With word that Apple will now be issuing royalty payments to artists during Apple Music’s three-month trial period, we now know just how much money artists can look forward to. Suffice it to say, Apple won’t be breaking the bank keeping artists compensated.
The New York Times reports that Apple will be paying labels 0.2 cents for each song streamed, a rate that the Times notes is “roughly comparable to the free tiers from services like Spotify.” Framing the rate into more digestible terms, Apple will pay labels $1 for every 500 streams.
Notably, though, this doesn’t include payments Apple will have to dole out to music publishers, a negotiation process that the Times notes remains ongoing. Billboard, though, writes that when the dust settles, Apple will likely be paying publishers about $0.00047 per stream. Putting these two figures together, Apple will be out of pocket $2.47 for every thousand songs streamed on Apple Music during the service’s three-month trial period.
With the Apple Music payment controversy now behind us, thanks to Taylor Swift oddly enough, all eyes will soon begin to focus on the service itself. Set to launch on June 30, Apple has indicated that it eventually wants to get 100 million subscribers signed on at $10/month. If Apple proves successful in this regard, Apple Music would easily outpace Spotify which currently boasts over 20 million paying subscribers.
Apple certainly has lofty ambitions in this regard, but somewhat overlooked in all of this is Apple’s gargantuan bank account. With billions in the bank, Apple will be able to advertise its subscription based streaming service on a scale the likes of which the music industry hasn’t ever seen.
Speaking to this point, Sony Music CEO Doug Morris said the following just a few weeks ago:
What does Apple bring to this? Well, they’ve got $178 billion dollars in the bank. And they have 800 million credit cards in iTunes. Spotify has never really advertised because it’s never been profitable. My guess is that Apple will promote this like crazy and I think that will have a halo effect on the streaming business.
A rising tide will lift all boats. It’s the beginning of an amazing moment for our industry.
Thus far, Apple Music advertising efforts have been somewhat measured and limited to just three commercials. One commercial in particular, though, is worth highlighting if only because it’s damn cool.
Also, Apple on Tuesday rolled out a gigantic ad for its Beats 1 worldwide radio service in Times Square.
— Zane Lowe (@zanelowe) June 24, 2015