Apple Music royalty rate during free trial on par with Spotify’s 35% deal, at 0.2 cents per play

A report that Apple would pay music labels a reduced royalty rate during the three-month free trial of Apple Music has been confirmed by labels who spoke to the NY Times. Apple had originally planned to pay them nothing before an open letter from Taylor Swift and complaints from others led to a swift change of plan.

For each song that is streamed free, Apple will pay 0.2 cent for the use of recordings, a rate that music executives said was roughly comparable to the free tiers from services like Spotify. This rate does not include a smaller payment for songwriting rights that goes to music publishers.

Spotify bases its royalty payment for free users on a 35% share, half of the 70% it pays for tracks streamed by paid subscribers … 

Although some had initially assumed that Eddy Cue’s tweets meant that Apple would be paying the full royalty (either estimated or back-calculated) during the trial, acceptance of the terms by industry groups representing more than 20,000 indie artists suggests that labels are happy with the deal.

Apple yesterday promoted the Beats 1 radio station that will form part of the Apple Music service with a massive ad in New York City’s famous Times Square.