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OMG, Taylor Swift and Eddy Cue are totes BFFs. You see, Apple was being mean and saying they wouldn’t pay artists for streams during the three-month-long free trials of its new streaming service, Apple Music Apple Unveils Apple Music at WWDC, U.S. Army Website Hacked, & More... [Tech News Digest] Apple Unveils Apple Music at WWDC, U.S. Army Website Hacked, & More... [Tech News Digest] Apple Music arrives at last, the United States Army gets hacked, Uwe Boll's Kickstarter rage, Pizza Hut Blockbuster Box movies, and Grand Theft Auto V in real life. Read More . However, TayTay took to Tumblr and wrote a letter saying how naughty the company was being, so Eddy (senior vice president of Internet Software and Services) called her and they sorted the whole thing out. Now Apple are going to pay artists during the free trial. Hooray!

Or at least, that’s what my entire Twitter feed has been saying for the last 24 hours. Like everything though, there’s a lot more to this story than first meets the eye. Taylor Swift isn’t quite as wonderful as she appears and Apple’s U-turn merely masks some much deeper problems with the music industry’s relationship with streaming services.

Bully Bully Taylor Swift

Let’s get one thing straight, Taylor Swift is not a defender of the little guys, as much as she likes to portray herself as one. To quote:

This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success.

Swift is one of the few throwbacks to an earlier age when musicians were superstars shifting millions of albums. There is now far more competition, both in the number of artists releasing music, and in how people are listening to it.

Clinging desperately to the collapsing status quo benefits the record companies and the biggest artists, but not the little guys. Tidal, which Swift has championed, is basically just a bunch of rich musicians throwing a hissy fit Why Jay Z's Tidal Music Streaming Service is Doomed to Fail Why Jay Z's Tidal Music Streaming Service is Doomed to Fail Jay Z recently relaunched Tidal, the music streaming service he acquired for $56 million. Tidal has 99 problems, and the pitch is one. Read More because they’re not being paid enough. It’s not a service designed to benefit indie artists.

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A lot has also been written about the hypocrisy of Swift’s position, given the contracts she makes photographers sign before shooting her gigs. Photographers are required to grant her the right to use their images for free in perpetuity while being blocked from using them themselves.

Jason Sheldon, who initially raised the issue, makes some great points, although I actually don’t think they’re all that relevant. Jared Polin, in an extremely NSFW rant about concert photography, suggests that the contract is probably created by Swift’s management team and that she’d know nothing about it. It’s also, much to his ire, a fairly standard industry contract.

How Taylor Swift Could Actually Help

If Swift seriously wanted to help out smaller artists, a much better step would be to work to change the ridiculous recording deals they’re made to sign.

While Spotify pays out 70 percent of the money it earns to rights holders — and Apple Music will pay slightly more — record companies pass only a fraction of it on to the artists. A post on Techdirt breaks down some of the sneaky tricks used by record companies to, in essence, screw artists out of money.

For example, many artists’ contracts include breakage fees of 20 percent which come from their share of the money. This is a holdover from the days of vinyl where records would frequently be damaged in transit (just another reason vinyl sucks Forget Vinyl: 4 Reasons Digital Is Superior Forget Vinyl: 4 Reasons Digital Is Superior Vinyl is overrated. Fact. Digital is clearly superior for many reasons, some of which we lay out below for your reading pleasure. Feel free to disagree, even if doing so makes you a massive hipster. Read More ). As Techdirt points out, “CDs don’t break so much and … digital files don’t break at all”. Keeping this clause in contracts is a pure money grab.

Another similar throwback are container charges, which work out as another 30 percent deduction from revenues. These charges, which go towards “things like the jewel cases and inserts for CDs,” are clearly ridiculous in an age where so much music is bought digitally.

If an artist has more than $20 million in sales and fails to earn out their 10 percent advance of $1 million, they’re working with a severely broken system. If Swift really wants to help artists, using her privileged position to get record companies to create more favorable and relevant contracts would be a great first step. Sorting record deals would also stop situations where 34 million streams earn an artist a measly £1700.

The Music Industry Needs to Adapt

Let’s get serious here for a moment. Who benefits most from music streaming services?

It’s not the companies operating them; Spotify lost more than €20 million ($22 million) last year. It lost so much because 70 percent of its revenue goes directly to rights holders. While Apple is arguably in a better position to strike deals with record companies and has the capital to eat such losses for the indefinite future, it’s unlikely that Apple Music will ever bring them in serious revenue.

It’s the music industry which really stands to benefit most from streaming services.

As I broke down last year, when I argued that Taylor Swift is wrong about Spotify Why Taylor Swift Is Wrong About Spotify Why Taylor Swift Is Wrong About Spotify In the past week Taylor Swift has pulled her music from Spotify, inspired countless song-pun laden headlines and reignited the debate about streaming music services. Read More , streaming music is a huge opportunity for artists. Under the old, “sell CD, get money” model, artists made a dollar or two for each album they sold. With streaming services, the amount they can earn from each fan is unlimited.

I, like many others, listen to my favorite artists again and again. When I use Spotify, they keep getting paid, and will do so forever. Yes, they’d make more money today if I bought a CD, but over the next 10 years? The next 50? Long tail profits are a huge opportunity that the music industry is ignoring.

My feelings are entirely mixed on Apple’s U-turn. While artists, and other rights holders, do deserve to be paid for their music, they are the ones who stand to benefit most from the success of Apple Music. They need to start viewing their deal with Apple as a partnership rather than a service they are providing to Apple. A three-month trial period during which no one makes money, followed by getting more than 70 percent of the service’s revenue, is a more-than-fair partnership.

If the music industry continues to see its relationship with streaming services as adversarial then things will end badly. If Spotify, Apple Music and the like don’t succeed, people will not return to buying tracks from iTunes iTunes Sales Are Declining – Is This the End of Paid Music Downloads? iTunes Sales Are Declining – Is This the End of Paid Music Downloads? Spotify is replacing iTunes for many users – will that tend continue? Read More . They certainly won’t return to the glory days of expensive physical albums. Instead piracy will flourish once again.

Apple Music is an olive branch: a streaming service from the world’s largest company that promises to be 100 percent paid thanks to Apple’s dislike of free music The End of Free Music: Should Spotify Make Everyone Pay? The End of Free Music: Should Spotify Make Everyone Pay? Apple is trying for another revolution with the rumored launch of Apple Music, a music streaming service. But along the way, Apple might be trying to kill existing free music streaming services. Boo! Hiss! Read More . The music industry seems determined to burn that olive branch. The old days are over The End of Ownership: Netflix, Spotify, and The Streaming Generation The End of Ownership: Netflix, Spotify, and The Streaming Generation Read More and this industry need to adapt or die.

To Taylor, Love Harry

Taylor Swift should focus less on securing three months worth of payments, and more on helping Apple, Spotify, and the other streaming services succeed over the longterm. Given her enviable position of power, she could also help ensure record companies give artists a better deal from day one. Choose your battles wisely, Taylor, because artists need a new champion.

As ever, we want to know what you think. Was TayTay right to throw her toys out of the pram over Apple Music? Was Apple merely ensuring Apple Music got a foothold in this sector? Should record companies be forced to change their way of doing business to better reflect the new music industry? Please let us know your thoughts in the comments section below.

  1. Francisco
    September 24, 2016 at 4:33 pm

    Dear Mr. Guinness,
    The title of your "article" is misleading and your arguments lack a solid base where to build your tirade against Taylor Swift. Either the title was a cheap marketing trick to get people's attention or because you were reaching your deadline and needed to whip something fast, what you're discussing in your article have nothing to do with her and more about the music industry per se.

    Now, let's start with the premise: Taylor Swift is wrong about Apple Music.
    Is she responsible for other artists to get paid or not? NO.
    Is her responsability to look out for indie musicians to get paid in iTunes and other providers? NO, yet she got involved.
    Is her responsability to negotiate how much an artist get paid for songs downloads? NO.
    Does her paying or not photographers or negotiate unfair deals with her vendors, have ANYTHING to do with how OTHER artists get paid in music streaming services? NO.
    Does she have anything to do with how the music industry have evolved and degrade over the last decades? NO.
    Does the content of you "article" have a direct correlation with Taylor Swift? NO.
    The only thing that you could link her to your points would be Taylor Swift moral responsability. Yet, if that's you're grabing yourself from, you have no case either because she have NO OBLIGATION to intercede for other artists rights. Yet, since you have so many artists that you listen to in a regular, why don't YOU expect from them to take the moral responsability of helping indie artists?

  2. Rob Nightingale
    July 4, 2015 at 9:40 am

    Harry, this post was awesome, and in my view, completely correct. The strangling hold that record companies have over artists is nothing short of an industry that's crying out to be revolutionized. Spotify did indeed revolutionize some aspects of this business, but the trickle down effect that the artists initially hoped for never happened (it rarely does).

    My question would be, are we going to be having the exact same conversations and arguments when the Spotify-For-Books eventually comes along? We'll all be quick to blame the streaming service, but fail to recognize the malevolent Wizard of Oz behind the curtain, keeping all of the cookies for himself.

  3. L3 CM
    June 26, 2015 at 8:08 pm

    1) Apple Music isn't about artists. It's about Apple. So stop pitting Taylor vs. Apple. Either Taylor is right, or they are both wrong. I disagree that artists and the industry should 'jump on board' with streaming now and accept terms from Apple if they aren't fair for all involved.

    2) In the long term, artists potential earnings are unlimited - this is true. Unfortunately, it would also take unlimited TIME for the artist to make anything with the current process. It would take 3 lifetimes of streaming to see fair compensation for single successful song.

    3) Spotify launched 7 years ago. So where's the evidence? Where are the success stories? As an artist, the math dictates that it's still smarter to take the money now (new album sales) rather than stream a new album.

    4) My opinions aren't slanted in favor of killing streaming...my own music is available to stream on Spotify and beyond. It's the future METHOD. But the business model certainly needs some work.

  4. Menatoorus Meer
    June 26, 2015 at 3:14 am

    Working for 90 days for free without even having my concent or opnion about it ?
    I guess most of us are willing to do so for a lot of reasons.
    Charity and other noble humane causes ?
    May be.
    But we are analyzing a Giant Corporate versus talented people issue, not the Red Cross versus some healthcare personnel.
    case.
    Apple was reasonable enough to make the call.

  5. Les Rawson
    June 24, 2015 at 7:48 am

    Err! Apple have been stripping the linings from the wallets and purses of the world for years and to even consider they are the victims in this situation is abominable. Without Taylor Swift and hundreds of entertainers Apple would be making computers......If you have the talent then the rewards are yours not a the biggest company in the world

  6. Austin Wilkins
    June 23, 2015 at 11:00 pm

    Here here.

  7. Howard A Pearce @HAPLibertarian
    June 23, 2015 at 5:41 pm

    Forced to change their ways as in coerce by passing a law ? :D

    I realize coercion is popular with many people particularly if done by the state through legalization, but I have to say I oppose coercion ... even when done by the state and made legal.

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