Millions Likely To Sign Up For Apple Music’s Free 3 Month Trial; Leaked Contracts Show Artists, Labels To Be Paid Nothing

[UPDATED] When it launches on June 30th, Apple Music will offer a 3 free month trial; and Apple contracts leaked to Hypebot show artists and labels won't receive any compensation for the music consumed during those trials.

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During Apple Music's launch announcement, presenters touted a generous three month free trial period for its new streaming music service. But when it launches on June 30th, artists, labels and other rights holders will not receive any compensation for the billions of songs streamed by the millions likely to take advantage of Apple's three free months.

A clause in the Apple Music contract shared with Hypebot states that no royalties will be paid during the trial.

"Fees for Trials and Comp Accounts. For the sake of clarity, for Trial Users, and for Comp Accounts that ITUNES provides on a gratis basis, no license or royalty fees, including Fees, will be due to COMPANY."

["Comp Accounts" refers to free accounts for media and some in the music industry.]

Spotify says it needs its free tier to attract new users, some of whom convert to paid; and new numbers that show it has more than 20 million paid subscribers adds weight to their argument.

CEO Daniel Ek recently shared that 67% of free users that convert to paid decided within the first three months.

But Spotify and other music streamers that offer free streaming tiers compensate rights holders based on a portion of advertising revenue.

As one music industry insider familiar with the Apple Music contract told Hypebot, "Any way you slice it – no food on my plate!"

Bruce Houghton on 06/10/2015 in Music Business | Permalink | Comments (2)

Tags: Anti-competitive practices, Apple Inc., Believe Digital, Berklee College of Music, Billboard Magazine, Canada, Contract, music industry, Spotify, Streaming media

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2 Comments

So how do we setup an petition to fight this?until indies make a stand,or musicians in general shit like this is going to keep happening,and i tell ya……im tired of using lube.
These companys will keep bypassing royalties to artists until we make a stand……..

§ 1006. Entitlement to royalty payments4
(a) Interested Copyright Parties. — The royalty payments deposited pursuant to section 1005 shall, in accordance with the procedures specified in section 1007, be distributed to any interested copyright party —
(1) whose musical work or sound recording has been —
(A) embodied in a digital musical recording or an analog musical recording lawfully made under this title that has been distributed, and
(B) distributed in the form of digital musical recordings or analog musical recordings or disseminated to the public in transmissions, during the period to which such payments pertain; and
(2) who has filed a claim under section 1007.
(b) Allocation of Royalty Payments to Groups. — The royalty payments shall be divided into 2 funds as follows:
(1) The sound recordings fund. — 66⅔ percent of the royalty payments shall be allocated to the Sound Recordings Fund. 2⅝ percent of the royalty payments allocated to the Sound Recordings Fund shall be placed in an escrow account managed by an independent administrator jointly appointed by the interested copyright parties described in section 1001(7)(A) and the American Federation of Musicians (or any successor entity) to be distributed to non-featured musicians (whether or not members of the American Federation of Musicians or any successor entity) who have performed on sound recordings distributed in the United States. 1⅜ percent of the royalty payments allocated to the Sound Recordings Fund shall be placed in an escrow account managed by an independent administrator jointly appointed by the interested copyright parties described in section 1001(7)(A) and the American Federation of Television and Radio Artists (or any successor entity) to be distributed to nonfeatured vocalists (whether or not members of the American Federation of Television and Radio Artists or any successor entity) who have performed on sound recordings distributed in the United States. 40 percent of the remaining royalty payments in the Sound Recordings Fund shall be distributed to the interested copyright parties described in section 1001(7)(C), and 60 percent of such remaining royalty payments shall be distributed to the interested copyright parties described in section 1001(7)(A).
(2) The Musical Works Fund. —
(A) 33⅓ percent of the royalty payments shall be allocated to the Musical Works Fund for distribution to interested copyright parties described in section 1001(7)(B).
(B)(i) Music publishers shall be entitled to 50 percent of the royalty payments allocated to the Musical Works Fund.
(ii) Writers shall be entitled to the other 50 percent of the royalty payments allocated to the Musical Works Fund.
(c) Allocation of Royalty Payments Within Groups. — If all interested copyright parties within a group specified in subsection (b) do not agree on a voluntary proposal for the distribution of the royalty payments within each group, the Copyright Royalty Judges shall, pursuant to the procedures specified under section 1007(c), allocate royalty payments under this section based on the extent to which, during the relevant period —
(1) for the Sound Recordings Fund, each sound recording was distributed in the form of digital musical recordings or analog musical recordings; and
(2) for the Musical Works Fund, each musical work was distributed in the form of digital musical recordings or analog musical recordings or disseminated to the public in transmissions.
now doesn’t the above section state that their are laws in place against stuff like this?or did i read that wrong?

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