Apple no-pay-for-plays streaming risks indie boycott

The independent music sector may opt-out of Apple Music – at least for its launch – because of the decision by the $731bn-valued giant to pay musicians and composers the big fat round sum of $0 for music streamed during the three-month trial period. Allied to anxieties about cash flow, it means Apple Music could roll out on …

[Anonymous Coward]

One of these days

A large, rich US corporation is going to Do the Right Thing and fund small content providers to kick start a service from which it will ultimately benefit financially, instead of screwing them.

It will happen about the same time a large British supermarket stops demanding that suppliers pay for point of sale and BOGOF promotions in their stores.

At about the same time, Satan will stick a thermometer on the gate of red hot iron guarding the entrance to Nether Hell, the home of so many former CEOs, and notice to his surprise that it is reading 273K.

[John Bailey]

Re: One of these days

And your list is in reverse chronological order I see.

[Anonymous Coward]

Re: One of these days

Exactly what I was thinking regarding supermarkets, passing the promotion cost onto the supplier is one of their fave tricks, and they tell you they are doing a promotion they don't ask. I've seen them even bill for the cost of advertising the promotion.

[JRW]

Re: Ugh. Copyright industries are troglodytes in the modern age.

Artists are paid for radio plays, not a lot per play, but they are paid.

[Turtle]

@ecarlseen

"...comparing the price of a stream to the price of buying a track is so idiotically dishonest as to make the entire piece suspect. Any value above $0 is better than they made for radio, which is the traditional model for comparison. "

The radio pays. While some small radio stations pay a blanket fee, most radio stations (and television stations too I believe) keep records of what they play and each artist gets paid accordingly.

Irrespective of what you think is the "traditional" comparison, the proper comparison is between streaming and owning - irrespective of whether you consider it to be "idiotically dishonest" or otherwise. Why? Because both streaming and owning allow you to listen to a track whenever you want, which is not possible with radio. The FCC also uses "interactivity" to decide what rates an entity pays for playing music.

[WorkingFromHome]

Re: @ecarlseen

@Turtle, Except that (as I'm sure a 100 people will shortly scream) owning means I can keep playing after that single purchase, streaming requires an ongoing subscription so isn't owning.

If we are going to compare streaming to owning then surely each track should only pay out once per subscriber - just as owning would. I stream a track, the artist gets paid and from then on subsequent plays pay nothing.

Personally I think the problem is that streaming is neither owning nor radio - it is its own beast and needs its own model. What that should be I don't know. All I do know is that it is (to me at least) worth more than nothing but less that the cost of the CD.

[Turtle]

Re: @ecarlseen

"owning means I can keep playing after that single purchase, streaming requires an ongoing subscription so isn't owning. If we are going to compare streaming to owning then surely each track should only pay out once per subscriber - just as owning would. I stream a track, the artist gets paid and from then on subsequent plays pay nothing."

Once again, the key difference between streaming and owning on the one hand, and the radio on the other, is the ability to hear a song whenever you want. All other differences are trivial.

If you want to listen once, buy the stream. If you want to listen to it repeatedly, then buy it outright as a download (or a physical product if available). Streaming and buying are two very different products in that respect. But either way, that specific track is there when you want it.

The radio is not like that at all. In fact, it couldn't be more different from either streaming or buying: the listener has no control over what the radio plays. There is one and only one reason why airplay and the radio in general were considered important by musicians and record companies: it was the best way to spark sales. I hope that I need not explain why, but I will anyway: someone might hear the track on the radio and decide that instead of waiting for the track to be played again, they would like to spend the money to buy the record to have the ability to hear the track whenever they want.

So we have three purchase options:

1) Pay-per-listen: buy a stream;

2) Listen-at-will: buy the download or physical product;

3) Listen-whenever-the-radio-plays-it-and-hope-that-you-are-fortunate-enough-to-be-listening-when-they-DO-play-it: Buy a radio, because once you've bought a radio, there's no additional cost.

I think that these three options cover all use cases.

[adnim]

"One of these days... I'm going to cut you into little miracles

"...An honest man finally, reaped what he had sown

And farmer in Ohio has just repaid a loan.

It's a miracle" - Roger Waters

[AbelSoul]

Re: "One of these days... I'm going to cut you into little miracles

"We cower in our shelters, with our hands over our ears

Lloyd Webber's awful stuff runs for years and years and years

An earthquake hits the theatre, but the operetta lingers

Then the piano lid comes down and breaks his f*cking fingers

It's a miracle"

[Anonymous Coward]

It's actually an experiment in metaphysics

Some believe that a "spirit" survives the death of the body and can interact with the living, others hold that spirits exist but pass immediately from this world, still others reject all "ghost in the machinery"... So here's Apple running a large public test of whether the notorious Jobs' "reality distortion field" still functions all these years after his death - because surely it would take him & his RDF in person to get this shit sandwich swallowed.

[nematoad]

Typical behaviour

"Indies confirmed to us that Apple would pay no royalties for the first three months..."

OK Apple who are the pirates now?

This is just another example of Apple's hubris and we all know what comes after that.

Nemesis.

It couldn't happen to a greedier bunch of shysters.

[Anonymous Coward]

I wonder if the major labels offered this to Apple?

They would never give up money unless they felt it was in their best interest. If they're on board with it, they probably wanted to do it knowing it would put more of a financial hurt on the indies, or cause them to opt out entirely, leaving the major labels with all the attention those first three months.

[Turtle]

Ethics

"No service has yet to cross the ethical line of demanding bands allow use of their catalogue for free."

But their failure to do so has nothing to do with ethics.

[Tromos]

Sauce for the goose

How would Apple react to people taking anything they fancy from their stores and shouting "It's OK, I've decided to give it a 3 month trial." on the way out? I reckon I can guess the answer.

[Youngone]

Retail Price

These arguments about royalty payments ultimately come down to "what the market will bear prices".

We already know that the distribution of music has radically changed, and there is no more artificial scarcity, fans are not as willing to shell out big money for hit records anymore, so the whole music industry has to change.

Huge multinationals whinging about falling revenues (while banking massive profits) don't help much either.

[danny_0x98]

Ladies and gentlemen, in the US, the major labels sign their new artists/bands on a work-for-hire basis. The copyright to the recording is entirely owned by the label. Some very successful folks may negotiate for their master recordings later in their career.

Or, they can stay independent and develop their career with less capitalization and retain more ownership of their works.

Apple, and all other streaming services, have to negotiate the rights with the recording's owner for streaming. (There's a loophole about pre-1973 recordings. I would guess that major labels insist on getting revenues for those recordings as part of the deal to get post-1973 recordings.)

So, no, no one has to go for three months free. But, no, it's not the band who, generally, has a say.

As a comment on reporting about Apple's WWDC music announcements, currently, with streaming, the people who do the best are the streamers and the record companies with deep catalogs. Apple is a retailer. They, the artists, independents, and the major labels—to the degree they want to develop new artists—want sales, not streams. But sales derive from listens for all but the top tier of musicians. A streamer who also sells should want to create new high value fans and should emphasize discovery and new artists.

Meanwhile, as a consequence of supply, demand, and that nothing need go out of print, listeners know that there's plenty of ubiquitous music available at no or minimal cost, and so the need to buy a track for playing at one's convenience is minimal. It takes new generations, new sounds, and new artists to reinvigorate music. At one time, it also took djs. Novelty is the only scarcity that remains for the music business. Apple is trying to set up their human-curated streaming and internet radio station to maximize, as much as possible, creating new fans and sales.

Here's the thing, Apple has to take a passenger seat because if it gets too aggressive in making music healthy, say, by promoting and signing artists on more favorable terms than the big label recording contracts, the labels pull their music out of the store and streams. And it's an open debate as to whether new generations bond as much with music as compared to the generations of the 19th and 20th centuries.