After a source shared the contract that Apple Music was offering independent record labels, we wrote about Apple's insistence that no money would be paid to rightsholders during the 90 day free trial of its new subscription music service launching on June 30th.
Apple's iTunes is among the top sources income for most labels; and 90 days without income while, as expected, millions shift from downloads to subscription streaming could cripple many independent labels.
U.S. indie music trade group A2IM cautioned its members to think twice before signing the current deal offered by Apple.
"...Independent rights holders will receive no compensation for their content during Apple Music’s 90-day free trial period. It is surprising that Apple feels the need to give a free trial as Apple is a well-known entity, not a new entrant into the marketplace. Since a sizable percentage of Apple’s most voracious music consumers are likely to initiate their free trails at launch, we are struggling to understand why rights holders would authorize their content on the service before October 1. This is especially true in light of the potential revenue damage to a music label’s iTunes download revenues and impact on their cash flow
We will keep everyone informed as new details emerge in the press. In the meantime, please do not feel rushed to sign Apple’s current offer. If you’d like to discuss generic deal structures, please feel free to reach out to us at A2IM.
A2IM understands that each music label must determine for themselves their own promotional and commerce plans and that we respect our member labels’ independent entrepreneurial spirit. We simply suggest to our members that before agreeing to any direct licenses, that they should please consider all factors and their effects on their music label’s results, now and in the future, and make an educated decision. In accordance with the entrepreneurial spirit of our members who run their businesses, each of our members should continue to do what is in their business’s best interests knowing, whatever decision or statements they make, that every A2IM label member will always continue to get full A2IM support and benefits."