Late last week, Taylor Swift released a rather eloquent open letter to Apple about the company’s plan to not pay royalties to artists during its three month free trial. She found Apple’s actions to be “shocking” and “disappointing.” Over the weekend, Apple blinked–I think.
Apple’s no royalties plan confused me from the start. Was Apple really planning to use copyrighted material for its business without paying for the privilege? Were they doing this unilaterally? If they were, how could they do so legally? Weren’t they risking a massive multi-billion-dollar lawsuit for copyright infringement?
Or was there more to the story?
They might be the biggest company in the world, but Apple still has to play by the rules. When I first heard of the story, I assumed that this was a negotiated deal with rightsholders: labels, publishers and whomever else owned and controlled the music in the Apple Music library. Here’s how I imagined the conversation to go.
“Hey, record labels! Let us stream music for free during our three-month trial.”
“F**k you. Pay us.”
“Fine. We’ll just dig into our billion-dollar bank account. But you know that we’re going to kill this free trial, right? And then after that, every user will have to pay. It’ll be like how we quietly compensated Universal for lost sales when we gave away that U2 album.”
“So you’re going to get rid of the free tier just about every other streaming company offers? The feature that we really, really, really hate?”
But then it was leaked that Apple wasn’t going to pay royalties, which turned into a PR disaster. And with Ms Swift’s open letter, things reached frenzy. So Apple relented. From Billboard:
Apple has decided to change course and pay labels for the rights to stream their music during a 90-day free trial. The move comes after Taylor Swift penned an open letter to the hardware giant, writing that she found the company’s insistence “disappointing” and shocking.
In a tweet, senior vice president of internet services and software Eddy Cue wrote that Apple would pay artists during the 90-day period.
In an interview with Billboard, Cue elaborated that it was Swift’s letter that turned him around on the issue. “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.”
But hang on. That’s only part of the plan–and this is the part was poorly communicated by Apple. From Billboard again:
Cue added that Apple had heard the same “concern from a lot of artists,” noting that it was “never our intent” to not compensate artists, rather they were planning to originally negotiate a higher royalty rate, which they will stick with.
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.”
So Apple was going to pay artists but only after the 90-day free trial was up–and that payment was going to come in the form of a higher-than-normal royalty rate. Have I got that correct?
Kudos for Apple for coming to their senses over this, but I would have loved to have been in on the weekend meetings at 1 Infinite Loop as executives grappled with this PR disaster.