Apple is paying indie labels $0.002 per stream for free trial… BEFORE tax

musicbusinessworldwide.com ^ | June 25, 2015 | Tim Ingham

[Mad Dawgg]

The likes of Merlin, AIM and IMPALA have endorsed the Cupertino giant’s new offer to the indies, after Eddy Cue did an about-turn and offered them royalty compensation for the platform’s upcoming three-month trial.

But the question on the lips of the industry is a familiar one… how much?

Reports suggest that the indies are receiving the equivalent of $0.002 per stream from Apple, and MBW’s sources corroborate this.

But there’s an important extra detail, numerous indies have told us: this is actually a pre-tax figure, certainly in Europe.

That means that in the UK, for instance, the $0.002 would see a further 20% knocked off in VAT – down to $0.0016.

And it will be even worse news in the likes of Ireland (24%), Norway/Sweden (25%), Spin (21%) and Italy (22%).

We know that Apple is paying 58% of Apple Music income to labels in the US – with 13.5% going to publishers – so some very rough maths would suggest that independent publishers would get somewhere around $0.00047 per stream for the three-month free trial.

[Swordmaker]

Look, Amazon on-Demand CD Service is NOT your Indy producing and then selling his self manufactured CD. It is Amazon burning his tracks in a one-off CD-R, printing a label on it, and mailing it to the customer who has somehow found it and wants it. . . for a fee to the Indy which is paid out of the sale price. . . As well as a yearly service fee paid by the Indy. That is NOT marketing the indy's music. You still have no clue about what marketing is. Amazon has no obligation to Market his music. None. The Indy is responsible for that. . . and I am not ignorant about it at all. You have some very odd ideas about how it works. . . and you think profit just falls off trees.

I think you'd make a good member of the current Supreme Court, with your flexible ideas of how contracts should be read.

[Mad Dawgg]

"Look, Amazon on-Demand CD Service is NOT your Indy producing and then selling his self manufactured CD. It is Amazon burning his tracks in a one-off CD-R, printing a label on it, and mailing it to the customer who has somehow found it and wants it. . . for a fee to the Indy which is paid out of the sale price. . . As well as a yearly service fee paid by the Indy. That is NOT marketing the indy's music. You still have no clue about what marketing is."

Oh see no that is exactly how easy it is to get your stuff on Amazon. You can also sell your Professionally manufactured Tunecore or CD Baby CDs on Amazon with a few clicks. Hell you can sell Posters and T-shirts etc. It is very easy. And Amazon is the largest online retail site in the world. Your claim that it is hard to get physical media into retail is laughable and shows just how clueless you are about the Indie Music Biz.

And yes Amazon will help you market your stuff in the same way they help Independent Authors with the tools they provide to market their stuff through Kindle with social media etc.

[Swordmaker]

Oh see no that is exactly how easy it is to get your stuff on Amazon. You can also sell your Professionally manufactured Tunecore or CD Baby CDs on Amazon with a few clicks. Hell you can sell Posters and T-shirts etc. It is very easy. And Amazon is the largest online retail site in the world. Your claim that it is hard to get physical media into retail is laughable and shows just how clueless you are about the Indie Music Biz.

Get your CDs into Walmart, Target, Rasputin, and other brick and mortar stores not online digital which have low returns and NO MARKETING except what you do for yourself. . . that's what i am talking about. For every runaway bestseller in the indies, there are a thousand who don't sell on Amazon. You don't realize that. You think that's "marketing" but it isn't. That's putting your car on a corner with a "For Sale" sign and waiting for someone to call you and ask about it. You just don't have a clue about what Marketing is all about. Not at all.

Go back and read what HamiltonJay posted to you above and learn something. . . then read what I have been posting to you about GAAP and learn more. You keep spouting ignorance and spouting and spouting and spouting. It's tiring.

Amazon's help is NOTHING. You said it yourself. The Indy has to do it himself.

[Mad Dawgg]

"Get your CDs into Walmart, Target, Rasputin, and other brick and mortar store"

Ahh why? With Amazon can reach far more people with far less money involved. You really are clueless about Indie music aren't you. An Indie group would need to lay out hundreds of thousands of dollars or more to put music inside all those brick and mortars and for what reason? That is why Indies sell CDs on Amazon. Or CD Baby etc.

They can do small runs and still make a chunk of change.

One of my friends in an Indie band does a hand written note to everyone who orders their CD online. How would he accomplish that with Wal-Mart or Target?

[Swordmaker]

One of my friends in an Indie band does a hand written note to everyone who orders their CD online. How would he accomplish that with Wal-Mart or Target?

Absolute proof you do not understand an iota of what HamiltonJay and I are talking about at all. . .

[Mad Dawgg]

Oh I am sure you have no clue whatsoever about what you are talking about.

You claim being on iRipoff will be a Godsend because of exposure.

Yet then you claim Being on Amazon will not help whatsoever. Its amazing how outright ignorant you are.

I work with people make very good money doing what you say can't be done.

[HamiltonJay]

artists aren’t screwed by Apple on sales they are screwed by their labels, and that’s been the case sinc day 1. Artists make their money by touring labels make the $$ on song/record sales. That’s been the industry my entire life.

The money the apple is making from the sale of songs is a replacement of the retail channel that no longer exists. They haven’t taken money from any artists via iTunes. The reality is that music, like all entertainment today, is mor fragmented than ever. There will never be another Beatles not because the Beatles were or were not great but because you will never have the consumer base so united to just a handful of genres or artists. That’s not Apple stealing money from artists that’s the natural fragmentation of the consumer base as more and more options became available.

When we were kids how could you have possibly been exposed to a foreign artist with no distribution deal in the states? Blind chance at best, today it’s an Internet search.

Or an indie band with no contract? Unless you were old enough to go to a show and they just happen to come to your town you likely would never hear of them. Today it’s nothing more than an upload of a file to iTunes and the entire world can find and buy your song if they like.

The entire model is different today, that’s not Apple screwing anyone.

As I’ve stated before we are saturated with entertainment content its value intrinsically is worth less today. $8 a month for thousands of on demand films and shows.. Tons of free to the viewer entertainment all over you tube free apps and games etc etc. 3 minutes of entertainment isn’t worth much today.. That’s not apples fault that’s the realities of the world we have more entertainment content than we can possibly consume so its value declines as a whole.

[Mad Dawgg]

"artists aren’t screwed by Apple on sales they are screwed by their labels...

So Apple Streaming will make MORE money for Artists than selling Digital Downloads?

Sorry but everyone in the industry sez otherwise. BTW Streaming ends up screwing the customer also because now you own absolutely nothing. It's bad enough that all that music on an iTune account is basically a temporary form of very limited ownership now with streaming the customer owns absolutely nothing.

[HamiltonJay]

Look, I’ve explained this to you as best I can, and you just refuse to accept reality.

The simple truth is the idea that 3 minutes of entertainment is worth lots of money is insane, in todays world its not worth much, it just isn’t if you think it is you are living in a dream world.

End of the day the artist created a piece of content, does it have value? Sure, but what is its value? Per listen? Not a whole lot. That piece of content sells for $1.29 for unlimited listening for infinity to anyone who actually wishes to buy it. Break that down by times its listened to and you aren’t making much money either. The only difference is the artist doesn’t see the breakdown of how many times the song is listened to by the owner.

I bought a copy of Glass Houses in 1980something, I paid maybe $10 or $15 for it. I guarantee I have listened to songs from it over the past 30 years tens of thousands of times... Now, do the math, $10 divided by 10,000 is .001 per song. That’s the reality.

If you need further proof of the value of entertainment in todays world, Go read this, and comprehend.

http://www.quora.com/Netflix-How-does-streaming-licensing-cost-work-Is-it-per-play-per-user-What-is-the-approximate-range-of-per-play-cost-in-dollars

A typical movie is 90 minutes long, and they are getting on average 10 cents per time its viewed, that boils down to .001 per minute, and reality is most movies aren’t even making that.

So that’s the value of entertainment, to think Apple is screwing the artists is nonsense. Its the reality of the world. The difference between an content maker (artist) and a delivery system like apple is, the content maker is 1 of thousands of people making content today... As such is has less value. Go out and look at any other art form... Yes, there may be a few very famous painters who can charge $10,000 or $100,000 per painting, but the vast majority make diddly.

Apple is doing a hell of a lot more work than that 5 or 10 member band, they are creating, maintaining and upkeeping all the infrastructure that gets the content to the user. Do you bitch that the Network makes more money than the actor? They do the same thing. Or that the cruise ship operator will make more money off the boat than the boat builder made in profit to build it? Its the same model, and the same reality.

The idea that artist are getting screwed by apple or other streamers is nonsense. For your argument to make sense would mean that Sony, Universal, et al, are some of the dumbest companies on the planet and are settling for lower profits than they could get.. because the deals are generally with them... Do you think BMI et al are saying hey, lets voluntarily give up profits? Do you really think they do that?

Reality is 3 minutes of entertainment isn’t worth dirt in the world today, people are so saturated with entertainment options that there is little value for 3 minutes of entertainment.... in large enough scale money can be made from it, but that’s about it.

[Mad Dawgg]

"The idea that artist are getting screwed by apple or other streamers is nonsense. For your argument to make sense would mean that Sony, Universal, et al, are some of the dumbest companies on the planet and are settling for lower profits than they could get...

And see there is where your whole argument falls apart, because you have little understanding of the Indie Music scene. Indies don't have deals with Sony etc. THEY (The Indies) MAKE THE MONEY so they don't need the big labels/publishers anymore. Broadcast Radio is dying Internet Radio is soaring and the problem for Big Media is they can't dominate the internet radio Market because anyone with enough start-up cash can create an Internet radio station So streaming is the attempt by Big Media to wrest control back and bring the indies under their thumb.

It used to be Big Media controlled the creation process because studios were so expensive to build and operate. Now a 1200 dollar lap top a few mics and a digital interface and free legal software and anyone can have a recording system the Beatles could only dream about when they recorded all that great music.

Then Big Media relied on distribution and manufacturing to control the market and along comes the internet and the digital revolution and anyone can create a professionally made CD and or Digital file that is as good and many times better than what the Big Media companies produce and sell it to anyone anywhere in the world with a website or an Amazon seller account..

Their final hold on the music industry was Broadcast radio but two things destroyed that, the personal mp3 player and youtube/internet radio.

Now their only hope to stop the flow of musicians shunning them and making the bucks themselves is to get choke hold on who hears the music. The payola scam is already starting with streamers wanting cash to place your music on the load screens and recommendations etc.

And they get control of that delivery system for pennies on the dollar over the cost of the old Broadcast radio delivery system.

See the screwing is coming at Indies from all directions because Big Media knows their business model is crumbling fast and they are clawing for control because they stand to lose Billions of dollars.

[UCANSEE2]

It will not go up. Apple has not done that with any of their services.

Apple may not have any choice.

Netflix hit with 'cloud tax' as Chicago targets online consumers

[TheBattman]

Keep in mind that this is streams during consumer’s “free trial” period - 3 months for FREE. So no real income for Apple during that time - so basically, Apple is paying artists out of NOTHING until actual paid subscriptions come in.

[TheBattman]

So - here we “sit” on a board that is supposedly about “freedom”, Capitalism, etc....

Yet someone is singing one of the favorite Liberal hits - “Take it From the Rich”...Nice.

[Mad Dawgg]

Take it from the rich?

Apple is paying squat to the people who actually make the music while pocketing millions for themselves and telling everyone how good they are to the artists...

Its they same old story the guys in suits trying to screw the artists. Only this time its Apple and we are supposed to be thankful when in fact all we have is the same circus, just different clowns.

[TheBattman]

The article was about payments during the “free trial” period. The original rumors were that Apple was going to pay nothing for streams during that time - which for obvious reasons didn’t fly with producers.

So Apple is going to pay, out of pocket, for all the music streamed and downloaded during the free trial period to producers. That makes them evil.

I guess I don’t follow the logic.

Ever thought about how the Netflix model works (it’s a bit similar to Apple Music and Amazon Prime video). For a set subscription price per month (or year), consumers stream unlimited movies or music. The “retailer” (i.e. - Apple or Amazon, or Netflix) get a set fee - then pay the producers from that fee a license fee per play/stream. Pandora works this way as well.

I think of how this works in the movie industry - Old-fashioned rental - anywhere from $1-4 per day rental. Netflix - stream (any time you want, unlimited) - you could, theoretically watch dozens of films a week... you pay no more, but Neflix still pays producers a set per-stream fee. They count on the consumers that are not going to stream dozens per week.

Now - lets look at Apple Music - every time a consumer streams a tune during their free trial - Apple collects $0, but will pay a very small fee to that producer/artist. That is every time it is streamed (my understanding - correct me if I’m wrong). After consumers start paying for the service (Apple is obviously banking on lots of them keeping the service past the free period). Now the model comes much closer to Netflix. Every stream produces a payout that comes from the monthly fee. Somebody also has to pay for the storage and massive amount of bandwidth. Somebody is going to be paying for marketing. Somebody is paying employees to not only develop the software and to constantly improve and upgrade it, but to help when things don’t go exactly right. And this is Capitalism, after all - so you must make a profit, otherwise it isn’t worth doing. And with Apple, they know how to turn a profit (though its been a hard lesson in years past).

Might want to check other similar services and see how much they are paying in license/royalty fees... I don’t think you will find Apple is so “out there” ripoff artists.

[Mad Dawgg]

"I guess I don’t follow the logic."

Yes definitely... You still don't get it.

See, Apple Spotify etc. take an artist's work, provide it to people via a an on demand streaming service, who pay Apple or Spotify for the service then Apple Spotify etc. turn around and pay not even pennies per play to the artist.

Now the service is set up to listen to what you want when you want just like owning a CD or Digital download.

Even Apple fanbois can figure out what that is going to do to CD/Digital Download sales where indies actually now make some good cash. (actually Spotify etc. has already affected sales)

So yeah Apple is screwing indie artists and big artists alike just like Spotify etc.