Apple Facing ‘Massive Withdrawal’ from Independent Artists, Labels…

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Apple is now facing the prospect of  a ‘massive withdrawal’ from a ‘very large group of indie’ artists and labels from Apple Music, according to multiple sources speaking with Digital Music News this weekend.  That includes some of the largest independent artists on the planet, including Adele, The National, Alabama Shakes, and quite possibly, Radiohead, already a vocal opponent of streaming royalty payments (or lack thereof).

Given the brewing dissatisfaction over egregious Apple terms, it was estimated that more than 50 percent of indie artists will be absent during Apple’s critical launch period this summer.

According to more than four separate sources, including a pair a well-known independent labels, most of the artists and labels will keep their catalogs available for traditional download on the iTunes Store, but will opt out of streaming aspects.

“I don’t need to call Apple to tell them, ‘deal with this, or you’re looking at more than 70 percent of the indies holding out,'” explained one head of a large independent label.  “This is just very clearly a raw deal.”

For those just tuning in, the major sticking point is a decision by Apple not to pay any royalties to artists during a gratis, three-month period.  That was spelled out in no uncertain terms in an Apple contract sent to indies, and of course, leaked to Digital Music News.

Since then, fecal matter has been floating towards the fan.  In reaction, powerful, US-based independent label organization A2IM issued a letter warning its members to exercise extreme caution, or simply wait to license.  “Since a sizable percentage of Apple’s most voracious music consumers are likely to initiate their free trials at launch, we are struggling to understand why rights holders would authorize their content on the service before October 1,” the note advised.

”Please do not feel rushed to sign Apple’s current offer.”

Now, that message is reverberating throughout the industry, with most indies deciding to either (a) wait until after the initial three-month free window lapses on September 30th, (b) demand Apple change its payout terms, or (c) both.

Meanwhile, a number of artists and independent distributors are closely examining ways to opt-out of the streaming service themselves.  On Friday, independent artist Zoë Keating took to Digital Music News and noted that opting out is actually easy through the iTunes Connect interface, while distributors like DistroKid have already indicated that pulling out is not an issue.

More as it develops…

59 Responses

    • Anonymous

      This was such a boneheaded move by Apple. As some are no doubt aware, Apple has literally BILLIONS in its coffers in cold, hard CASH. Not in bonds, not in equities, not in other assets, but green US dollars. The outlay to properly pay royalties for their 3 month intro is a pittance to them, but now their idiocy could cost them far more down the road.

    • Alabama Pipeline LX

      What would the digital music landscape be without the outrageous off beat and very odd musical eXistence of that signature edition of ‘ Independents ‘ ? After all , you really can’t fire a motherfucker you don’t have on independent contractor’s payroll in the first ‘ Fucking X ‘ place. . .

  1. Amyt

    Perhaps there’s no harm in participating in Apple Music from after 3 months. So, this makes sense. But I’m more wary of Google, so would really like to see Apple Music succeed.

    • Anonymous

      “I’m more wary of Google, so would really like to see Apple Music succeed”

      Nobody in the industry likes Google, and everybody loves Apple.

      But Apple Music was a huuuge mistake, and it looks exactly like a typical Google move.

      Apple will succeed — again — as soon as it kills Apple Music.

      • Whawha

        Apple had no choice but to launch its own streaming service. All its competitors are doing it. They couldn’t just sit down and do nothing, and watch that market escape them.
        I would say Major labels and Spotify finished killing music ( after Napster started it ). Spotify by launching its legal pirate service in the first place, and major labels by accepting it and embarking into it in exchange for hefty advances and a share of the company and a stock market exit, in the name of short term profit. None of them believe in the long term viability of the model, so they said “screw it” , take as much as we can right now and let it all burn and sink.
        No indie label should have participated in the Spotify farce. By doing so they legitimized it in the eyes of the consumers.
        Now it’s too late. Streaming is unavoidable. Apple is probably the least worst of the players, but it’s not gonna save the music industry. Silicon Valley won. They’re the next step in the evolution of modern predators. All we can do is damage control.
        Sorry, i don’t have anything more optimistic to share.

        • Anonymous

          Whether it’s too late or not is entirely up to the artists.

          The artists can kill Spotify and Apple Music tonight if they want to.

          • Whawha

            “The artists can kill Spotify and Apple Music tonight if they want to.”
            But they won’t. Because they are a hoplessly disorganized bunch. So that option is unrealistic.

          • Anonymous

            “But they won’t.”

            Nonsense — give them a more attractive alternative, and they’ll leave asap.

  2. smg77

    I didn’t realize that independent artists hate making money.

    • Anonymous

      I can assure you that we enjoy making money as much as you! :)

      That’s why we can’t use Apple Music.

    • Anonymous

      Artists like money as much as everyone else.

      But Apple has (thus far) failed to convince many artists that there is sufficient money in supporting (and temporarily subsidizing) Apple Music. That’s Apple’s fault, not an issue of artists disliking money.

      And it’s purely a result of Apple’s arrogance, by the way. The “we’re Apple, therefore we can do whatever we want and people will get onboard because either they love us or they can’t afford to not work with us” attitude. We’ll find out how well that works, I guess.

    • Almost

      Your comment missed by one word

      “I didn’t realize that independent artists hate NOT making money.”

    • GGG

      Not sure what part of 0 royalties for 3 months you don’t understand?

      • Anonymous

        0 royalties for 3 months and then full royalties thereafter from those who stay on as a paid Apple Music member, as there is no extended free tier.


        One fifth of royalties in perpetuity from Spotify, since the vast majority of users opt for the free, ad-supported stream.

      • FarePlay

        What artist, artist manager or record label would ever consider releasing a new album for no money for even a month? What successful artist would even consider it, unless Apple Music is offering a significant bonus or serious promotional benefits. We all know the shelf life of most new releases isn’t very long. Be an interesting statistic to see the decline in recordings for those with album releases.

        Which begs the question once again. Let indie labels and artists eat cake?

        Where is the conversation about promoting paid downloads. Doesn’t every major artist want to sell as much recorded music as they can? Is apple just going to let the paid download business fade away?

  3. Anonymous

    “For those just tuning in, the major sticking point is a decision by Apple not to pay any royalties to artists during a gratis, three-month period”

    The free tier is just the tip. The real iceberg is Apple Music itself.

    iTunes is good for 80% of our income. Don’t expect us to support a service that’s designed to kill it.

    • Musician Who Understands

      Yes, like Apple “designed” Apple music to kill iTunes….


      News Flash: iTunes sales have been declining on the order of 10-15% per year, for a few years now – WITHOUT Apple Music as a draw.

      How myopic do you need to be, to not understand that iTunes is O.V.E.R. Streaming is the future (like it or not) and Apple is actually one of the last holdouts, just now trying to transition to the inevitable?

      • Anonymous

        News Flash: iTunes sales were better in 2014 than 5 years ago.

          • Anonymous

            US download revenues:

            2010: $2.3bn
            2014: $2.6bn

            SOURCE: RIAA

          • Anonymous

            …oh, and all I’m saying is:

            Enough with the hysteria. Paid downloads are our only reliable source of income.

            You don’t kill a $2.6bn business — especially not when it’s all you’ve got.

          • Musician Who Understands

            Reliable source of income”

            You need to pay attention to the details. iTunes downloads are down. Citing RIAA’s numbers for TOTAL download sales doesn’t do anything to counter the facts about Apple’s iTunes download numbers.

            “Apple’s iTunes music service is in trouble.

            While total sales of content and apps through Apple’s stores were up 19% to $4.4 billion last quarter, sales of music have fallen dramatically.

            Music label executives have seen downloads through iTunes fall upward of 15% in recent months, Billboard reports.”
            Business Insider


            “The failure of iTunes Radio to halt the decline of music downloads has prompted Apple Inc. to consider the most dramatic overhaul of its iTunes music store in more than a decade, according to executives familiar with Apple’s internal deliberations.

            iTunes Radio, which launched in September with much fanfare, so far only sees about 1%-2% of listeners clicking the buy button, while overall music downloads have been declining upwards of 15%, according to several label executives.

            …One independent label said that iTunes’s share of the label’s revenue has eroded from more than 70% in 2012 to about 50% today.”


            “The growing availability of cheap music—from free videos and streams to $10-a-month unlimited subscription plans—is sapping demand for digital downloads at the world’s biggest seller of music, Apple Inc.

            Music sales at Apple’s iTunes Store have fallen 13% to 14% world-wide since the start of the year, according to people familiar with the matter.”


          • Anonymous

            So um, when was the last time anybody shut down a $2.6bn industry?

            Hm? :)

            Seriously, nobody wants that. And that’s why people don’t want Apple Music.

            Streaming is great — if you own a Warner-sized catalog. But the rest of us have to sell downloads. That’s just a fact…

          • What Are you TALKING About?

            That’s the third time you’ve referred to Apple “killing” or “shutting down” the iTunes download business.

            What’s your problem?

            Nobody is “shutting down” or “killing” anything.


            Apple is preparing to transition to the streaming business.

            No plans to stop downloads any time soon – if ever.

            The facts are that download sales are down, while streaming is up.

            Unlike you, Apple sees this plainly obvious trend and is attempting to move into what is the growing streaming business as well.

            Calm down and stop talking about this like Apple just announced that they will cease offering downloads on September 1.


          • Anonymous

            So, you’re buying a lot of Netflix movies these days? :)

            Care to explain why?

          • Dumbest Comment, EverRRRRR

            Netflix doesn’t “sell” movies. They never had a business where I could “buy” movies from Netflix.

            What point are you even trying – and COMPLETELY FAILING, btw – to make?????

  4. SickBeatMaker

    Apple had quarterly earnings of over 42 Billion in 2014. If every single one of Apple’s hypothetical 100 million users (which they won’t) were to pay $10/month for Apple Music, that’s still only 12 Billion for the whole year for one small product.

    Apple does not care what happens, they win either way. If they succeed in streaming, great. If they fail, they torpedo the entire business model with it, and win anyhow.

    • Paul Resnikoff

      It’s an important point. Apple has the ability to make Spotify bleed to death, as does Google (and, you can argue that Youtube already is doing that…)

    • Musician Who Understands

      How does Apple “win either way”?

      If they fail in streaming, how does that mean that they “torpedo the entire business model”?

      I imagine that the folks over at Spotify are going to be fine with it if Apple flails away at the streaming model without ultimately making a serious dent in Spotify’s position.

      Why would Apple failing at a streaming model (which is certainly possible) mean that all streaming itself would fail?

      It is not certain that Apple has the ability to “make Spotify bleed to death.” They could BUY Spotify, but simply try to actually compete with Spotify until what…. until Spotify just can’t take it any more? I’m not sure that’s really a workable strategy – or an attractive one, even if it could work.

  5. Rikki

    as a dj i really dont care most indie music is generic McMusic very few know how to play a real instrument or a guitar dance solo………we are flooded with mediocrity, so maybe this will be a wake up call to get serious and produce better music.

  6. tcooke

    yes, think sickbeatmaker, pretty fair observation. it would be nice to see artists banding together as matter of survival as the desperation of a sinking ship. perhaps it just needs to get much worse. but artists bowing their chests out because their business is live music, and so to stream it at .000001 cents, perceived as irrelevant because maybe it will bring more to their shows. oh well.

    • Edward David Jennings

      No soup for you until October 1st.Then be prepared to be fed by the Apple Music eyedropper.

  7. Me2

    Perplexing and disappointing. With the addition of Beats and Iovine, who has been quite vocal about YouTube and artist rights, as well as some very interesting patents over the last year, the hope was that Apple would do something truly amazing and game changing.

    Perhaps its a strategy we don’t see, with the end game against Spotify, YouTube…

    But artists are going to subsidize that?

    The no royalty thing is fucked. Big time.

  8. Anonymous

    Apple must as well change the logo of their music to a skull and crossbones till Sept 30, because they’ll be paying the same.

  9. Anonymous

    What warped reality tells you that music artists deserve to be paid? That’s not what music was invented for, and now it’s all going full circle. Your gravy train derailed years ago, grow up.

    • Anonymous

      Nice troll. But it ceased to be entertaining a long time ago.

  10. Deep Throat

    Indies need all the income they can get from whatever source to stay alive.
    It is extremely important that the digital music retailers (“DMR” and fuck the acronym “DSP” that was invented by the tech industry in an attempted to make music content unimportant and cheap) who issue the equivalent of blanket licensing to the industry where only the major music corporations can actually negotiate the terms of such license, that everyone provide the press with copies of such licenses so that the music community can have an intelligent discussion regarding the terms and conditions.
    Truth to Power.

  11. Deep Throat

    And fuck confidentiality clauses when you can’t negotiate the terms of a mass license. No decent lawyer worth his/her salt with any ethics would put such a clause in a license that literally might be signed by thousands of people. Confidentiality clauses were always meant to protect licenses and agreements that had terms and conditions that uniquely applied to the parties.

    • Esq.

      Spoken like a true layman who doesn’t understand anything about law or contracts.

      Confidentiality is NOT undermined by the existence of similar terms in multiple agreements. It can’t be.

      Confidentiality provisions are there to protect whatever terms the parties want to keep confidential. Even if every one of those terms is also present in another – or 10,000 other – agreements, that multitude of similar terms does nothing to limit the desire to keep the specific terms of each INDIVIDUAL agreement confidential.

    • Antinet

      I’ve had lawyers tell me there are reasonable contracts and unreasonable. Unreasonable contracts can be pulled down by enough litigants.

  12. Steve Sincalair

    Artists and indie labels standing up to Apple? Only if they want careers in the fast food industry.

    • FarePlay

      I think that has already been accomplished, whether their music is on there or not.

    • Fast Food

      If your gonna be in the fast food industry anyway, there is no reason left to give anything away to give your work away so that Apple, Google, Spotify, and the ISPs, can run up more profits.

  13. Marc Nathan

    I’m curious why Doug Morris’ pic is the header, and he’s not mentioned in the article. I would think Jimmy Iovine would be the pic that should be used. Am I wrong here? What am I missing?

  14. Anonymous

    Trying to shut down streaming is like trying to shut down the weel.
    Either create your own streaming service that pais decently or keep on bitching about.

    The question today isn’t “streaming vs paid downloads vs cd’s (lol)”, its streaming revenue vs pirating your stuff for free (i’m a person that actually still buys the occasional record, which makes me pretty lonely among… just about everyone i know).

  15. Anon

    The answer is to say No to Apple Music, I can’t see how they can force me to put my stuff on there just because it’s on itunes. I have sent them a notice that I am opting out, we’ll see what the response is.

  16. Tim F.

    This post prompts in me a few questions:

    1. How do you withdraw from something that neither exists yet or you aren’t yet a party to to begin with?
    2. How does the size of existing streaming services’s catalogs compare to the one Apple will launch with?
    3. What about the number of markets and users that that catalog is available to?
    4. How many independent artists (or even majors for that matter) are now in the iTunes store but were not at its launch?
    5. Were those who held out or not early to the table better or worse served by not being a part of the iTunes store earlier?
    6. If songs I purchased or acquired by other means are available to me to stream in Apple Music, why would I care if they were made available to the catalog of streaming songs in the first place?
    7. When did those promoting the new age of digital music and/or independents become just as incalcitrant, paranoid, delusional, arrogant, ignorant, self-serving AND self-defeating, and propagandist as the old guard record studios, manufactured pop stars, and the RIAA/MPAA?

  17. jdrefahl

    This reminds me of a time back in 2001-2002 when I was with the Majors and we were trying to launch our individual services, but lacked artists from our competitor labels. In the end, Apple played the “man in the middle” and captured all the business. But, it looks like a day of reckoning is at hand. After 10 years with a virtual lockdown on digital distribution, it seems as though Apple has taken its industry position for granted and dropped the ball big time.

    Remember back in 2001 Apple was the “underdog”… My how times have changed.. In the last 10 years Apple has become one of the richest and most powerful companies in the world, and it’s safe to say I think that they built this empire on the backs of content providers throughout the world. Sooner or later, with Apple becoming richer and richer, and the world artists becoming poorer and poorer.. a backlash was bound to happen.

    And here it is! In the next 5 years its just not going to be cool to be partnered with the “Evil Apple”. No longer can they point to Steve to make them legit to the dreamers. Without Steve, Apple is just like Microsoft. I huge, faceless, corporate that steals it’s profits from it’s content providers.

    The time has come for “something truly different”.