Hoping for a free Apple Music tier in light of Spotify’s recently-voiced concerns over people turning to music piracy should streaming giants raise their prices? It may come as no surprise to learn that Apple’s senior director of music publishing, Elena Segal, has confirmed that there will never be an Apple Music free tier.
As reported by 9to5Mac, Segal made the statement at the same British government hearing attended by Spotify, set up to discuss the remuneration of artists in music streaming and to investigate whether acts are paid too little. Paul Firth, director of International music at Amazon, and Horacio Gutierrez, head of global affairs and chief legal officer at Spotify, were also present, as well as representatives from the Musician’s Union.
Replying to the question of whether Apple might offer a free Music tier, Segal said “We don’t think that an ad-supported service can generate enough revenue to support a healthy overall ecosystem. And it would also really go against our fundamental values on privacy.” She also said that since the launch of iTunes in 2003 (or 2004 in the UK) Apple has competed with free services, and that “competing with free is always very difficult, because consumers have a choice to move to free”.
When questioned on whether paying artists slightly more per stream might affect Apple’s finances dramatically, Segal stated, “at Apple Music, frankly, we already pay more than other services and I think that’s been fairly well discussed in the past. It is a narrow margin business and yes, it wouldn’t take too much to upset the so-called Apple cart”.
Interestingly, Segal acknowledged that Apple Music absolutely can tell when you’re accessing a track via a playlist or when you’ve selected it specifically – so a user-centric payment policy is possible, in principle. That’s quite important, because much of this particular hearing focused on whether the current system of paying artists and composers was fair, and in particular whether the streaming music industry should switch to a new and different user-centric policy.
What’s the difference between a user-centric model and how artists are paid today? Essentially, in a user-centric model, the more the user (ie. the subscription-holder) listens to a certain bit of music, the more the rightsholder of it gets paid. So, if you only listen to Lewis Capaldi, his music secures all of the royalties generated by you.
In the current model, if Capaldi gets 1.5 per cent of streams in a certain period, his rightsholders get 1.5 per cent of the royalties pool, but – stay with us now – that actually means that 1.5 per cent of royalties generated by every individual subscriber are going to Capaldi’s music, even if the subscriber has never streamed one of his songs.
Segal confirmed that Apple was definitely open to a user-centric model – with the caveat that it would be very difficult to reach a unanimous agreement in order to make the shift.
“I think it’s certainly very interesting, and the key thing for us is there needs to be consensus among all licensors. It’s not a model you can apply to some licensors and not to others. Obviously the only way to reach consensus like that is to get together as an industry” she said.
As noted by Musically, the fact that Spotify, Apple and Amazon say they’re willing to explore user-centric is a step forward – but after the inquiry it still seems unclear whether this approach would actually be better for artists.
What we do know is that Apple Music won’t be rolling out a free tier to compete with Spotify. What we still don’t know, however, is whether the Cupertino giant will try out a premium tier to compete with those offered by Tidal and Deezer, among others. And let’s not forget, Spotify recently announced its new Spotify HiFi tier too…
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