A mere day after Apple Music was announced by Apple CEO Tim Cook, an AM contract was leaked to the press which showed that the company would not be paying royalty percentages on plays from the standard three-month trial period that is granted to each subscription to the service. In reaction to this news, indie labels are now criticizing Apple en masse, with gaps in the Apple Music catalog as a possible consequence.
From reading the different interviews with label execs over the last week, the opposition against Apple’s new music streaming service seems to be growing. Alison Wenham, CEO of Australian music trade group ‘the Association of Independent Music’ (AIM), has issued a statement, saying:
“[..] the speed at which Apple has introduced their plans and its lack of consultation with the independent music sector over deal terms (despite what Jimmy Iovine might claim) has left us with the uneasy feeling that independents are being railroaded into an agreement that could have serious short-term consequences for our members’ interests”
She continues to express a collective feeling from her and fellow label executives that Apple is using the assets of often financially meagre indie labels as collateral for its own financial risks. “Essentially Apple is asking the independent music sector to hedge its risk, to fund their customer acquisition programme and to shoulder the financial burden for their global launch.”
Earlier this week American and Canadian indies slammed Apple for the same reason. A2IM, a US body for the interests of the independent music industry that represents labels like Beggars Group, !K7, ATO and Glassnote, described Apple’s tactics as “punching a black hole in music industry income”.
A2IM’s statement makes a threat more or less towards Apple, by hinting that they will not authorize access to its artists, or at least during the first three months after it launching, “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 authorize their content on the service before October 1 [Apple Music’s global kick-off is on June 30th].”
Whether Apple Music will still be interesting when you cannot find artists like The xx, Adele or Arctic Monkeys in their database? To be continued.
Source: Music Business Worldwide,