Indie labels reluctant to sign Apple Music deals

Last week, a leaked contract revealed how much rights holders would receive from Apple Music in royalty payments.

A standard rate of 58% of revenue was matched with the more controversial news that no royalty payments would be issued through the first three months of Apple Music’s free trial option.

It’s since emerged that Merlin - the body representing some of the world’s foremost independent labels, including XL and Domino - has serious concerns over the lack of cash flow.

An independent label executive told Music Business Worldwide: “We’re used to helping with free trials when streaming services are not established. 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.”

They added: “Not being paid by Apple Music for three months is bad enough; it’s going to really hurt cash flow for independent labels and punch a black hole into music industry income this year. But Apple Music will also hurt other revenues that we could have otherwise relied on. For example, we expect iTunes to interrupt people downloading tracks – encouraging them to join this great new streaming service. That’s deliberately cannibalising sales. And if we’re all scared of not making money during Apple Music’s free three months, then nothing will be released and physical sales will tumble.”