Apple is set to debut its music streaming service Apple Music worldwide on June 30 in over 100 countries, starting with a three-month free trial for everyone, after which it will charge $10 per month for a single membership and $15 for a family account. However, a report by The Telegraph is claiming that Britain’s independent record labels believe Apple Music’s free trial could force them out of business, leaving them “completely screwed” and struggling to survive.
The Cupertino giant wants record labels such as XL Recordings, the home of Adele, and Domino, the label behind the Arctic Monkeys, to agree to a free three-month trial of Apple Music, during which they will receive no payment. But Andy Heath, the chairman of UK Music, has revealed that this has caused dismay among British labels, adding that no British independent labels have agreed to Apple’s terms. As a result, Apple’s music streaming service could debut with large gaps in its catalogue, missing albums like Adele’s 21, the biggest selling album of the decade.
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. They are basically putting all the risk on the labels. People will say ‘oh but you’re on Spotify’. Well yes, but we get paid for that. Apple is sitting there with this massive pile of cash and saying to us, ‘you help us start a new business’. Well I just don’t think it is going to happen on these terms.”
On the other hand, Spotify pays royalties for every song listened to via its mobile app, albeit fractions of a penny per track. Meanwhile, Apple has reassured labels that once the free trial is over, it will pay better than standard streaming royalties of over 70% of the monthly subscription charge.