Apple Music effort may be thwarted by Indie labels

Apple Music free trial not paying artists
REUTERS/Robert Galbraith

Slated to launch in late June, Apple Music represents Apple's attempt to once again reclaim the leadership position in digital music, a crown it has arguably lost with the recent rise of streaming sites such as Spotify and Pandora.

When Apple Music launches, it will come with a free three-month trial period. The thing is, Apple during this trial period will not be paying any royalties to music labels. In exchange for this temporary reprieve, Apple has agreed to pay music labels a higher royalty rate once the trial period expires. While this compromise works for some, not every one is on board.

According to The Telegraph, Andy Heath, who currently serves as the head of UK Music, isn't keen on the idea at all, claiming that it will "literally put people out of business."

With only two weeks until Apple Music is due to launch, it could leave the service with large gaps in its catalogue. Adele's last album, 21, is the biggest selling of the decade, for instance.

Mr Heath said: "If you are running a small label on tight margins you literally can't afford to do this free trial business. Their plan is clearly to move people over from downloads, which is fine, but it will mean us losing those revenues for three months."

"Apple hasn't thought this through at all and it's not like them. They can't spring a contract like this on us three weeks from release."

It's an interesting and valid point, especially when one considers new releases. Say you have an artist like Adele who comes out with a new album next month. Labels would be missing out on the most lucrative portion of an album's release because a) there's no incentive to purchase and b) royalty payments from Apple Music would be non-existent.

It'll really be fascinating to see how consumers take to Apple Music and whether or not there's a lot of demand for a worldwide radio station and curated music playlists. Of course, one of the biggest advantages Apple Music has is that it will reside within the Music app right on the prime piece of digital real estate that is the iOS homescreen.

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