Anton Newcombe is from The Brian Jonestown Massacre…
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Complete bullshit. Another idiot desperate for attention. 1
This is accurate. All major distributors are additionally saying you must be on both itunes and apple music or will lose support, etc.
No. It is complete and utter bullshit. I said no to Apple Music on Tunecore and my albums are staying there on iTunes. And if you have direct distribution with Apple, you can selectiveley choose wich albums to have streamed and wich don’t thru your iTunes Connect.
This guy is just trying a publicity stunt and looking like a complete fool.
yEA, I agree…. another clown looking for attention. I have distribution and did not opt out but when asked if I did, Apple did not threaten to take down any catalog of mine. I do agree, it’s pennies for the stream revenue but so be it. Music is a marketing tool now, to get paying gigs. end of story.
“Music is a marketing tool now, to get paying gigs”
Um, it’s most certainly is not. 🙂
iTunes downloads account for approx 80% of your income as a recording artist.
actually if you look at most data sources for the vast majority of musicians ~70-80% of all income comes from concerts/tours vs. recorded music.
I think you missed the ‘recording artist’ part of ‘recording artist’.
And most touring musicians lose money in the process, btw.
Fortunately, the discussion is over.
Apple has finally been forced to change its position:
All artists are now free to opt out of Apple Music!
Taylor Swift explains why Apple hurts new artists, bands and songwriters:
“I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple Music […] Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing [I find it to be shocking, disappointing]
This is not about me […] This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt “
Read the rest on her tumblr.
Also from Taylor Swift’s message to Apple:
“These are not the complaints of a spoiled, petulant child. These are the echoed sentiments of every artist, writer and producer in my social circles who are afraid to speak up publicly because we admire and respect Apple so much. We simply do not respect this particular call.”
Thank you, Ms. Swift!
…and more from Taylor Swift’s message to Apple today:
“We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.”
+1 on the complete bullshit part. That whole convo is 100% fabricated. I hate these corporate douche nozzles as much as the next guy, but it’s just completely made up and reported with a BIG “love me daddy” headline to get you to read this shit so that they can post more fake stories to you later.
So Apple Bad, and YouTube is OK? How does that work?
Also, let’s not forget the trade off with apple is that it’s 90 days per consumer, ONCE. On Spotify it’s FREE STREAMING forever…
“and YouTube is OK”
Good question!
No, I can assure you YouTube Music Key isn’t OK. We just didn’t expect this from Apple. But YouTube and iTunes are old now — and it shows!
The solution is a new service! An artist-friendly alternative to YouTube and iTunes.
And new is always better.
—————————————
🙂 The real Anonymous 🙂
“As to the question of can you opt out of Apple Music streaming service and still keep your masters on iTunes, I am advising my clients that in business terms, you CANNOT”
Except, everybody on Tunecore and Distrokid CAN.
Please provide links/documentation for your theories.
If you are actually in a position to advise independents on contractual and legal matters, you are doing your clients a massive disservice.
What legal or contractual basis do you have to theorize that if a contract is not agreed to it still goes into effect? Why do you not understand that the termination clause for preexisting contracts in the new contract is only in effect if you AGREE to the new contract and is standard for all contracts that get revised, updated, or renewed over time (i.e., of course contradictory terms from a prior contract are no longer in effect when agreeing to a new contract)?
Comment removed due to racist content.
If you are in need of legal and contractual support as an independent, DO NOT LISTEN TO THIS GUY.
This person doesn’t understand that a termination of previous contracts clause is standard issue for most contracts. This person doesn’t understand that a new contract cannot go into effect without agreement. A monkey can provide better advice than this person.
You call is bs, I call it their right. If artist don’t like it, they don’t have to use this method of distribution for their music.
Then you work for free, too smug to use your name.
Not sure you can take a well documented schizophrenic as a legitimate source here…
I see that DMN is reaching new lows . It is now officialy the Fow News/TMZ/(Choose-Your-Own-Tabloid) of music news.
Here are some suggestions for your next announcement in case you’re running out of click-and-bait material :
– BREAKING : Apple Music will give you CANCER !
– BREAKING NEWS : All tracks on iTunes secretely embeded with subliminal messages to make you sex slaves to Tim Cook !
– BREAKING : Apple Music runs on computer servers powered with baby blood mixed with Satan spit !
Maybe you crowd-source to next news to us ? Im’ sure we can come up with even more
New lows? It’s always been a tabloid. Occasionally there’s some actual info here, that’s the only reason I keep them in my feed. But I don’t take any of it as news, for the most part. It’s 99% bullshit. Thanks for that good 1% though DMN.
“I see that DMN is reaching new lows”
Huh?
Other news sites, including Billboard, bring the story, too.
And that’s what Tim Cook gets for going totally Pyongyang about the entire Apple Music failure.
This website is the Fox News of the digital music world.
Somebody got that title from those tweets?
Sure.
Just got an e-mail today from distributor..
“However, if for some reason you do not want your content available in their store, please contact support via your Dashboard and we’ll be sure to de-authorize Apple Music for you.”
SO this clearly is not the case for all involved at the moment. Though confusion abounds and if contradictory messages are being sent, that is not at all surprising to me.
Perhaps an official statement from Apple Music to clarify.. that would be good.
It’s highly likely that you can opt out of streaming and remain on iTunes under normal terms and conditions …. there would be legitimate antitrust concerns if they attempted to force participation in streaming through such a tactic, and Apple is already under scrutiny – it wouldn’t be worth the risk.
So, what gets me is this:
If Apple made any effort, at all, to properly communicate with artists and labels about Apple Music, none of these misleading or inaccurate statements would be getting so much attention here (or causing so much stress and anger for some in the music industry).
The fact that they’ve failed to make any real effort to do so seems to suggest that Apple has very little regard or respect for artists or independent labels …. in which case, in my opinion, Apple deserves the bad will being created here even though the stories are inaccurate, sensationalist bullshit.
100% correct.
“seems to suggest that Apple has very little regard or respect for artists or independent labels ….”
Yeah… until you start dealing with Google or Spotify. Then “little respect for artists” takes a whole new meaning. Replace “artists” with “maggots”.
“Then “little respect for artists” takes a whole new meaning”
Disagree (slightly); Apple’s latest stunt is classic Google behaviour.
—————————————
🙂 The real Anonymous 🙂
“If Apple made any effort, at all, to properly communicate with artists and labels about Apple Music, none of these misleading or inaccurate statements would be getting so much attention here (or causing so much stress and anger for some in the music industry).”
Spot on!
And yes, Apple deserves what it gets. (This from a natural born Apple fanboy.)
—————————————
🙂 The real Anonymous 🙂
Anton is simply mistaken. Apple will refuse to promote releases in the iTunes store that are not available on Apple Music, but Apple will not remove content from the iTunes store.
Meanwhile, back at iTunes/Apple Music: https://www.youtube.com/watch?v=vNrG5lD2zmQ
In other words, they’re willing to keep you in the fields, but there’ll be no promotion in the mansion?
Disclaimer: Please note that my comment is not intended to be racist in any manner whatsoever, but rather a humorous observation of what appears to be a very tense situation – a bit of comic relief.
Apple purchased Beats for a reported 3.2 billion dollars. Without licensing from the major labels, Apple might as well kiss that 3.2 billion dollars goodbye don’t you think, so who do you think is “running” the “mansion?” Who do you think pushed for those contract terms? And since we’re on the subject, where is the Apple Music contract with the major labels? I am willing to guess that if you’re upset now, all hell would break loose after comparing the terms offered to the independents and those “offered” to the majors, but I may be mistaken and they may be same in either case – I guess that is for you to decide. As for me, I refuse!!!
Why don’t you actually do some digging before you just trust some twitter guy. I have no idea if he’s right or wrong, but jesus christ, isn’t this a news site?
First, he’s not ‘some twitter guy’.
Second, reporters use the available industry sources. Apple isn’t among them, but don’t blame Paul for that.
A reporter worth anything would have contacted some distributors, maybe a label, whatever to actually get a solid fact. You now, build a story. Or is that too much work for people nowadays?
“A reporter worth anything”
Like a Billboard reporter, perhaps?
Guess what — Billboard brings the story, too.
Because Apple fails to communicate with artists and indie labels.
Ok, I’m sorry. This story is clearly chock full of information and is deserving of a Pulitzer. Please accept my apologies for offended you for some reason.
Based on a Twitter account for ‘AppleOfficial’ which is – oh dear – nothing to do with Apple.
Hilarious
anton has been an attention whore for many many years. not to mention he’s bipolar (thats a fact). you gotta take his shit with a grain of salt.
Take this BS article down please. It’s untrue and I hate to see DMN turn into a joke.
“It’s untrue”
So, you’re Tim Cook?
Every time you think DMN reached the bottom in journalism quality, they manage to reach new lows. You guys are incredible !
You have established distributors like Tunecore or Distrokids telling to their customers they HAVE the choice to use Apple Music or keep only iTune and you chose to make a headline from some unverified Tweet ? I guess journalism on this website is definitely dead now…
“now”?
What if Apple tried the opposite approach as far as paying licenses, suppose they offered three months free AppleMusic to customers AND at the same time told all major labels, independent labels and music publishers that they will pay 100x the highest royalty offered by Pandora, Spotify, YouTube etc. Apple can certainly afford it.
Do you know what would happen?
Every Fed antitrust lawyer and every state AG would file an investigation into Apples monopoly power grab.
Maybe Apple is behaving just like all of the other digital streing companies who are paying nothing or next to nothing because that’s the business they are in and anything slightly friendlier to content providers will be inviting lawyers to subpoena their books.
Just speculating none of this is necessarily so
I don’t think that’s the right way of looking at it. Here’s the problem:
For a new streaming service, you need to get consumers. The best way to get consumers at first is always to buy them. A free trial is a way of buying a new consumer, and it’s a marketing cost.
The issue is “who pays for the marketing cost? The service, or the creators who will supply content to the service?”
Factors:
The success of Apple Music is more important to Apple than to labels/artists.
The benefits that would result from Apple Music’s success would, from the information currently available and basic reasoning, be greater for Apple than for any individual label/artist (and arguably even greater for Apple than all of them combined).
Apple can easily afford the marketing costs, many labels/artists can’t.
Under these specific circumstances, Apple’s decision to expect that artists and labels subsidize their marketing costs is understandably viewed as a bit of a dick move.
Isn’t it also a bit counterintuitive to sell digital downloads as well as streaming service subscriptions?
If the subscription were more closely tied to the individual user’s consumption and value received, then it would likely be okay (just like Honda can successfully both rent and sell cars, as long as the prices reflect the relative costs to the business/value received by the consumer).
But with the specific business models (fixed price downloads & unlimited streaming subscription) that Apple uses, I suspect that the unlimited streaming subscription will in fact hurt sales and total revenue from music.
It’s important to remember that Apple doesn’t care about making money from music (Apple makes its money from hardware; music is just a way to enhance the appeal of the hardware). By extension, it’s logical to assume that Apple doesn’t care whether you make money from music either. Apple is dangerous to the music industry precisely because it isn’t looking to make money from music.
I think Apple has a main objective, a long-term goal, specifically, Apple actually intends to make money from their non-interactive radio service and plans to do so by paying the least amount of royalty payments possible.
Though I did not click on the contract posted by DMN to read the terms offered to the independent labels out of an abundance of caution, I read all of the comments. It is for that reason I am quoting from the post of “HELP PLEASE!” which shows, in part, the following:
“Exhibit K (Radio Service), Section 1(o)…Page 45.
‘Royalty Bearing Performance” means each Performance of an individual sound
recording through the Radio Service, EXCLUDING: (i) up to six (6) Performances of
individual sound recordings which are not rendered for more than twenty (20) seconds in
duration each (i.e., skips), per Listener per hour per channel or station; (ii) up to two (2)
Performances per Listener Hour (measured in the aggregate across all Listener Hours in a
given month) where the Performance is either (A) of Listener Matched Content, (B) a
Complete-My-Album Play, or (C) a Heat-Seeker Play; and (iii) ANY PERFORMANCES TO LISTENERS WHO ARE CLOUD SERVICE USERS.'” [Emphasis mine.]
I also learned that “[w]hen you sign up for iCloud, you automatically get 5 GB of free storage” and “iTunes Match lets you store your entire music collection in iCloud, even songs you’ve imported from CDs or purchased somewhere other than iTunes.”
Simply put, the more Apple customers that use iCloud for music, photographs and such, and the more digital downloads Apple sells in addition to the physical CDs the record labels sell, the less royalties Apple has to pay for performances broadcasted on their non-interactive radio service.
Now imagine the number of consumers that use iCloud at the present time for music and such and further imagine how many new consumers will not only be using iCloud, but will also subscribe to the Apple Music streaming service during the three-month free trial period and beyond – now imagine the number of “Royalty Bearing Performances” Apple will thereafter be required to pay to rights holders for the music performances broadcasted 24/7 through its worldwide (100 country) Beats 1 non-interactive radio service.
Will it matter to Apple whether or not those three-month free trial users will thereafter become paying subscribers after the three-month free trial period has expired ESPECIALLY after those users have already uploaded all of their NON-“Royalty Bearing Performance” music on their iTunes players to their iCloud?
BUT WAIT, there is more.
Spotify’s definition of “Royalty Bearing Play” is as follows:
“Royalty Bearing Play” means any Stream or playback of a Cached Download of an item of audio or
audio-visual content (excluding Streams or playbacks of Local Files, advertising and permanent audio
downloads purchased from the Service) via the relevant Service (or part thereof) with a minimum duration of
thirty (30) seconds.
BUT WAIT, there is more.
Please correct me if I am mistaken, but isn’t it true that statutory rates in the United States are set by the Rate Court’s determination of a “reasonable” rate based upon “what a willing seller and buyer would negotiate in an arm’s length transaction?” If that be so, then I wonder what a “reasonable” rate would be after all is said and done?
BUT WAIT, there is more.
I wonder what the value of Pandora stock will be on July 1, 2015 (or even tomorrow for that matter)?
Are you seeing what I am seeing? I may be mistaken, so I leave it to you to draw your own conclusions.
PLEASE NOTE that the definition of the Spotify “Royalty Bearing Play” can be found in the Spotify/Sony Music contract previously posted by DMN, therefore, I do not know whether or not that definition is still valid.
“Royalty Bearing Play” means any Stream or playback of a Cached Download of an item of audio or audio-visual content (EXCLUDING STREAMS or PLAYBACKS OF LOCAL FILES, advertising and PERMANENT AUDIO DOWNLOADS PURCHASED FROM THE SERVICE) via the relevant Service (or part thereof) with a minimum duration of thirty (30) seconds. [Emphasis mine.]
“I think Apple has a main objective, a long-term goal, specifically, Apple actually intends to make money from their non-interactive radio service and plans to do so by paying the least amount of royalty payments possible.”
It’s important to remember that Apple doesn’t care about making money from music (Apple makes its money from hardware; music is just a way to enhance the appeal of the hardware). By extension, it’s logical to assume that Apple doesn’t care whether you make money from music either. Apple is dangerous to the music industry precisely because it isn’t looking to make money from music.
You are both SO COMPLETELY WRONG.
ITunes revenues are like a drop of water in the ocean for Apple. They make 90% of their money on hardware sales.
Apple could shut down iTunes tomorrow, and it wouldn’t even register on their radar. And that is precisely why Apple has been so fair with independants on iTunes. Whether you’re Universal or Joe Blow Indie, you still get the same cut.
When Apple launched iTunes, they could have kept it restricted to labels. But they didn’t. They opened it to anyone. That was unheard of before.
They have nothing to gain by ripping off artists. unlike other services.
There’s no serious money to be made from that. The money they would make form indies wouldn’t even pay for the catering at their offices. Wich ironically makes them more trustable in the long term than , say, Spotify ( who by the way, are gearing up for their stock market entry). The biggest revenue Apple gets from iTunes is lots of compliments from artists, wich is free advertising, wich leads to more sales of hardware for Apple, wich leads to serious money.
The only faux-pas and crass move they did in their long career is not compensating indies for the 3-months free trial of Apple Music.
“They have nothing to gain by ripping off artists”
…but everything to lose. They’ve always used artists and music to move hardware units, but that’s so over now.
Apple Music even lost 1989.
Ouch.
“Whether you’re Universal or Joe Blow Indie, you still get the same cut.”
That may be true, but do the independent labels get the same deal? Specifically, I am wondering whether or not the major labels and publishers have the exact same “Royalty Bearing Performance” clause in their contracts with Apple? Hence, the importance of being able to review and compare the contracts between the major labels and publishers with the contracts being offered to the independent labels and publishers and/or aggregators. If the contractual terms are the same, it stands to reason that there should be no problem right?
I would think not so as I suspect that the major labels and publishers would have realized and not overlooked the effects that that particular clause would have on the future performance revenues for both the “recording artists” and “songwriters” regarding the global round the clock performances of the songs on their catalogs through Beats 1 radio (it is worthy of note that Apple has sold over 1 billion iPhones around the world to date).
I have no knowledge of this, but perhaps the major labels and publishers have already received a multi-billion dollar advance in exchange for including that particular clause in their contracts which, as history shows, will most likely be shared with their respective “recording artists” and “songwriters” the same way as the revenues that were generated from the Beats sale to Apple were a couple of years ago?
If the major labels and publishers did not realize the consequences of including and agreeing to that particular clause in their contracts with Apple, perhaps Apple will simply release them from that obligation and agree to pay the royalties for each and every performance of those songs on Beats 1 radio? Maybe Apple will also do the same for the independent labels?
Furthermore, if all is as you say it is regarding Apple’s interest in music, perhaps Apple will even agree to pay royalties to all of the record labels and publishers and independent artists for each and every performance of those songs through Apple Music during the three-month free trial period and beyond simply because they will sell more hardware in so doing?
It completely baffles me why anyone thinks the independent’s should get the same treatment, deals, and contracts as the majors. Can anyone please explain the logic? Even when the independents and aggregators pool together, they become a substantial share of the market but they still pale in comparison to the outsized share of the market and revenues of the majors. This is not to demean the artists or labels — I mostly listen to independent or even completely unsigned artists myself. But why should Apple provide the same attention it gives to four companies that will account for, say, 50-60% of the industry (I’m not sure what the current split between majors and independents is, but bear with me…) who’s presence will most certainly make or break the success of their venture as it it gives to hundreds, if not thousands, of small labels representing thousands, if not tens or hundreds of thousands, of artists who will not guarantee the success or failure of the venture while actually being more demanding by the very nature of their “independent” status? It just doesn’t make sense to me.
Yes, Apple is a powerful, hard bargainer that tries to forge contracts with as little variation as possible to make things simple for them. They value the most valuable producers the most and put satisfying them foremost in their priorities. They then try to offer similar, relatively equitable terms to the lesser players. These lesser players are often more demanding (independents often pursue more alternative streams of business or uphold a greater aesthetic standard over a business and popularity standard that makes contracts more difficult). Independent music is great and valuable and deserves a seat at the table, but I can’t fathom why they deserve the same treatment (particularly while they themselves demand greater than equitable treatment). Please can someone help me understand this argument?
To expand on my argument, in my own business, I often have small, one-off customers who will never return for business or provide any additional revenue… this may result in a transaction that is worth a few dollars but may actually COST me. I am happy to have the business and want to treat them well. I also have larger clients who continue to bring me recurring business and jobs that lead to hundreds and thousands of dollars or revenue and substantial profit. I don’t disvalue the small, one-off transaction, I’m not going to deny them, but guess which of my customers I am going to treat more favorably, with greater priority? Would anyone have a problem with this?
Well, here’s the thing: as none of us are in key decision-making roles at Apple, this is all speculation, no matter how strongly we believe one way or another.
I happen to disagree with your perspective, but there’s no harm in that – you seem to consider Apple’s decision to open iTunes to indies as a benevolent act for artists; I consider it simply a very smart and calculated business move, from Apple’s perspective.
But fundamentally, you and I agree that the money from music isn’t a motivating factor for Apple – the motivation is to offer services that help drive Apple’s hardware sales (whether by keeping users hooked in its system, as I contend, or through great advertising in the form of “compliments from artists,” as you contend – though it’s likely that both are valid).
In any case, there’s no point belaboring which is “right” – time will tell, and perhaps all of our theories will be proven incorrect. For now, it is enough to know that there is cause (from your argument specifically, this cause comes from Apple’s recent “faux pas” and “crass move”) for artists and labels to monitor and carefully evaluate Apple moving forward.
Sarah, though your last comment may have solely been a reply to “Whawha’s” comment, there were key elements stated therein that compelled me to make answer, therefore, out of an abundance of caution, and for greater certainty, I disagree with the substance of your comment and characterization of the situation in its entirety.
I do love clarity, so I appreciate your comment. 🙂 I was responding specifically to Whawha in that comment.
What precisely do you disagree with, though?
Do you disagree that we, as “outsiders” to Apple and with little/no inside information from Apple, are necessarily speculating as to what Apple’s long term plans and/or motives might in fact be?
Or do you disagree with my statement that, regardless of one’s suspicions or position on Apple Music, there is (at the very least) cause for attention and caution with regards to Apple Music? Given your previous comments, I’d be surprised if this statement is the one with which you disagree. Or perhaps it was my earlier comment on Apple’s motives not being to directly profit from music?
Sarah, in answer to your question, “What precisely do you disagree with, though?” My answer is: This . . .
The headline for this particular article is: “Breaking: Apple Will Remove Any Artist from iTunes Who Refuses to License Streaming…”
I assert that Apple (iTunes, Apple Music, Beats Music) and any other digital streaming or analog broadcasting service shall immediately cease and desist broadcasting performances of any and all unauthorized digital masters (the technology) by means of digital or analog transmission, or otherwise, the authorization for which, for greater certainty, I do hereby withhold, and I further demand the immediate removal of any and all copies and derivative works of said unauthorized digital masters (the technology) from the market until such time as they are duly authorized to do so by all rights holders of said unauthorized digital masters (the technology) in accordance with HARPER & ROW v. NATION ENTERPRISES, 471 U.S. 539 (1985).
So the issue is not that Apple will remove any artist from iTunes who refuses to license streaming, but rather Apple shall remove all content of any artist (whether such be a composer, songwriter, recording artist, producer or even an inventor for that matter) who refuses to license the streaming of said content (until such time as they are duly authorized to do so).
If any artist whether such be a composer, songwriter, recording artist, producer or even an inventor for that matter who is not bound by a contract or has not otherwise assigned or released their rights to the creative or intellectual content that they refuse to license, then upon what premise or by what right would Apple or any other streaming service for that matter rely upon to do so?
Furthermore, upon what premise or by what right would Apple or any other digital download service rely upon to, including, but not limited to, sell, rent, or lease said content without first being duly authorized to do so?
Harper & Row v. Nation Enterprises makes clear that, “The right of first publication encompasses NOT ONLY THE CHOICE WHETHER TO PUBLISH AT ALL, but also the choices of when, where, and in what form first to publish a work.” [Emphasis mine.]
I have not yet made my choice.
You are mistaken. Firstly, you are clearly over-reading the iCloud user clause. This clearly refers to specific songs stored in iCloud not receiving a corresponding performance royalty, not whether or not anyone uses iCloud for anything. Clearly, the performance of some song being excluded for qualifying as a “performance” must correspond to the actual song. Legalese is tough, but reading it to mean whatever you’d like it to mean is not productive.
Secondly, the Spotify definition has a similar carve-out but does not have the Apple limit of 6 songs per hour. Obviously, more songs are likely to have been digitally downloaded, iTunes Matched, or stored in iCloud than Spotify has users that have purchased or downloaded songs, but Spotify’s lack of success in digital music “ownership” doesn’t make their carve-out less when it is completely uncapped.
Isn’t it also a bit counterintuitive to sell digital downloads as well as streaming service subscriptions?
+1
Umm, NO? As someone who currently streams and purchases music I see nothing counterintuitive about it whatsoever and want someone providing both options.
It seems to me that those who are arguing most vehemently against Apple’s streaming terms need to cling to it being counterintuitive and stupid while claiming that the download/purchase business will cease to exist the moment Apple Music launches in order to puff themselves up and find some sort of quasi-logical economic argument outside of any true logic to argue that Apple providing music to be purchased for a one-time fee AND for music to be streamed based on a recurring subscription is somehow worse than a service that is primarily freemium or any other service.
That is counterintuitive to me.
Apple Music:
On February 6, 2014, “Apple . . . announced that music fans have purchased and downloaded more than 25 billion songs from the iTunes Store” and that they were further “[a]veraging over 15,000 songs downloaded per minute.”
701,265 minutes (or 16 months) x 15,000 downloads = 10,518,975,000 downloads (give or take a “mil”).
25,000,000,000 downloads + 10,518,975,000 downloads = 35,518,975,000 downloads (give or take a “mil”).
Simply stated, as more Apple Music users upload their iTunes digital downloads and compact discs to their iCloud, the number of “Royalty Bearing Performances” will significantly decrease.
In light of the vast number of alternate sources by which Apple Music users could have obtained digital downloads such as Bandcamp, the number of digital downloads uploaded by Apple Music users to their iCloud is more likely than not to be significantly higher.
Apple digital download enthusiasts and compact disc enthusiasts will most likely upload their digital downloads and compact discs to their iCloud and supplement their existing music catalogs by purchasing further digital downloads and compact discs and upload them to their iCloud rather than subscribe to the Apple Music service.
Then there is the matter of the three-month free trial to take into consideration which one source estimates to be “worth a whopping US 4.4 bn of customer acquisition costs (CAC) to Apple.
Source: http://www.musicbusinessworldwide.com/apple-music-3-month-trial-is-worth-4-4bn/
Beats 1 free multi-channel ad-supported worldwide 24/7 radio service:
A more significant number of Apple supporters will most likely just tune-in to the free ad-supported Beats 1 radio service rather than subscribe to Apple Music.
Then as regards the radio service there is still the matter of “Section 1(o)” which is made even more significant if that was even possible in view of the iTunes 35,518,975,000 digital downloads (give or take a “mil”) plus the number of digital downloads obtained from alternate sources and the number of compact discs sold to date which will more likely than not be uploaded to a Apple Music users free 5 GB iCloud:
“Exhibit K (Radio Service), Section 1(o)…Page 45.
‘Royalty Bearing Performance” means each Performance of an individual sound
recording through the Radio Service, EXCLUDING: (i) up to six (6) Performances of
individual sound recordings which are not rendered for more than twenty (20) seconds in
duration each (i.e., skips), per Listener per hour per channel or station; (ii) UP TO TWO (2)
PERFORMANCES PER LISTENER HOUR (measured in the aggregate across all Listener Hours in a
given month) where the Performance is either (A) of Listener Matched Content, (B) a
Complete-My-Album Play, or (C) a Heat-Seeker Play; and (iii) ANY PERFORMANCES TO LISTENERS WHO ARE CLOUD SERVICE USERS.’” [Emphasis mine.]
So my question to you is, exactly which “primarily ‘freemium'” service did you mean?
APPLE MUSIC:
On February 6, 2014, “Apple . . . announced that music fans have purchased and downloaded more than 25 billion songs from the iTunes Store” and that they were further “[a]veraging over 15,000 songs downloaded per minute.”
701,265 minutes (or 16 months) x 15,000 downloads = 10,518,975,000 downloads (give or take a “mil”).
25,000,000,000 downloads + 10,518,975,000 downloads = 35,518,975,000 downloads (give or take a “mil”).
Simply stated, as more Apple Music users upload their iTunes digital downloads and compact discs to their iCloud, the number of “Royalty Bearing Performances” will significantly decrease.
In light of the vast number of alternate sources by which Apple Music users could have obtained digital downloads such as Bandcamp, the number of digital downloads uploaded by Apple Music users to their iCloud is more likely than not to be significantly higher.
Apple digital download enthusiasts and compact disc enthusiasts will most likely upload their digital downloads and compact discs to their iCloud and supplement their existing music catalogs by purchasing further digital downloads and compact discs and upload them to their iCloud rather than subscribe to the Apple Music service.
Then there is the matter of the three-month free trial to take into consideration which one source estimates to be “worth a whopping US 4.4 bn of customer acquisition costs (CAC) to Apple.”
Source: MusicBusiness Worldwide: If Apple Music’s Free Trial Is Worth $4.4BN Why Aren’t Indies Being Paid?
BEATS 1 FREE MULTI-CHANNEL AD-SUPPORTED WORLDWIDE 24/7 RADIO SERVICE:
A more significant number of Apple supporters will most likely just tune-in to the free ad-supported Beats 1 radio service rather than subscribe to Apple Music.
Then as regards the radio service there is still the matter of “Section 1(o)” which is made even more significant if that was even possible in view of the iTunes 35,518,975,000 digital downloads (give or take a “mil”) plus the number of digital downloads obtained from alternate sources and the number of compact discs sold to date which will more likely than not be uploaded to a Apple Music users free 5 GB iCloud:
“Exhibit K (Radio Service), Section 1(o)…Page 45.
‘Royalty Bearing Performance” means each Performance of an individual sound
recording through the Radio Service, EXCLUDING: (i) up to six (6) Performances of
individual sound recordings which are not rendered for more than twenty (20) seconds in
duration each (i.e., skips), per Listener per hour per channel or station; (ii) UP TO TWO (2)
PERFORMANCES PER LISTENER HOUR (measured in the aggregate across all Listener Hours in a
given month) where the Performance is either (A) of Listener Matched Content, (B) a
Complete-My-Album Play, or (C) a Heat-Seeker Play; and (iii) ANY PERFORMANCES TO LISTENERS WHO ARE CLOUD SERVICE USERS.’” [Emphasis mine.]
So my question to you is, which “primarily freemium” service did you mean?
Of course, “Apple’s half-billion registered users with active credit cards” will more than likely upload all of the digital downloads and compact discs to their iCloud during the Apple Music three-month free trial period.
It is noteworthy that by 2007, 200 billion compact discs had been sold worldwide.
The fast approaching scheduled June 30, 2015 Apple Music launch date will more than likely contribute to “one of the largest and fastest growing bases among technology bases” in that “Apple’s half-billion registered users with active credit cards” will most likely take advantage of the Apple Music three-month free trial and upload all of the digital and compact discs to their iCloud and, if upon doing so they use up all of the “5 GB of free storage” and find that they require more space, they will most likely purchase more iCloud storage space which will significantly reduce the number of “Royalty Bearing Performance[s]” as they will be considered, among other things, in accordance with the proposed indie contract, “Listener Matched Content” whilst, if you can believe it, increasing Apple’s iCloud storage monthly or annual revenue.
So whether or not those three-month free trial period users actually become subscribers of Apple Music, they will more than likely become iCloud storage monthly or annual plan customers.
It is also worthy of note that “[w]ith its current user base of 500 million, Apple could generate as much as a billion dollars of annualized revenue through an ‘iRadio’ service,” and as reported by the appleinsider article referenced below, “if 40 percent of Apple’s current install base were to adopt iRadio, it would generate $883 million in revenue per year, while a 50 percent penetration would mean $1.1 billion.”
Meanwhile, though the influx of potential Apple Music three-month free trial period users will be intense initially and may achieve a number of subscribers, the three-month free trial period could potentially last for years.
___________________
“Apple’s half-billion registered users with active credit cards one of the largest and fastest growing bases among technology companies. In fact, according to data compiled by Morgan Stanley, Apple is only second to Facebook in total number of user accounts as of 2012.”
Source: appleinsider .com/Apple’s 500M user accounts second only to Facebook, viewed as key driver of future growth
“iCloud storage pricing
When you sign up for iCloud, you automatically get 5 GB of free storage. If you need more storage, you can upgrade to a larger storage plan.
You can upgrade your iCloud storage from your iPhone, iPad, iPod touch, Mac, or PC, and you can choose a total of 20 GB, 200 GB, 500 GB, or 1 TB. After you upgrade, we’ll bill you monthly.[1.] If you purchased an annual plan before September 10, 2014, your account was upgraded to a new annual plan. If you need to change your storage plan, you must choose a monthly plan. See the monthly pricing per country below.
North America, South America, Latin America, and the Carribean
United States (USD)
20 GB: $0.99
200 GB: $3.99
500 GB: $9.99
1 TB: $19.99
Canada (CAD)
20 GB: $0.99
200 GB: $3.99
500 GB: $9.99
1 TB: $19.99
Mexico (MXN)
20 GB: $12
200 GB: $49
500 GB: $129
1 TB: $249”
Et cetera, et cetera….
Source: support.apple .com/en-us/HT201238
[1.] For countries where the local currency isn’t supported, storage upgrades are billed in U.S. dollars (USD).
Taylor Swift may speak for the people in her social circles, and Apple may speak for the people in their social circles, but with all due respect, neither Taylor Swift nor Apple speak for me. In fact, my position is not only diametrically opposed to the sentiments echoed in her statement and particularly the reduction of the issues to one of non-payment of royalties during the three-month free trial period proposed by Apple when, obviously, the issues are far more important and most definitely more than singular as Taylor Swift’s statement would lead you to believe. It is my opinion that Apple’s rapid response to Taylor Swift’s statement with an offer of an undisclosed per stream payment of royalties during the three-month free trial period was effected for the purpose of avoiding the fundamental issues at hand rather than dealing with them. In any event, I stand by my original objection and not only do I refuse the offer of payment, I do hereby renew my objection in its entirety.
For greater certainty, as I previously did not make mention of the Beats 1 radio service, I do so now.
Moreover, I have neither published nor agreed to publish any of my work, or otherwise released any of my work or authorized the use of such to any person or entity whatsoever – simply put, I have not consented.
For greater certainty, as I previously did not make mention of the Beats 1 radio service in my prior objection, and though I intended to but for an oversight, I do so now – I adamantly and strenuously object.
DITTO.
“The success of Apple Music is more important to Apple than to labels/artists.”
I don’t buy it. The vast lion’s share of Apple’s revenue and profits comes directly from device sales. Those sales are not being hurt currently by Spotify, Pandora, Rdio, and any number of music alternatives. Apple will only retain less than 30% of the revenue from Apple Music. While the infrastructure costs are less than this less-than-30%, Apple will also be paying for promotion and covering many other costs associated with getting the service up and running and keeping it running. The revenue and profit Apple derives from music (whether download, radio stream, or on-demand stream) or from any other content that they offer for that matter (books, movies, tv shows) has always been an insubstantial bump on their bottom line. Yes, they want to be a leader in music and providing the best services to compliment their ecosystem makes their devices more desirable, but despite the claims of the paranoid, Apple has largely benefited from other music platforms and has not been threatened by or tried to significantly harm music alternatives on their platform.
Meanwhile, we are told by the labels and artists (independent, major, or super pop mega-stars alike) that free streaming is killing their business and way of life.
There is a basic question: is a 3-month, one-time free trial (that will not occur all at once whatsoever, that’s a ridiculous argument, it could roll on for years, Apple will not instantly convert all of its device owners to Apple Music — hell, probably less than 20% of iTunes users purchase music from iTunes more than a decade after the store launched) more or less desirable than the alternative platform that only has about 27% paid subscribers and allows the other 73% of its users to essentially stream all of their music for nearly free (thousands of a percent on the low-quality ad revenue) IN PERPETUITY?
The trial period is not simply customer acquisition for Apple; it is also the current, best weapon against 70% of all music listeners getting unlimited, free music for eternity resulting in mere thousands of a percentage point on low-grade advertising… If music artists’s and labels’s very existences are truly threatened by freemium streaming, I can’t see how they do not benefit significantly more than Apple from this alternative.
Good points.
I agree that Apple doesn’t benefit financially from music (enough for it to matter at least – I mentioned this in other comments here).
And my remarks are premised on an unstated assumption that Apple Music isn’t going to do much better than Spotify in terms of paying users (despite an expected initial growth spurt) – so if that assumption proves to be incorrect, my analysis as to who benefits more greatly from Apple Music’s success would obviously change. But for now the benefits I considered were (1) exclusively non-financial (or indirect) benefits for Apple and (2) financial benefits for artists/labels. In other words, any expected benefit to artists would derive from an increase of revenue; any expected benefit to Apple would be less direct: strengthening user base, keeping people more tightly in the Apple system, driving device sales, perhaps consumer data, etc.
Under this calculation, I still expect Apple to gain more (relatively speaking) than artists and labels gain if Apple Music succeeds.
I would suggest that your assumptions are flawed.
Firstly, Apple Music offers no alternative (beyond existing iTunes options which people had not been and do not seem up in arms about) to paid streaming… I have difficulty seeing how they will be equally bad at converting to paid when there is no alternative to paid. Secondly, Apple Music, from day one, will be in many more markets than Spotify and is very likely going to have a much larger catalog (despite the sturm und dang being generated here and elsewhere about holdouts). Thirdly, Apple’s customers are the precisely the demographic that is more willing to pay for music; certainly in comparison to Spotify who usually acquires users through the freemium alternative first.
Then we can talk about the viability of Spotify as a growing concern. They have recently shown some small success of converting freemium users to paid but at the same time their expenses have ballooned. They continue to need to seek new financing despite their massive valuation and yet their ability to attract investors continues to get worse as their financials worsen. Spotify could easily crater just as Napster, Rhapsody, and many others have done so before. If they somehow manage to navigate to becoming a viable, long-term concern that can be relied upon to exist a decade or two from now, there is almost zero chance that they will ever convert enough of their currently 73% freemium users to better compensate artists more than Apple will as a result of a one-time, non-recurring 3 month trial.
And finally, there is a very simple value proposition: the only area in which music is substantially growing is in streaming. If Apple didn’t provide a streaming alternative, never mind if they are offering a free trial, it’s easy to see that musicians would be worse off — downloads and/or CDs aren’t coming back. So we are asking if a paid option with 3 months free is a better alternative to a service that offers a very comparable paid service but does cover trial royalties BUT who also allows 70+% of their users nearly complete access at no cost whatsoever and remunerates musicians with thousandths of pennies… I have difficulty seeing how that is better for Apple than it is for artists’ if freemium streaming is such a threat as it is believed to be by most.
I do understand and appreciate your point that Apple has a tough task of converting consumers to paid subscribers (of course, this completely flies in the face of those here and other places who claim that on day one every Apple user will instantly sign up and abandon all other musical offerings by Apple thus depriving all musicians all revenue for three months that they would otherwise deserve from Apple…) — it certainly will be a long, hard row.
But it also seems perfectly obvious and logical to me that Apple will have greater success than Spotify in offering nearly an identical service (although admittedly Spotify and others will have advantages from a social or UI perspective— for all intents and purposes, we can call them nearly identical services — the ability to listen to any song on demand from your device as you see fit) at a nearly identical cost to the consumer when it will be in more markets, with a larger catalog, while already having a massive base of loyal users who are demographically-speaking the most capable and most willing to pay and who will receive some additional benefits from pre-existing iTunes features and the integrated nature of Apple’s ecosystem… This is not to mention the already more-than-a-decade commitment Apple has shown to the music industry or the financial and foundational clout that Apple has to outlast and outgrow Spotify over the near-term, never mind a decade out or five decades out (the greatest drawback to the “celestial jukebox” is not knowing if and when the jukebox will get unplugged). Seems like a very weak and flawed assumption that Apple will do just as bad or worse than Spotify in providing artists’ a source of revenue.
Another note: if Apple achieves the same success as Spotify (roughly 25% of their users being paid subscribers) that would very conservatively be 50 million users (taking the very conservative active 200 million iOS/iTunes active user base — some reliable estimates have 600 million active iOS users) which would be 250% of Spotify’s current paid users (20 million). It’s a bit unfair to claim the 200 million number as the potential market for Apple Music but I think it’s fair enough to see that Apple can be much more lucrative for artists than Spotify, whether or not there is a 3-month trial.
And… I think this will be my last note… maybe:
Since Apple reaps an inconsequential amount of revenue/profit from music versus other sources, and since all other alternative musical platforms are available on Apple platforms, AND since Apple will be bringing Apple Music to both Windows and Android (yes, Apple is reserving some features for the more integrated Apple ecosystem but moving to the largest competing platforms completely makes any direct or lock-in benefits virtually non-existent), the value that Apple accrues from Apple Music is largely reduced to the perception that they are a company that values and cares about music. AND… it also turns out that the perception that the largest, most powerful technology company values music doesn’t better them alone… it also benefits the musical artists themselves.
I’m very hard-pressed to see how Apple Music serves Apple more than it serves the music industry.
Tim,
Again, you make some good points. I’m not sold, but I certainly understand where you’re coming from. Unfortunately, I don’t have time today to give you the meaningful responses that your comments deserve, so I’m going to chalk it up to: we’ll find out, won’t we? 🙂
In the meantime, my (business) advice for independent artists/labels is to take your time to evaluate options and the real-world results you’ll face from those options. Even though the rampant speculation is exciting (and hopefully helpful in considering the situation and coming to your own conclusions), make your decisions based primarily on what is in fact known to be true, rather than on what anyone (myself included) thinks or theorizes or suspects.
“The vast lion’s share of Apple’s revenue and profits comes directly from device sales.”
“The revenue and profit Apple derives from music…has always been an insubstantial bump on their bottom line.”
35,518,975,000 iTunes downloads (give or take a “mil”) x (let’s say) $.30 = $10,655,692,500 USD
“Apple will also be paying for promotion and covering many other costs associated with getting the service up and running and keeping it running.”
What of the mega-million dollar value of celebrity endorsements? Are you suggesting that Apple will be paying the recording artists fair market value for their endorsements of Apple Music and Beats 1 radio?
Then there is the matter of the three-month free trial which one source estimates to be “worth a whopping US 4.4 bn of customer acquisition costs (CAC) to Apple.”
“If music artists’s and labels’s very existences are truly threatened by freemium streaming, I can’t see how they do not benefit significantly more than Apple from this alternative.”
Hell, just read my post above in response to your comment to my question, “Isn’t it also a bit counterintuitive to sell digital downloads as well as streaming service subscriptions?”
I don’t know which reaction to have first:
@ I thought being able to remove your music was a good thing.
@ Oh noes! Apple is not a mix of raindrops on roses and whiskers on kittens!
@ You wanted an all-Apple universe, you whiny, Spotify-hating bitchez. You got it. Kisses!
This, as with almost every direct streaming license, comes down to who you select to handle your digital distribution (or assign your rights to).
In Apple’s direct deals they are not threatening to take down from their iTunes store the music of artists or labels who elect not to sign the Apple Music streaming license.
ADA, on the other hand, held a town hall call yesterday with their distributed labels and when asked directly if labels/artists could elect not to be on the streaming platform ADA responded by saying, “if you have assigned your rights to us, no, that is not going to be an option”. Understand that is FAR different from Apple threatening those labels/artists. It is ADA carrying the water of their corporate parent Warner who likely got some remuneration (money, guaranteed minimums, promises of other special considerations inside the Apple ecosystem) to deliver their indies whole.
On the other end of the spectrum is Distrokid who has been pretty public saying that their clients can stream or not and still be on the iTunes store.
Artists – and indie labels – have to choose wisely when putting their music with a company. Is the company going to serve your rights or just grab your rights for their own benefit.
p.s. I don’t work for or have any affiliation with Distrokid. Just going by what I’ve read on DMN across these Apple articles.
Mindblowing news:
Taylor Swift’s 1989 will not be available on Apple Music.
This is completely untrue.
There is a lot of confusion, and I suspect Apple does not want people to know they can opt out of Apple Music and leave the music on itunes. I just did that — opted out of Apple Music, although my aggregator insisted that Apple wouldn’t let them, when I insisted, they backed down and said that the option had just become available.
Streaming is killing music, it’s worse than torrenting because large companies like Apple, the majors, even the aggregators, are making money on our work, but there is just nothing left for artists.
“I just did that — opted out of Apple Music, although my aggregator insisted that Apple wouldn’t let them, when I insisted, they backed down and said that the option had just become available”
Who’s your aggregator? Tunecore?
If I may answer your question, I’m using Tunecore, and when you log into your account, you now get a pop up asking you whether you want to join Apple Music or not. So, yeah, it’s completely optional.
The only thing, I wish you could select wich albums to put on on streaming and wich to exclude. It seems an all-or-nothing option so far.
Thank you, Whawah. I asked them earlier this week, but they couldn’t tell. Guess they didn’t want to lose thousands of customers to Distrokid, then…
I don’t understand why they don’t allow windowing, though. Flexibility is important, people don’t want all-or-nothing.
I use routenote. And they are not requiring all or nothing as far as opting in or out.
I mean you could always just make separate accounts anyway, so that would be pretty silly
French Indie Music Industry Joins Apple Music Protest
Today French indie music trade group UPFI joined their US, UK, and French counterparts in denouncing Apple Music’s 3 month free trial which would pay no royalties. “Apple may cause a loss of income which may be considerable for all labels whose activity is based on the release of new products,” they wrote in an open letter to Apple.
SOURCE: Hypebot