Apple has confirmed rights owners will receive no compensation for plays until Apple Music users begin paying for the service.
Cupertino is offering a three-month free trial when the streaming service launches at the end of this month, but will not be paying royalties during this time.
The confirmation comes from Apple executive Robert Kondrk (via Recode) following the purported leak of an Apple Music contract last week.
According to the report, the absence of payouts was a ‘bone of contention’ with record labels, but Kondrk assures that Apple’s higher payouts (compared with rivals like Spotify) will eventually even the score.
The Apple exec said 71.5 per cent of the revenue gleaned from the $10/£10 a month service will go directly to music rights holders. Outside of the US, it will average about 73 per cent.
Apple reckons it’ll be able to bring in more revenue to the music industry as the lack of a free tier means it’ll be generating more income. As Recode puts it, it’s 70-odd per cent will be worth more to the labels than Spotify’s 70-od per cent.
Despite Spotify offering a free tier to users and a one month trial, a spokesperson for the firm said: “We pay royalties on every single listen, including trial offers and our mobile free custom radio service, and that adds up to approximately 70 percent of our total revenues, as it always has.”
Apple Music arrives on June 30 for iOS, with Android support to follow later this year. Will you be tempted to switch from Spotify? Share your thoughts below.