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Reports: Apple Music won’t pay royalties to bands and labels during their three month free trials

If you’re a fan of contracts, spreadsheets and bottom lines, you may already be aware of certain ‘issues’ with Apple’s new Apple Music service, set to launch later this month.

Though priced at $9.99 a month, or $14.99 for a family account, Apple Music will also come with a three month free trial. Hurrah, more beer money, right? Well. Yeah. But also, maybe not that great for your favourite bands and their labels – especially the indies.

As reported by Music Business Worldwide here, there’s a major bump in the road. As one source told them after seeing the licensing agreement for labels to sign up their catalogue to the service: “No indie worth their salt will sign this”.

The reason? During that three month free trial, Apple won’t pay any royalty payments to the labels. That free trial isn’t so much Apple doing you a solid, but the bands and labels not being paid. For three months.

“We’re used to helping with free trials when streaming services are not established,” one independent label exec told Music Business Worldwide. “But this is Apple, with hundreds of millions of customer credit card details. Offering no compensation at all to labels for a trial that will help Apple sell its devices is hugely disappointing.”

In effect, in July, August and September, if you stream your favourite bands through Apple Music, it seems they won’t get any cash. In fact, as you won’t be using, say, Spotify – it may actually cost them money they’d get from elsewhere.

There are worries that, alongside the trial, the new service will dissuade the downloading of full tracks from iTunes – for which labels get 70% of revenues, possibly further hitting the bottom line. Once the free trial is over, they’ll get 58% of money from the streaming service. When you take publishing cuts and various other things into account, insiders say that’s roughly the same as Spotify’s premium tier.

As yet, it’s not completely clear if the three free months will apply to all users from sign up date, or be a fixed period. Whether the news will dissuade artists from releasing new music during that three month period remains to be seen.

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