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Eddy Cue says Apple Music will pay artists for streaming, even during free trial

The post by Taylor Swift, which followed some indie unrest, challenged Apple Music's intentions to offer a free ninety day trial, which would not pay for the content it was streaming during that trial.

Cue started off by stating Apple's positing on artist re-imbursements in general:

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Followed up by saying Apple Music will be picking up the tab for the free trial period:

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And then reached out directly to Taylor Swift:

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By "artists", I'm assuming Apple Music will be paying the music industry, including the labels, from which artists, producers, writers, and any and all other stake-holders will also get whatever cut is dictated by their deals.

Swift's post undoubtedly sent ripples through Apple, which was and is set to launch Apple Music in just over a week. For this to have happened so quickly, however, and for Eddy Cue to announce it in a series of Tweets, shows an unusual level of responsiveness and social engagement from Apple.

It also shows Apple's belief in the necessity of the ninety day trial period. The company would rather foot the bill for the whole thing than consider shortening it or exploring other options.

Update: Peter Kafka got a chance to speak to Eddy Cue following the announcement and offered additional details, including that pre-subscription rates will be different (and presumably lower) than post-subscription revenue sharing, and that Cue informed Swift of the news earlier. From re/code:

Cue says that Swift's letter, coupled with complaints from other artists, did prompt the change. He said he discussed it with Apple CEO Tim Cook today. "It's something we worked on together. Ultimately we both wanted to make the change."

Rene Ritchie
Contributor

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.

99 Comments
  • Great PR. Sent from the iMore App
  • So is T. Swift gonna put her latest album on Apple Music then? Sent from the iMore App
  • Exactly. After Apple has responded to her letter it will be interesting to see if she puts her 1989 on it now. Integrity test Taylor. Your move. P.S. I wonder if any of her followers will step up and ask her about that! Put up or shut up!
  • What part of this is about integrity? Perhaps if she had made the relevant sentence bold, and underlined it, and put it in all capitals we wouldn't have so many questions about what she should and/or shouldn't do.
  • If her reason for not putting her music on  Music was because of the non payment for the free trial, there will be no more non payment for artist during the free trial. Hence, own up now and put your music on there since the issue that kept your music off is now gone.
  • I wouldn't hold my breath. I believe she also has issues with the royalty rates from streaming music.
  • Of course she will. And she is going to donate all of the profits from the first three months to independent artists, because that's who she was worried about. Sent from the iMore App
  • Now that sounds so damn dumb.
  • If you believe that, please allow me to sell you some beautiful ocean front property in Arizona... Sight unseen of course!
  • Any publicity is good publicity, as they say... But I think Apple is looking for a more favorable perception from the public and the music industry regarding Apple music than what it was getting these days. Smart move I think. But the sad thing is that if such a move would have been made prior to the announcement of the service, it would probably have flown under the radar of public perception.
  • I dont believe any publicity is good publicity. All this did for many is reinstate the belief that Apple is an industry bully behind closed doors and a friendly happy face on the outside. Everybody knows theyre pissed internally and that cash and leverage is first and foremost like any other company. The difference is, Apple knows how to bullsh* its way out with consumers once theyre exposed. The true sadness isnt that Apple is ultimately only in it to make money, its that people actually believe theyre not.
  • Of course the key to developing a healthy relationship with any business is understanding that making money is their reason for existing. It's why, even with the occasionally shady boardroom things that happen with companies like Apple, Amazon, and Microsoft, I still trust them more than say... Google. You can always trust a salesman to sell something. You just can't trust a huckster at all.
  • Good move by Apple.
  • Cue: "When I woke up this morning and saw what Taylor had written, it really solidified that we needed a change. And so that's why we decide we will now pay artists during the trial period." Asked if Apple is eating the cost of the 90-day trial period, Cue said, "We're certainly paying for it, yes. We're all in."
  • She changed their opinions real quick.... Good job Taylor! Posted from the Nexus 6, Nexus 5, or Surface Pro 3
  • I wonder how the Apple-haters will spin this one (that they will try is a given).
  • How would you spin it? Apple haters don't need to spin it at all. The facts of the situation tell the story as it is.
  • Nice try but no... The REAL deal here was between Apple and the music industry. Not between Apple and the artists. The artists could have gone out to the labels saying "hey will you compensate us for the deal you just struck with Apple for any loss of revenue we might suffer during the initial 3 months trials?" (and it most certainly did happen)... but some chose to go public (UK independents + Taylor Swift) straight to the media vs Apple (supported by influential publications, bloggers, etc.). These artists are playing the wounded virgins with headliners like "work for free" which is ridiculous given that this is just not how the industry works. It's true that artists are bystanders in this and they have every right to feel slighted though... but they are water-bearers in this game, not players. That's just not how this industry works sadly. Personally, I feel encouraged by the fact that some artists could swing things their way (with the help of industry watchers/publications). But the vast majority of the money is going to end up in the major labels' pockets, not the artists. And with all the attention Apple has from governing bodies over this service, could they have included this from the get go... My instinct says they would have faced a pretty hefty fine for it (and might still do BTW).
  • I don't think you understand how royalties are paid. Streaming plays of a song are considered a "public performance," and royalties are paid to the owner of the publishing rights and to the songwriter. Sometimes that's the artist, and sometimes that's the label. Could even be a producer, or just a person that writes songs for others to perform. Having said that, I could be wrong, but I don't think that Apple would have a deal directly with the labels for streaming music. ASCAP, BMI, and some other organizations (that I can't remember the names of) would collect the money, and distribute to the appropriate parties. There could be other deals between artists, songwriters, and labels that divide up the royalties among them further. That would be in contracts between the artists and the label. No involvement from Apple there. How are artists bystanders? Without their product there is no music streaming.
  • I am keenly aware of how the royalties work in the music industry (I have a few clients and friends from the industry, mostly on the producer/agent side) and rights holders are very rarely the artists themselves (regardless if they are composer, songwriter or performer). To my knowledge, the artists weren't negotiating with Apple, the labels were. Very few of the artists have clauses in their contracts to allow them to veto their own material. The way labels see things is more akin to farming than anything else. That's why I said the artists were more bystanders than "players".
  • M Sent from the iMore App
  • "How would you spin it? Apple haters don't need to spin it at all. The facts of the situation tell the story as it is." Clever meta-spin there, Mr. Hater.
  • So... how would you spin it? I like how you avoided the question. LOL
  • Wait: you blame me for not spinning when you claim you haters don't need to spin but you're spinning all over this comment section?! I could type a cute "LOL" like you, but I'm not actually amused--a rolling of the eyes would be more like it.
  • Blame you? I just asked how you would spin it. Here's my spin: Apple wanted to use other people products for free, in an effort to promote their own new product. One of the makers of the other product pointed out that it wasn't fair to do that, and threatened to pull their product out. Apple then said, oh geez, maybe you're right! Only then did they agree to pay for the products that will make their new product viable. What's your take?
  • So much crow to be eaten by the fools in the previous threads. I guess Taylor Swift does know a thing or two about the music business as it only took her tumblr less than a day to change Apple policy.
  • I am offering Taylor Swift $5 a month to keep her music clear of Music. Sent from the iMore App
  • Good move Apple. Even if Cue and Tim are being disingenuous. If they really wanted to pay artists during the trial period they could have made that choice initially. Swift writes an open letter lamenting Apple's choice to not pay artists for their music for three months and fools on this site actually criticize her for rightfully feeling artists, writers, etc should be paid for their work. Some even resorted to petty remarks about her music and career as if she isn't at the top of what she does (most if not all of you aren't) and anyone could accomplish her feat. I really find it difficult to take Apple execs at their word because sometimes they're full of it. Recently Phil in a interview stated "The belief is more and more as we use iCloud services for documents and our photos and videos and music," he said, "that perhaps the most price-conscious customers are able to live in an environment where they don't need gobs of local storage because these services are lightening the load." That's complete bull. The most price sensitive consumers aren't going to pay for Apple's upgraded iCloud storage and the measly 5 GB included for free doesn't cut it. They kept it around to force anyone that needs more than 16 GB of storage to upgrade to at least the middle price point. Knowing that if they included 32 GB in the base model more consumers would buy in at the intro level.
  • +6 Sent from the iMore App
  • I am personally offering Taylor Swift $5 a month to keep her music clear of Music. Sent from the iMore App
  • A fool and his money are easily parted. Posted via the Android iMore App!
  • The other part of that argument that really struck me as problematic hinges on the fact that I've never found any way to keep your photos and videos stored only on iCloud. I have a 20GB of iCloud storage... Why are my images still taking up nearly 1.5GB on my iPad!? Why aren't they off the device and only in iCloud?
  • What Ms Taylor really need to do next is write a blog addressing the Labels. If she is indeed representing the 'artists' then Labels mentality needs to change which has been sucking the artists high and dry since time unknown. As far as I know rightholders already take 70% from Spotify per streaming. Labels makes the biggest chunk of that. That hardly leaves any room for the streaming businesses to make any profit. And artists are paid measly amounts by Labels. With increasing demands from artists (big and small).. streaming becomes one of the lowest margin business. Apple is gonna pay even higher to the Labels than others in the business. Yet no one has the balls to put word out to the Labels because of how powerful they are in the business and with their lobbying. It's high time artists directly take on with the Labels rather than blaming technology companies for their share. Sent from the iMore App
  • This is so true.
  • Not sure if I should be happy that they did the right thing for artists or be upset that this could just be a big PR thing.
  • 1) who cares? If a person is really a jerk, but treats people well, and acts nice around others, do you care? "yeah, but they are a jerk when they are alone!" Who cares?
    2) Assume positive intent - ties back to #1 a bit, but does it make you happy to be so cynical? Most people want to do the "right thing" - It makes my life easier to assume people are trying to do the right thing
  • Well Apple didn't want to do the right thing. They obviously wanted to be greedy and rip off the artists. I mean, that was their first instinct, was it not? My assumption is that they never thought anyone would challenge them, because they are the mighty Apple. Nice to see someone call them on their BS.
  • It's unique and refreshing to see someone who thinks positively and shares that mindset on the interwebs. Thank you! :)
  • I am going to take the wait and see if this is more than a token response by apple. It should be fairly close to subscription rates. Not the we will give you 50% of the normal rate. It should be at least 80%
  • No shame in crowd sourcing your ideas. This is the right move Apple.
  • The free trail is for apples new service not the artists music. Of course we should get paid if someone listens to our tracks. Sent from the iMore App
  • Apple made the right move here. Taylor Swift had better get on board with her entire catalogue or I'm done with her! Time to put up or shut up girl!
  • I'm not a Taylor Swift music fan, but I truly respect her business savvy. I don't think she should put any of her music on there, or any other streaming service. Artists don't make much money in those business models. The hope is that people discover your music, and then come to see you live. They buy a ticket, buy a shirt, and that's how you make money. Guess what? Taylor is selling out stadiums without Spotify. She doesn't need these services. Putting her music on them only serves to help the service succeed. Clearly she doesn't agree with how they work, so why would she want to help them succeed?
  • You KNOW the folks at Apple are raging pissed about it. But ofcourse theyre going to do the "You know what? After some thought, our previous decision was wrong and we care more about happy people!" PR response.
  • Why wouldn't they be angry? Doesn't mean they didn't realize that reversing course is the right decision. Problem anymore though is that folks are so concerned with someone's emotional state that they use that to judge the quality of the decision being made. In other words, people be nosy! In actual reality - not the cheap 21st Century idea of reality - how you feel about doing something isn't actually as important as whether or not you do it. I hate waking up at 6 AM to go in to work in a receiving bay without air conditioning. My boss doesn't care that I hate it, in fact she appreciates that I come and work in spite of my feelings about waking up at six. My renumeration reflects that. Cook and Cue will get over being cheesed off, and the shareholders will forget their qualms once they see the first month's paid subscription revenues. Why? 1) Artist income remains intact
    2) Apple's relationship with musicians remains intact
    3) The free trial remains intact
    4) Shareholder profits remain intact This meets the definition of a good call for all parties involved. When the results are seen, and more people decide to pay for the service because their favorite acts from the indie scene were available during the trial, then everybody's gonna forget that they subsidized the trial period. I dare say that a couple of high-level company decision makers being prickly for a day or two is worth the outcome.
  • Ah, no, actually, I do not "KNOW" that they are "raging pissed about it." In fact, given their huge amounts of success and the way they conduct themselves, what I can make an educated guess about is that Apple executives don't do rage. Those types of individuals wouldn't last in such a successful, innovative culture.
  • The reason for not allowing her album on Apple Music has been removed. She has no option but to allow it now. So it will be on Apple Music but not on Spotify. Great for the new streaming service!
  • so now I assume 1989 will be available to stream from day 1 on Apple Music?
    her album is still not available on Tidal...
  • Guess if you still want to stream Taylor Swift's new album for free you can always go on YouTube. Posted via the iMore App for Android
  • Apple's point here is what I have privately held throughout all of this trivial brouhaha: Only cheapskates with adequacy issues will quibble over 3 months in a lifetime of work. Good musiic, really good music, is timeless and sells to generation after generation.
  • You don't get it...
  • I like this solution.
    It makes Apple look responsive and ready to do the right thing and it makes Taylor Smith look petty.
  • How do ya figure that? She made Apple her bitch. And did it with total class. Also she still doesn't have to put her music on the service as she states she doesn't really need it but realizes others do. And those people should be given the benefit of this service without Apple being so petty as to ask for free labor. She wins no matter what she does. Posted via the iMore App for Android
  • She wins if she still doesn't allow 1989 to be part of MUSIC? How so? She will look like someone who used this to get her own free publicity. The VERY FIRST LINE of her blog states: To Apple, Love Taylor
    I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple Music. She then goes on to discuss the damage of the free three months and that the artists shouldn't devalue their art. So she calls Apple out for not paying, saying that is the reason for her latest not being available on MUSIC. Apple then changes course, so the ball is clearly in TS' court. She can "do the right thing" (as she explained Apple should do, because they can afford it) and allow 1989 to stream on MUSIC, because she can afford it. Otherwise, she is a hypocrite. Sent from the iMore App
  • Betting 100-1 .... she won't let 1989 go free! P.S> Not that I care about that or anything she screams call it singing!
  • Damage control.
  • I am offering Taylor Swift $5 a month to keep her music clear of Music. Sent from the iMore App
  • Well done Apple. It shows that they are listening, not only to it's customers, but to it's partners too. Sent from the iMore App
  • To all those saying "good move Apple". It isn't a "move"....... its a response.
  • Good move by you to tell us that..
  • Good response!
  • It seems silly to me that everyone is interpreting this as innocent little Taylor Swift slaying the giant Apple cyclops. First of all, she's a brand, an institution with millions and millions of dollars behind her. For Apple to "change course" on this so quickly only shows me how inconsequential it was in the first place and that Apple has the billions of dollars to spare. The indie artists Taylor is supposedly fighting for are still getting the ol' shaftaroony. That's ye Olde English speak...
  • I think the main thing to take away is how important it is for devs, artists, or whoever to have a megastar voice to speak for them. Or at least a unified one. Developers don't have this voice...besides a few better known devs who blog time to time but not nearly on the level of Taylor Swift. I do feel like Swift wasn't being genuine either. Let's see her "care" more about helping other artists out in other ways besides doing what's best for her...but supposedly moreso for them. She's started down this road now. I'd either get creative in helping indie artists or step out of this quickly.
  • 2 things: 1. Apple missed an opportunity t let T Swift write a break up song about them. Now that's good publicity? 2. Who thinks Apple has this planned all along? Used as a negotiating point. They could give up anything they had assumed they would have to anyway? Now they look 'nice'.
  • The billion dollar giant, Apple, shouldn't need to be told what they were doing was hurting artists. It's good that they changed their direction, but they knew exactly what they were doing from the start. Apple has to be the greediest company on the planet, and hence, one of the richest. Either way, artists aren't making any good money from any of the streaming services, even when they do get paid. Cracker singer, David Lowery, posted his royalty statements online, and showed that one of the songs he co-wrote was streamed over a million times in a month on Pandora. How much did he make for over a million plays?? A whole $16.89. So yeah, it's the worst business model in the entertainment industry. It's no wonder Apple is getting in on the music streaming business. Greedy bastards. Oh, Rene! You forgot to blame all of this on Samsung....
  • Can you tell me how Pandora is any different from a Radio station? How much does an artist get paid by radio stations to play music? If you and others don't like streaming music, then don't use it.
  • OK, here's a link to the story, with pictures of his royalty statements.
    http://thetrichordist.com/2013/06/24/my-song-got-played-on-pandora-1-mil... Notice that Terrestrial Radio royalties are much more. The same song that played over a million times on Pandora for a measly $16.98 paycheck, was played on radio only 18,797 times. that's WAY less than a million. However, for that, he was paid $1,373.78. That's a huge difference, is it not? If Pandora paid the same as terrestrial radio, he'd have been paid over $800K. See the difference?? Hey, I like streaming music services, as a consumer. As a musician, I think they suck. After seeing that, you can't tell me it's a fair business model.
  • Well... that's 16 bucks more than he received from everyone that pirated the song. He should be thankful! I agree that streaming services should be more expensive than they are... or contracts adjusted behind the scenes... or something... but we consumers don't have much control over that. Most of the problem probably lies between the artist and the label. Streaming services have been made available to me at a set price with set features and I will happily throw my money at them as long as the value/cost proposition makes sense. I just hope all of these services can put a serious dent into piracy and - as you alluded to - find a way to help ensure artists get paid enough to want to stay in the business long term.
  • Wow... I see you're part of the entitled generation...
  • My take is entirely different. The Artists had a choice, they could not get paid money they already aren't making then get paid higher, or not sign on with the deal. Just like Artists feel that Streaming cheapens music and they shouldn't feel obligated to provide it to Apple or anyone else, but that is a two way street. Neither Apple, RDIO, Google, Spotify, or anyone else for that matter is obligated to carry an artist music. If Taylor Swift doesn't like it, she can do what she did and remove her music from streaming, as a result Apple can say well we are under no obligation to sell your albums on iTunes either, go make CD's. Artists whining and charging ourageous amounts for music is what led to Napster and other piracy sites, keep going and guess what will happen again?
  • The cost for music was never outrageous. Piracy became rampant because it was so easy. It wasn't a revolution against an industry. It was selfish "consumers" with an unprecedented toolset to gain something for nothing with no repercussion.
  • Wow, you think CDs cost too much?? What lead to Napster was a society that expects everything for nothing. Even if CDs cost $3, if you could get it on Napster for free, you would. You don't care about supporting the artists you like. You just want their songs. If you can get them for free, you will. If artists refused to be on streaming services, it would be the end of streaming services. The streaming service isn't doing them a favor by ripping them off and putting their music online. The artists is the one doing a favor to the streaming service, by providing it with its lifeblood, and taking about 0.002-0.006 cents per play. You know why Taylor Swift ticket prices are so high? Because she can't make any money selling her songs to people like you. Now it costs hundreds of dollars to go to a concert, so the artist can recoup the losses they incur by putting their music online for you. Would you rather pay $12.99 for a CD, or a couple of hundred dollars to see your favorite artist play live?
  • I have always paid for my music even back then. Yes, NOW CD's are like $10 to $12 but I remember record companies charging Upwards of $20 for one. Not to mention there is little or no price difference between a CD (which supposedly has a manufacturing cost) and a download. Lest we forget that Apple was the very one that came up with the successful digital music sales model that helped kill pirating. I would bet you my paycheck that if any streaming service paid Taylor Swift what she expects, she wouldn't lower concert prices by one penny. The artists are just as greedy and the corporations who sell the music. It's a free market, if all artists decided that they can get a better deal elsewhere, then they are free to pull out. Know what the difference is between Terrestrial radio and streaming services, I didn't pay a dime for terrestrial radio. Cry me a river about how "poor" Taylor Swift is . She is worth over an estimated $200 million dollars. She is as greedy as the corporations she rails against.
  • Again, you don't know what you're talking about... "a CD (which supposedly has a manufacturing cost)" You don't think they do? They just appear out of thin air, with artwork, layout, packaging, etc? LOL Taylor Swift probably wouldn't lower her ticket costs, but we don't know that for sure. She seems to be pretty cool to her fans. I saw something where she hand delivered Christmas presents to several of them. But whatever, I was just using her as an example. Concert prices in general are way too expensive for the average fan. If they cost this much when I was growing up, I'd have never been able to afford to go see a live show. So you didn't pay a dime for terrestrial radio, and yet the artists make far more money air play on radio than Pandora, or other similar services. I don't get your point. Did I ask you to feel sorry for Taylor Swift? Even she didn't ask you to feel bad for her. If you bothered to read her open letter to Apple, you'd see that she said this wasn't being done for her. She was doing it for independent artists, and young emerging artists who would be hurt the most by Apple's original plan. She's looking out for her fellow artists. If she didn't get paid, it wouldn't hurt her. It's the principle that matters. I mean, let's say you're the "next big thing" in music, and everyone is waiting for the release of your new single. It happens to drop the same day Apple music launches. It would probably get several million plays on Apple music in the initial few months of its release. Shouldn't you be paid for that?? Months later, when people will be growing tired of the song, that's whey you start to get paid?? C'mon! You can't feel that's fair in any way.
  • My point on the CD's is that they have a manufacturing cost built in to the CD and the price is the same as the download which has next to none. Music, with very few exceptions is a throw away commodity, there are those albums which are timeless but I can rifle through plenty of my old CD's where there are one or two good songs and the rest of the album was crap. So I think 9.99 per month is more than a fair proposition for an album I will listen to for six months and likely never bother with again. If I like an album, I still buy it, even with streaming. Perhaps you feel differently about music. Don't lecture me about the hard work artist put into their albums when many popular artists use the song writers from the record labels to produce their stuff and I don't hear T.S fighting for them.
    As a consumer, I don't give a crap who gets my money in the end, whether the record company gets it because they take all the initial risks or the artists get it because they are the face you put to the song, either way I could care less. AGAIN, if the artist doesn't like the terms, they can not sign on, it is that simple, it's their choice. If I tell you I want to pay you a dollar for a song, you can say OK or tell me to get lost, your choice. For me streaming is the best deal because of how I listen and if a