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Apple Music’s free trial royalties still up in the air

Apple Music’s free trial royalties still up in the air

June 23, 2015

Just when we thought Cupertino had skirted away from a public relations nightmare vis-a-vis Apple Music’s royalties during the free trial, we’re learning that the saga might not be over just yet. You see, Apple has not disclosed just how much it will pay artists in royalties during the free trial. As you may recall, Cupertino wasn’t going to pay any royalties at all during the free trial of Apple Music. A blog post from Taylor Swift caused the tech giant to change course, but just how much of a course correction is it?

According to a recent report from The Wall Street Journal, Apple has not yet disclosed how much it will pay artists during the trial period, but it has stated that “the rate will increase once customers start paying for subscriptions.” WSJ states, “Apple risks raising the ire of Ms. Swift and others if it comes in with what would appear to be a lowball offer.”

Personally, I think this is all much ado about nothing. It’s pretty much an industry standard to pay lower royalty rates during trial and other promotional periods. For example, competitor Spotify pays royalties of about one-fifth of its subscription service, which amounted to 0.14 of a cent per listen in the U.S. for December 2014. During the $0.99 per month promotional period, Spotify pays half of its normal subscription royalty rate.

If Apple matches those numbers, or even comes in a bit under them, I think the story will be over. It’s highly doubtful, however, that Apple would try to lowball the artists now, after Swift’s public letter of outrage against the tech giant. Let us not forget, too, that Apple is paying a higher overall royalty rate of 71.5 percent. The industry standard is only 70 percent. I think it is safe to assume that Cupertino will give artists a royalty rate during the free trial that is comparable to what Spotify pays for its ad-supported service.

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