About a week ago, the revenue sharing for Apple Music was revealed. According to the figures, Apple would be paying labels 71.5% of the revenue received from Apple Music which is higher than the industry standard which is currently at 70%. Sounds generous, don’t you think? However Taylor Swift’s open letter to Apple reveals that it’s really not, especially when you take into consideration the free three months included.
Assuming that this is the case at the moment where Apple will give listeners free three months without paying the labels anything, and combine that with the higher than normal revenue sharing, is it really worth it? As it turns out not so much. According to rough calculations by Michael DeGusta (via BGR), it would take labels a little over 8 years before the trial period is offset by the revenue they have made.
As it stands most streaming services such as Spotify offer a month’s trial, so with Apple Music offering three months it certainly seems like a generous offer on their part, although previous reports have claimed that indie labels believe that this would put them out of business, and based on this calculation it looks like they were right.
It should be noted that these calculations are just a rough calculation and it probably doesn’t factor other variables, like the costs to run the label, the contracts the label has with its artists, currency conversion, and so on. That being said, Apple has since made a u-turn on their decision and have agreed to pay royalties during that three month trial.
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