Days after Apple executives announced their splashy new music-streaming service last week before a roaring crowd of developers in San Francisco, they presented 250-page licensing contracts to skeptical independent record labels. Indie sources say the tech giant does not intend to pay them royalties for Apple Music's free, heavily marketed, three-month trial period — and many are refusing to sign. "I hesitate to say 'everyone,' but a lot of independent labels are of the same mind — that it's kind of a raw deal," a source at a top indie label tells Rolling Stone. "There definitely seems to be a coalescing of opinions to opt out."
Several sources have told Rolling Stone that Apple execs have refused 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 another label source. "The biggest bummer is that [this] just throws that goodwill out the door." Digital Music News first reported that some major labels will be opting out of Apple's service until they are happier with the company's terms.
Reps for the American Association for Independent Music, which represents most of the top indies, declined to comment, but last week, the association posted a highly skeptical comment about Apple's proposed contract: "Since a sizable percentage of Apple's most voracious music consumers are likely to initiate their free trials at launch, we are struggling to understand why rights holders would authorize their content on the service before October 1st," the association wrote. "Please do not feel rushed to sign Apple’s current offer."
After announcing Apple Music, which includes Spotify-style streaming for $10 per month (after the free trial period), a radio station with experienced DJs and other services alongside the iTunes store, Apple music exec Eddy Cue told Rolling Stone the company had signed licensing deals with all three major record labels and "a few" of the top indies.
"Now that we're live and we're going around talking about it, we'll go after everybody around the world," he told Rolling Stone. "This is something we've done many times. Even in the original iTunes Music Store, we never did a deal with the indies — we actually launched with the [major] labels... We’ve got the next three weeks to complete this and get those done."
Apple declined to comment further for this story.
Some executives at influential indies say they're not worried, though. "Hopefully, this will come in and change everything. Hopefully, they'll throw us a bone or something for doing it," says Matthew Johnson, founder of Fat Possum, the Oxford, Mississippi, label that puts out music by Smith Westerns, Spiritualized and others. "Somebody's got to figure out the streaming model and Apple's got a really great shot at 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 indie-label sources. "I just think the way they're going about it — three months [of] not getting paid anything — is kind of ridiculous."