apple Music because it is Apple. If other services offer 60-day free trials, then this is nothing more. They also assume that every person who hears one of their songs would have gone out and bought that song. This is wrong. But not hearing them because they opt out? They won't convert me. Today, these artists are getting zero dollars from me. Next week when I sign up for Apple Music? They will still be getting nothing from me. But come 9/30 when I start paying for a family subscription, that, to be honest, will nearly exclusively be used my my 13 year old daughter, they will be getting a cut. Let's take HBO Now. I could get HBO from DirecTV, but it is a pain to cancel when I was done. So I waited until the BDs of each season of Game of Thrones came out, and got them from Netflix. This season? HBO got $30 from me. I took the free month and gladly paid the $15 each month for the rest of the season. Last Monday, I logged int iTunes, clicked "Manage Subscriptions" and turned off auto renew. Done. Easy. And I will be back in a few months for the Leftovers, so that is more money, all because it is now convenient for me to subscribe and unsubscribe as fits my schedule. Artists and the recording industry look at and blame everyone but themselves for declining sales, when the fact is the quality of the product has been on a steady decline over the past couple decades. The easiest solution to make this "let's all jump on Apple with it's pile of cash" bandwagon go away is to allow artists to opt out of the trial period. Sadly, this also highlights a scary trend. Punishment of success. Sent from the iMore App
  • I love how olds talk about the "quality of the product" as though music is some monolithic structure created to satisfy the needs of every individual everywhere. There's no steady decline in music -- you just don't like what's on now. News flash: yes! there are BILLIONS of people who do like some of the countless offerings of today's music; no, you aren't special for remembering the good old days.
  • Exactly! Sent from the iMore App
  • That "Exactly!" was for the long comment above about how the music industry is not taking responsibility for its failures. Sent from the iMore App
  • I think anti-trust is a big issue here. Apple is still the biggest distributor in the music industry by far (by revenue), so they can't be seen as abusing their position. If they paid out during the free trial period, with no other revenue to show for it, they could be seen as dumping. That being said, their payments are actually higher than industry average, but that's after the free trial periods end. So, the industry will get paid for the free trial, but at a later date and at higher rates. Sent from the iMore App
  • The obvious option is for APPLE to pay the difference. Richest company on earth, right? The easiest way to look at the issue is to see it as that old retail standby the "loss-leader." A store puts an item on sale or for free as a means of enticing customers into the store. It costs the store their own money and lost sales, but they do it because it entices more business overall. More "bodies in the store." In practice, the company rarely actually spends money however, and the "loss-leader" product is often more of a break even proposition than an actual loss. That's what this is. Apple no doubt sees this as them and the music industry being in the same boat and cooperating together on the service and therefore ALL parties are paying for the loss-leader. The artists lose money, but so does Apple. What they are ignoring however is the economic disparity between an indie artist in his Mum's basement and the world's richest company raping and pillaging the landscape. The various parties are not equal partners and for Apple to pretend they are is just wrong. If an artist doesn't get paid, then Apple loses some tiny fraction of it's profit. The artist however may lose 25% of their entire years' income. I'm sure this looked fine on paper and in principal but in reality it's simply wrong. Apple needs to do the right thing and pay the artists for their work. The free trial promotes the *service*, not the artists, and the service is Apple's. Therefore Apple should pay for the free trial, not the artists.
  • What about the money Apple has spent purchasing Beats, paying devs to refactor the code, pay QA to test the code, advertising the new music service, paying for the infrastructure to host the service. You should count that in the money Apple loses with this comment, " if an artist doesn't get paid, then Apple loses some tiny fraction of it's profit".
  • Apple has misjudged this. A 1 month free trial would have been adequate for most of us to decide whether the service was for us and would probably have been fine for the music industry as well. The big issue is the transition as Apple will get a massive initial take-up of the service. I regularly purchase around £5 per month of music downloads (and pay Spotify £5 per month to listen to free music). I have stopped buying any new downloads in anticipation of Apple Music. I'll take up the free Apple Music trial as soon as it is available - and after a few days of testing will cancel my Spotify subscription. Apart from the free trial the music industry will be getting roughly the same money out of me every month - or probably a bit more. They would be getting a lot less out of me if streaming wasn't available as I wouldn't be discovering great new music otherwise. The answer is probably for the smaller labels to get on board roughly 3 months after launch - by that stage the number of free trials will be a small proportion of the paid for subscriptions. It won't necessarily help them as I expect I will stop buying any new music if Apple Music performs as I think it will.
  • Apple Music can be successful without a 3 month trial period where nobody gets paid. My guess is that most artists wouldn't have a problem with this trial with no pay idea if the trial was a week, or even a month. Three months is just ridiculous.
  • When Apple drops the free period to 1 month and covers the cost to the labels they will look great and benevolent to the consumer! /I don't stream much and radio continues to suck!
  • So much noise these days I feel in my head compared to when I was younger and you could turn on a radio and just enjoy the music. I'm not a artist so I'm sorry if I don't understand all the details. Its just a trial period though and I feel even that could lead to new people hearing a artists music and maybe buying it thanks to that trial period. I listen to stations streaming that I've found on iTunes. Stations that are commercial like one in Iceland, or stations just streaming from their home. Music I hear and enjoy, I then go and find a way to buy it. Even just one song I heard this week on a streaming station from Brazil, I couldn't find anywhere on iTunes but found a used CD for sale on discogs and ordered it. Not every listener of things like FM radio is paying to listen but I imagine the station is paying some sort of fee. I don't pay to listen to these streaming stations, but it still results in me buying a lot of music from listening and discovering new artists. So I don't see the trial as a all bad thing. It eventually becomes a paid service. For me I prefer to buy my music and own it and control when and where I listen to it. So I don't use any paid streaming service. I stick to my old ways and listen to the radio or more so now, internet streaming stations. Then if I like a artist I hear, I buy their music.
  • My question is why did Apple choose a 3-month free trial and not 2? Sent from the iMore App
  • I think the answer is simple, they want people to be hooked on it throughout the entire summer so by the time fall come and it is time to pay, they are going to be so used to using Appke Music that they won't want to go to another service.
  • Without compelling content Apple's new streaming business will fail. If Apple really wants to succeed and disrupt the Music business they need to do something really different regarding compensation. It seems to me that in order to make this work, everyone involved: Apple, Music Industry, Big Name Artists (Influencers) and Small Indie Artists need to be involved in arriving at a compensation plan that works. Up until now, it seems the compensation plans have been forced on people which will never create a happy and vibrant music business. Most people working in the Music industry get up each day and "go to work" for a paycheck just like all of us. As Taylor Swift said, she's responsible for paying a lot of people that work tirelessly on her behalf to create and present her music. Maybe it's time for everyone to "Think Outside the Box" regarding compensation. I know... sadly it will probably not happen anytime soon since very few of the "Big Players" in this game are willing to give up much.
  • This is totally a non-issue, other than if musicians cry enough Apple might give them an extra cookie. After three months, there will be subscribers. Then all the artists in the system will be paid ongoing from the subscriber base. This stuff about people going bankrupt is junk. Either the service takes off, or it does. If it does, they will be getting steady paychecks larger than they are getting through Spotify. If it fails, well, then there is no problem either. I can't see how any artist loses any real revenue. Either they were making lousy money from Spotify, real money from Apple downloads, or they'll make new money from Apple subscriptions.
  • Apple didn't cross the t's and dot the i's on this, it's as simple as that. They apparently went for the bigger companies and thought the market would follow. It's a good service they've put together for a certain market, but music isn't just about consumption, it's more complex than that. I know Zane Lowe from his radio one shows, and he's a talented DJ, but he's far from the only one. Zane has a particular style of show, and this can be limiting for some. For Beats 1 to work it has to be eclectic, or it will become another Urban music station. Apple have to either find a way to sell the independents on this service, or alter the terms for all. The 3 month trial is the right strategy, especially for us customers, but it hasn't taken all artists into account. The British independent labels get a huge amount of exposure on BBC Radio (Radio 1, 2 and 6 Music) and other stations, so they won't be in a hurry to sign up. I'm guessing they want a deal, but on terms that are more favourable. Sent from the iMore App
  • Apple doesn't know how many subscribers they'll get, so how are they supposed to subsidize like payments in the meantime? How does sitting out the free-trial period benefit artists? They don't get paid either way and in the meantime lose exposure. It is lose-lose for those who sit out for those first three months. There most certainly is a free tier for Apple Music. I get so tired of hearing this and really didn't expect to see it here. FREE TIER (simply signed in with Apple ID):
    1. View artist feed on Conncet
    2. Follow artists on Connect
    3. Listen to Beats 1 radio station
    4. Listen to Apple Music radio stations (limited skipping) PAID TIER:
    All the above, 1-4, and unlimited skipping on Apple Music radio stations
    5. Play and save Connect Content
    6. Like Connect content or radio songs
    7. Enjoy unlimited listening from the Apple Music Library
    8. Add Apple Music content to your library
    9. Save for offline listening
    10. Get expert music recommendations I got the above list of information from Apple's website at: What I don't understand is why Apple cannot just launch the damned thing without this free-for-all approach. The FREE TIER is enough to see if you want to pay for the additional stuff, like adding songs at no additional cost beyond membership to fill out your library. For those who are not going to pay and add a bunch of songs for free, that is going to be unnecessarily messy denying those songs once the free period is over. Like I said, they should just launch the thing without the everything free approach since it will fast become obvious that you either want to pay or you don't.
  • I like that idea. Seems like it would have worked without all the brouhaha. And managing the free tier royalties would have been offset by those who will probably pay right away. No money lost on anyone's part. Posted via the iMore App for Android
  • I find it extremely difficult to believe that a label or an artist is going to go out of business because of revenues they won't get from a business that doesn't exist now. If they were already relying on those revenues, then maybe, but they aren't getting any money form Apple Music now.
  • I initially thought the way you do... But the difference is that the labels will start losing money as people cancel their subscriptions to Spotify, Pandora, etc. I've been told - but haven't verified - that the other services DO pay the labels during their free trials, as a "customer acquisition" cost. If so, then Apple is taking advantage of their size & market power (much as Amazon does with book publishers) to gain more power. Ironic, but typical of most companies. We (Apple fans) like to think that Apple is better than that...
  • I suppose there might be some of that. I'd think that most people wouldn't cancel their old service until they had to start paying for the new one. Either way, I still don't think it would be catastrophic to a label or an artist.
  • Also, their iTunes sales will bottom out during the trial. Sent from the iMore App
  • Apple is fronting the cost of the entire distribution channel for the three month trial: servers, bandwidth, advertising, etc., without any compensation. The artists and labels simply don't understand what goes into a service such as this and they still want to judge it based on the same principles that were used to govern physical distribution. Hell, most of the artists and labels still don't understand paid download services. It's black magic voodoo to them. Apple will have more subscribers for Apple Music in the first year than any other service and EVERYONE will be making money hand over fist. I would wager that the majority of people spend less than $10/mo. on content from music services. Most still don't subscribe to streaming services. By offering a three month trial Apple is allowing users to become comfortable with the service and build playlists that they integrate into their daily lives. Many users who would not have subscribed will do so and the end result will be a service that brings in $10-15/mo. from millions of users, many of which would not have subscribed to something like Spotify and that certainly would not have purchased that much music from a traditional store in the same length of time.
  • By the same token, it seems that Rene still doesn't understand what publishers and labels do for the artist. He seemed very willing to want to try to cut them out of the process altogether. This work that publishers and labels do needs to be done regardless. Who's going to do it? The artist? He's made similar comments about book authors and trying to cut out publishers, editors, and the whole nine yards as if the work they do will somehow be magically done by a fairy. I didn't comment much on this because it's really hard to know. Nothing like this has been done. What percentage of itunes users, the biggest group of music consumers on the planet, will convert fully into paid streaming? We don't know. But I DO know I wouldn't want to miss out on it if I don't have the megastar branding of a Taylor Swift. And very few do. No one is forcing anyone to be a part of the free trial. So that argument about working for free is bogus if you agree to do so. It's not totally free anyways. You're basically deferring revenue and hopefully getting a much better revenue stream later. But again, that remains to be seen.
  • I would be willing to bet that Apple has a pretty good idea of how many iTunes users they can expect to jump over to the streaming service in the first year. These projection were shared with the music labels during the negotiation process, I would guarantee it. They had to give them some type of revenue projection to get them on board; supportive data that would convince the labels that losing out on download customers wasn't going to cause a drop in profitability. That said, maybe Apple should offer to pay the labels/artists for the three month trial, ex post facto, if the user signs up for the service? Or, would offering to pay 50% of the usual rate, essentially an offer to split the cost of the trial, be sufficient? I understand that the smaller labels and indie artists believe that all revenue is going to dry up because everyone will stop buying music and sign up for a free Apple Music trial, but I honestly don't see that happening. Are the demographics that typically support indie artists the same as the demographics that subscribe to stream music services? I can't answer that with factual data, but my feeling is that the two groups are probably not the same. I don't quite agree with you regarding the necessity of the labels, though. Much of what the labels and producers have traditionally done can now be done by only a few people working in their home offices. The labels and producers are analogous to the cable companies in that they used to serve the purpose of aggregating content and providing a distribution channel from artist to consumer. The internet provides this channel now and an independent musician could build a successful business distributing directly to the consumer. It's just another type of startup business. What service do the label and producers provide that I'm missing here?
  • I'm entirely on the side of the artist here, because there but for the grace of an up-front ad model goes the News app as well. What I'm doing is asking out loud what would be better, and listing some options. People don't seem to want to pay for content any more, and I'm not sure how anyone, including Taylor Swift or Apple, have figured out how to solve it.
  • Here's the way I see it. I pay for spotify now and I'm definitely switching to Apple music simply because it's integrated into the OS and therefore suit my needs better so I don't need a free trial, just take my money and pay the artists what they're due.
  • In this case it should be Apple who eats it. It is not right for Apple to demand the labels or any one else eat the loss for 90 days. Apple should eat the loss leader simple as that. They want people to sign up for it they pay for it. It is not right for everyone else to subsidize Apple greed here to not want to pay. I bet if Apple was force to pay it would drop REALLY fast to 30 days at max.
  • I've been a Beats paying subscriber for 5-6 months now and if Beats is folding becoming Apple i get the free trial? If its a rebranded service revenues are still going to be coming in because BEATS MUSIC android app will not be relaunched until fall 2015 way after the initial apple trial on apple devices. I understand need for paying but truth is revenues will still be generated through the transition in some fashion Sent from the iMore App
  • Are we trialing the service or the music? We all know what the music sounds like so surely it's the service we're trialing. It's Apple we're evaluating here. They should be stumping up the cost if they want us to carry on using their service (the music is by and large available any number of streaming services).
  • Wow. Well put. Posted via the iMore App for Android
  • There is something brewing come September/Fall/iPhone event. The three month trial is too much of a coincidence as to where it ends for early adopters. Sent from the iMore App
  • Other services give free trials to new customers, because they already have a large paying customer base. When they were new, and just starting out, it was usually a one week to one month trial. I am sure they paid royalties. I do believe this goes deeper, and Apple will get caught again trying to shut other services out. To me is is wrong not to pay artist, but Apple is in talks with labels about the new service, so it is not one sided. If labels pushed the issue, I am sure they would get the royalties. Just my take.
  • 3 month trial is great way to convince clients to move to paid streaming service, it's in best interest of all, it's so clear, that only people extremely blind by $$$$ are not seeing this. Apple is not getting a cent during this time, it's necessary evil to move the whole industry, if someone doesn't want to participate will be left behind.
  • 1) From this point on, any iOS device or Mac product that is either updated or purchased will have Apple Music preinstalled. That's hundreds of millions in the first year and easily reaching into the billions over the the next decade. This is huge and doesn't even take into account Windows PC (phones?) or Android. 2) Do not underestimate 1-click signup and purchasing. This is huge. 3) The cost of running the Music division including the infrastructure that can and will support hundreds of millions and eventually billions of users is huge. 4) Apple is going to advertise the living hell out of this product, to the tune of millions, if not hundreds of millions of dollars. Their marketing budget will be huge. 5) Apple will be, as of this writing, paying out the largest percent of income of any music streaming service. Why is that fact not considered huge? So... Apple has paid for the construction and will cover the costs of running facilities, and paying division employees, that can handle hundreds of millions, and eventually billions of users. They guarantee that hundreds of millions and eventually billions of devices (not even counting Macs, PCs, and Android) will have Apple Music preinstalled. They will spend hundreds of millions and eventually, over time, billions of dollars marketing Apple Music. They'll provide 1-click signup and purchasing. And they're paying out a larger percentage of income than every competitor that exists. In any negotiation and hopefully an agreed upon business arrangement, there has to be an upside for all parties involved. With everything that Apple brings to the arrangement, minus the 3 month free trial, where is their upside? Not only does it appear that Apple's only upside is the 3 month free trial, but they're passing it along to the consumer to help grow the user base, which then benefits the labels and artists.
  • Xbox Music is on every Windows 8 PC, and there are more Windows 8 PCs out there than PCs with iTunes installed on them. It didn't take the industry by storm, despite Microsoft having much better deals than Apple's 3 month trial - like 10 free DRM-Free Tracks a month, 10 hours of free streaming every month (Ad-Supported, but the only Ads I've ever seen were for the service itself), etc. It's a streaming service. I don't think it will have the impact people are hoping it will. There are too many easy ways to get free music, like ripping the tracks off YouTube for one. This is just not something people in my social circle are caring about. They have Pandora for free, they don't mind the Ads or the quality. Anything "specific" that they want, they just go to YouTube and rip it off there, or have their friends send them copies of the tracks they bought from iTunes/Amazon/Xbox Music/Rip the CD/etc. The Music industry has a lot more issues to worry about than whether or not they're getting paid during a free trial. And I think a 3 month free trial is absolutely overkill, anyways. It's just a desperate attempt to try to lock users in, but I don't think it will work. I think a lot of people are going to simply turn it off after 3 months, unless they pull some shenanigans like tying iTunes Match to this service (which will certainly piss a lot of people off).
  • Also, why no complaints about Google Play Music now offering two month free trials? No issues there? Sent from the iMore App
  • Because they still have a paying user base along with attracting new revenue with the free 2 month trial. The revenue the industry already sees will still be the same with or without the free trial, in theory, but it should bring in some added revenue. In Apple's case, they don't have a paid user base. So people would get the artist's music for free for 3 months across the entire user base. Not to mention people who could cancel their other services within the 3 month period which could take out 1-2 month revenue from the industry. Personally doubt it would have the dramatic effect the artists are selling though. They'd lose potential revenue for the first month, and the next 2 months COULD see a dramatic shift if a large number of people convert. But they will still have an entire Android and Windows Phone user base that would still pay for their services without the apple music alternative on their respective mobile OS. In theory it could make a dent, but not something that would cause bankruptcy.
  • Well, are they not paying artists during trial period like Apple does ?
  • Rene; good article. Your second last sentence is - A streaming service that pays better, and more directly to the writers, producers, singers, and musicians, sounds like the solution almost everyone wants. Everyone EXCEPT the record labels wants this. The labels will continue to screw over the creative types. Steaming has the least amount of money possible ending up in artists hands. Labels still control the payout to artists.
  • I agree with Taylor. Also with the indie artists in England. No one else works for free for three months. Why should they. I think most people decide whether or not they like an app, or a music streaming service, in the first hour or so of using it. So 3 months free is ridiculous. Sent from the iMore App
  • The problem i have with all this is if the labels and artist or whoever the party is that Apple is paying relies solely on one avenue for income or payment such as Apple Music, then there are bigger problems than Apple. It's called having a diversified portfolio and its clear that these labels and Artists bigger problems that need addressed besides a 3 month trial period. Sent from the iMore App
  • They should turn their 3 months trial to 1 month. If not, then maybe Apple doesn't believe in it's product. If it's that good, one month should be enough for someone for someone to consider paying for it afterwards.
  • I came here to proclaim that Apple should use some of their funds and pay up. Good press (straightening out that quarrel with TayTay) would be important before the service launches. Now that I read some comments however (spotify's offerings for example) this is pretty hypocritical. If Apple lets users subscribe before the 3 month trial expires, it's all fine and dandy if you ask me. Problem solved. If anyone's not cool with that, don't offer your Albums. It's that simple
  • Do these artists rely solely on streaming for their income? If they don't like it sucks to be them. Apple Music literally did not exist a month ago, and if anything, they should be jumping at the chance of an extra source of income. Who cares if you have to wait 3 months for it.
  • Does an Artist not participating in the 90 day trial, get the same payout as someone who does? If an Artist who does have their music available during the 90 day trial gets a higher percentage than one who doesn't, then they could get the money lost during the trial period over the length of their contract with Apple?
  • Looks like  pays for the free trial :) Great PR but I'm still not onboard with the idea of paying for the rest of my life to rent music, I feel like the odd one out. Sent from the iMore App
  • I'm happy for the chosen solution.
    It makes Apple now look magnanimous and Taylor Smith look petty.
  • From my view it looks like Swift, and the others who complained, got justice. Apple simply and swiftly pulled out the checkbook before this got ugly. Sent from the iMore App
  • Problem solved ! Sent from the iMore App
  • Taylor Swift beat the cult. I love it. Posted via the iMore App for Android
  • So will Taylor Swift do the right thing and allow her complete catalog of work available on  Music?
  • How is this a dilemma? Apple should pay. They want to run the promo to get the most reach ASAP. That's cool but how does that mean no one gets paid? When does Apple work for free for 3 months? And all of those who work in conjunction with Apple? Apple is a multi-billion dollar company asking for millions in freebies. It's sad. Perhaps come next iPhone unveiling, Apple gives out the first 3 months of phones for free. Apple and all its employees get nothing. Foxconn? No money from Apple. Samsung? Nothing from Apple. I don't think Apple would last. Nor would their relationships with their manufacturers. 1 month may have been feasible. But really, in no way does Apple wanting this to take off, have any bearing on what anyone else should be paid. Maybe those who developed the service should have worked for free instead. Problem solved. Posted via the iMore App for Android
  • To add to my comment, really Apple was undermining all other services by giving 3 free months knowing that people would try their proprietary options. All of those services would suffer when subscriptions were canceled and people moved to Apple. Instant leg up and all while incurring minimal costs, as they'll make development money back with later subscriptions. Come on Apple. Quit being so damn greedy. Posted via the iMore App for Android
  • I vote for 2. If Apple feels confident that most people will continue to subscribe after the trial period ends, it should have no problem subsidizing those 3 months.
    As it stands now, Apple is asking artists and labels to pay for 71% of that gamble, and hence their reaction.