Apple to pay $0.002 per stream during free trial
Just one day following Apple’s ‘swift’ decision to pay independent artists for royalties earned during the free, three-month trial period of its streaming service, its per stream rate has been revealed.
Digital Music News reports Apple will pay rights holders $0.002 per stream during the trial, a surprisingly low rate considering rates paid by its competitors.
According to Spotify’s dedicated site to clarify its royalty rate to artists, Spotify Artists, the streaming giant pays between$0.006 and $0.0084 per single song stream to rights holders. Exactly how much of that money goes directly to the artist varies, depending on the act’s agreement with its label, its publisher and any contributing songwriters.
Rdio is basically on par with Spotify paying $0.00692per stream, but internet radio giant Pandora, which crucially doesn’t have a premium paid tier, pays less than $0.0014 for each play of their tracks – around 80% less than Spotify’s rate.
The Jay Z-owned newcomer Tidal is currently leading the pack; with its premium-only model, it pays an average royalty per stream of $0.024-0.028, that’s according to a‘leaked’statement published in March.
Apple Music’s trial period rate was revealed to Digital Music News via independent labels, who said they were emailed by the tech giant regarding the update. TMNhas reached out to a handful of local independent labels, one label said it hadnot been contacted by Apple Music regarding the royalty rate.
It’s unclear whether the rate will be applied for the three-month trial period only, or offered to all indies in their full contracts with Apple Music. However a report by the Wall Street Journal suggests the former will be the case – “[Apple Music] said the rate will increase once customers start paying for subscriptions.” Backing this further, Apple revealed earlier this month that it will pay US rightsholders 71.5% of its subscription service, while countries outside the US will pay an average of 73%.
The negotiations and pandering to big-name artists, however justified, could chip away at Apple’s incremental revenue growth. According to USA Today, Wall Street analysts expect Apple's annual revenue growth to plunge from 27% for the fiscal year ending in September to just 6% for fiscal 2016.
As Apple Music’s rivals are multiplying so are its naysayers; in an interview with CNBC following Apple’s backdown for indie artists, Smashing Pumpkins frontman Billy Corgan said Apple may have ignited a “bloody turf war” between artists and streaming services.
“I applaud [Taylor Swift] for taking a stand, but this is going to be played out by the media as ‘Taylor versus Apple,’ and that’s not the real story. The real story is the 10,000 other artists that Apple doesn’t pay attention to past their top 12.
“Once artists understand the power they have in this marketplace, all heck’s going to break loose," Corgan continued."This is a big admission on Apple’s part that they’re afraid of the negative tide that could be beginning, so they want to nip it in the bud.
“We’re not being paid commensurate to our value to Apple, Spotify or to anybody. Once the artists wake up, there’s going to be a bloody turf war, and this is a very big sign of what I’ve been predicting.”
Meanwhile, Tuesday trading in the US showed Apple's stock price sat about where it was three months ago, suggesting many on Wall Street are inching away from Apple and leaning toward other Nasdaq stocks.