Pop star Taylor Swift dominated the headlines yesterday after publishing an open letter to Apple in which she wrote that it was “shocking, disappointing, and completely unlike this historically progressive and generous company” to not pay artists during Apple Music’s free trial. By the end of the day, the whole episode had an almost storybook perfect ending with Apple’s Eddy Cue announcing that the company decided it will compensate artists during the free period. Reactions today have been all over the place, but for Apple Music, the upcoming streaming music service, is the Taylor Swift episode a PR nightmare or a publicity dream?
The story with Apple Music’s free trial policy really started last Monday when Apple countered a report claiming it was compensating artists less for streaming music plays than its competitors like Spotify. A leaked document was misunderstood to say Apple was paying out 58% of revenue from its streaming business — well below the industry standard 70% — while Apple said it actually pays 71.5% in the US and an average of 73% around the world.
The major revelation in all of this was that Apple wouldn’t pay anything during Apple Music’s three month free trial. Apple’s 1.5% higher royalty was meant to justify the extended trial period without compensation while competitors offered shorter trials financed by advertising.
Getting the labels to agree to an unpaid three month free trial was said to be a point of contention during negotiations, with Apple using its higher royalty rate as leverage to sign deals. Apple eating the cost for giving away music to millions of users for 90 days is a major change in the overall pitch. I wonder if the Apple Music royalty rate would be different if Apple planned to finance the extended trial all along.
Taylor Swift wasn’t the first artist to publicly criticize Apple Music’s free trial policy.
Brian Jonestown Massacre frontman Anton Newcombe tweeted that “The biggest company on earth wants to use my work to make money for 3 months and pay me nothing” last Wednesday as the artist claimed Apple threatened to remove his music from iTunes if he didn’t agree to the Apple Music terms. Apple promptly denied those claims, of course, but it made no mention of changing its free trial royalty policy.
If Apple was going to give in to artists and reverse its royalty plan, a band called Brian Jonestown Massacre wasn’t going to be the leader of that effort, right?
Fast forward to early Sunday morning around 4 am in California. Taylor Swift publishes her open letter to Apple on Tumblr and tweets the post. In it, she says she’ll be holding her last album ‘1989’ from Apple Music because Apple isn’t paying artists during the trial period. Not too far off from what Newcombe said aside from his muddy claim of an Apple threat, but Swift obviously has much wider name recognition with more followers and an Apple-friendly image.
I missed almost all of the initial response as I was traveling and visiting family during the holiday like a lot of people, but my first thought was that Apple Music had just picked up a ton of free publicity despite it being mostly critical.
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By 11:30 pm Sunday night on the east coast, Apple had decided to change course and announced that it will pay artists for plays during the free trial period. Eddy Cue shared the news on Twitter, framing it as a response to Swift’s letter.
He told the AP in a late Sunday night interview that it was Swift’s letter that prompted the decision.
“When I woke up this morning and I saw Taylor’s note that she had written, it really solidified that we needed to make a change,” said Apple senior vice president Eddy Cue in an interview with The Associated Press.
Cue told Billboard that he personally called Swift during her tour in Europe to share the news after he and Tim Cook made the decision:
Once the decision was made by Cue and Apple CEO Tim Cook, Cue called Swift on the phone from her tour in Amsterdam. “I let her know that we heard her concerns and are making the changes. We have a long relationship with Taylor so I wanted her to hear directly from us.”
Today Taylor Swift’s Twitter timeline is stacked with a handful of retweets directing almost 60 million followers to the fact that Apple listened to artists. Genius.
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The response has of course been varied today, with Taylor Swift fans praising her for standing up to Apple and leading the music industry, and Apple fans admiring the company’s flexibility and commitment to artists. The big question now is whether or not ‘1989’ will be available on Apple Music when the subscription music service launches on June 30th.
I’m not 100% convinced that the whole Swift-Apple Music episode was entirely organic: she’s actively between shows in Europe, it’s Father’s Day in the United States, and as Seth questioned, does a move as big as financing the music industry for a quarter of the year first require board approval?
Regardless of how it all played out behind the scenes, Apple was quickly able to respond to a major negative story ahead of Apple Music’s launch — one that started when correcting another false negative claim — and use it to get everyone talking about Apple Music again before it kicks off. I’m calling this one a publicity dream.
When Apple first announced Apple Music at WWDC earlier this month, the initial reaction from the community was largely that the presentation was muddied and confusing: Cook used the coveted “one more thing” to introduce it, the keynote went on for too long, Jimmy Iovine missed the obvious Jobs iPhone introduction joke on stage, and Drake did anything but explain what he was said to be explaining.
Two weeks later, the conversation around Apple Music is still mostly about everything but the actual product, but a whole new set of potential customers are tuned in to the upcoming service — and that there will be a three month free trial in the first place — and that’s very good for Apple and Apple Music.
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