Some of the world's most important independent record labels are calling bullshit on Apple Music. With good reason!
As Apple Music's launch looms in the distance, many of the most influential independent record labels haven't signed on to the streaming subscription service because Apple's terms are an absolute screw job to anyone who hopes to make any money for their work. That means stars like Adele, Belle & Sebastian, Vampire Weekend, Gil Scot-Heron, and way, way, way more — basically a who's who of indie artists — may end up sitting out the new service.
Yesterday, Beggars Group, the large company that owns a stake in and distributes indie titans Matador, 4AD, XL Recordings, and Rough Trade Records, responded to the rumbling discontent that's cropped up amongst indies over the last week.
Apple have been a wonderful partner for the last decade, and we confidently trust they will continue to be so. We have recently been in discussions with Apple Music about proposed terms for their new service. In many ways the deal structure is very progressive, but unfortunately it was created without reference to us, or as far as we know any independents, and as such unsurprisingly presents problems for us, and for our coming artist releases.
That's two sentences, but there's a lot in there, so let's take a step back.
Beggars is responding to the criticism that's popped up after an Apple Music licensing contract leaked online last week. The central issue here is an item in Apple's agreement, which stipulates that rights holders won't be compensated at all for trial accounts.
That means for the first three months of every subscription, Apple won't pay labels — and by consequence, artists — anything. More broadly, and brutally, this means for the first three months after the service launches, nobody gets paid at all.
Which is crazy in general, but as Beggars Group points out, it's particularly bad in the event that for whatever reason you happen to be an artist with a record coming out during that trial period. Apple Music will attract millions of curious users when it launches and none of them will pay anything to Apple. Imagine you've got a hit during that time period, but because of crappy timing, you don't get any money.
This shouldn't have been news to anyone who is paying attention, though. Beggars Group negotiates its digital deals as part of Merlin, a digital rights agency that represents more than 20,000 independent record labels worldwide. Though Merlin hasn't been vocal on the matter, the interests of those labels were largely articulated by a statement on the matter from the American Association of Independent Music:
It is surprising that Apple feels the need to give a free trial as Apple is a well-known entity, not a new entrant into the marketplace. Since a sizable percentage of Apple's most voracious music consumers are likely to initiate their free trails at launch, we are struggling to understand why rights holders would authorise their content on the service before October 1.
Though the A2IM insists that each label can make its own decision, the case is pretty clearly stated there for why you'd be crazy to sign on to no royalties while millions upon millions of people listen to your music.
So as it stands, a ton of great music won't be on Apple Music at launch. And might not be there well into the fall.
Apple has, of course, locked down deals with the three major label monoliths, and indeed part of the problem here is the likely true presumption that the majors get a better deal than indies when it comes to negotiating streaming contracts. And it's really not treating everyone fairly at all: Independent artists who use the company's Apple Music Connect platform won't be paid royalties at all unless they sell tracks.
Apple does have the opportunity — not to mention the money — to do something truly innovative here. And what's so painful is that it almost did: The licensing fee structure is more favourable to rights holders than what Spotify offers, when it does get around to paying royalties. Obviously, we're still weeks from the service launch, so this could all change. Here's hoping.