Apple Music backing Independent Labels into a Corner

Apple Music backing Independent Labels into a Corner

Apple Music doesn’t arrive until June 30, but there are already some serious issues bubbling up for independent labels. They’re concerned that Apple’s three month free trial plans will deprive them of much needed revenue.

independent labels

 

Andy Heath, chairman of UK Music, the industry lobbying group, claims that no British indie labels have agreed to Apple’s term because they “will literally put people out of business.”

Ahead of the launch of what will probably one of the biggest music streaming services, Apple music is ruffling a lot of feathers within the indie music community.

The main reson for this is that Apple continues to stick to its guns in wanting the smaller independent labels to forgo rights to any revenue revenue during the free trial period.

Several sources have reported that Apple execs continue to refuse to negotiate on this key point as they prepare to launch the service June 30th. “For the biggest music retailer in the country, iTunes has been a pretty good partner to indie labels,” says a rep from an indie label. “The biggest bummer is that this just throws that goodwill out the door.”
Another  unnamed record label executive told trade site Music Business Worldwide (MBW) that while labels have helped with free trials “when streaming services are not established…this is Apple with hundreds of millions of customer credit card details.”

The same site reports that Apple is attempting to strike deals with labels individually to get around the issue. If it fails there could be some significant gaps in the repertoire available on Apple Music’s catalog.

While the term “indie” can conjure up images of three people in a small office trying to shift boxes and boxes of unsold vinyl, the reality is that independent labels are home to some major acts.

Consider XL Recordings (home to The XX and Adele) or Domino (with a roster including Arctic Monkeys and Franz Ferdinand). If they don’t sign up, Apple Music will definitely be facing a big problem.

The CEO of the Association of Independent Music (AIM) in the UK, has sent a memo to all of its members raising concerns about the deal.

Alison Wenham says:

“However, the speed at which Apple has introduced their plans and its lack of consultation with the independent music sector over deal terms (despite what Jimmy Iovine might claim) has left us with the uneasy feeling that independents are being railroaded into an agreement that could have serious short-term consequences for our members’ interests.”

While many of the labels involved work with other streaming services like Spotify, it’s clear why Apple Music is more of a concern to them as of course iTunes has remained a source of revenue independent labels and the new service will sit beside it. The free trial could mean three months taking a massive hit on new releases.

A lot can happen in two weeks but right now Apple seems to have a serious revolt on its hands. Then again, it certainly has the cash reserves to solve it.

But others predict Apple Music will launch with key missing artists, at least until the service first begins charging users after the trial period in the fall. “People would have been open for, certainly, a 30-day trial — it’s very common industry standard — and pretty reduced rates for the other two months,” says one of the independent labels sources. “I just think the way they’re going about it — three months of not getting paid anything — is kind of ridiculous.”

Share your thoughts