Yesterday, famous artist Taylor Swift wrote a blog post bout how she will hold back from Apple’s streaming music service, because Apple wanted not to pay labels for the three months of trial mode.
“We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation” and the internet went crazy. Crazy to the levels of having senior vice president of Apple Eddy Cue react on Twitter and promise Swift that they will actually pay the artists for streaming, even during the trial period.
Last year, Taylor Swift took Spotify to the battle when she announced plans to leave the streaming service, and made the CEO of the company Daniel Ek reveal the financial strategy of the company to defend the company. Today she took another service to the battle and in 400 characters of a Tumblr post changed the royalty strategy of Apple Music. Apple had planned to offer users a three-month free trial and it had negotiated deals with the major labels to not pay rights holders royalties during these trials and instead pay a tiny bit more in royalty rates afterward. But, looks like things changed.
#AppleMusic will pay artist for streaming, even during customer’s free trial period
– Eddy Cue (@cue) June 22, 2015
3 companies control 70% of the global music market.
Universal Music Group, Sony Music Entertainment and Warner Music Group, are considered the Big Three labels that control 70% of the global music market and roughly 80% of the United States music market. Taylor Swift is part of Big Machine Records that distributes music through Universal Music Group – the second largest music publishing company in the world.
Radio is one of the key ways to distribute your music. The problem: again as an artist you need to have a contract with a major label. Why, because even here there’s a handful of companies that own the radios, the most prominent being iHeartMedia Inc. This means as a system they dictate the playlists and for new / independent artists this means no space.
Spotify is one of those companies that is trying to change this landscape in a global level and the major labels are somewhat not happy about it. Apple Music is the next big player in full authority.
5.5 million streams per month for a minimum wage!
There’s a really nice post on Medium by Matt Atkins, which brakes down how artists get paid as well.
“Currently, on every $9.99 traditional digital album sale, the artist roughly nets 94 cents less than 10%. The record label (presumably one of the major three) takes the lion’s share at roughly $5.35, whopping 53%. And Apple gets the remaining $3.70, their standard 30% cut. [Source: Investing Answers]”
“In a streaming model, these figures are even further diminished and the artist receives even less per stream. One viral infographic estimates the necessity of 5.5 million Spotify streams per month to produce a minimum wage income for an artist.”
Matt Atkins ends the blog with the following “Three companies dictate what and who the world hears. One company is bringing us a little bit closer to a future where those three companies are no longer needed, where artists are truly empowered and compensated fairly.”