Beggars Group Issues Letter on Problematic Apple Music Business Model

BY Alex HudsonPublished Jun 17, 2015

Apple Music's plan to pay zero royalties during its three-month trial period has been a major concern to many folks in the industry. The Canadian Independent Music Association, for example, called the plan "shameful." Now, one of the indie world's most influential companies, Beggars Group, has spoken out to express its own concerns.

Beggars is a British umbrella company that includes labels like XL Recordings, 4AD, Rough Trade and Matador. They issued a letter to its artists and managers, and while it doesn't unequivocally condemn Apple, it does address the problems that have been on everyone's minds as of late.

The company begins the letter by stating that Apple has "been a wonderful partner for the last decade, and we confidently trust [that it] will continue to be so." Things turn negative from there, however; the folks at Beggars say that Apple Music "presents problems," and that "we struggle to see why rights owners and artists should bear this aspect of Apple's customer acquisition costs."

They add that the business plan is particularly unfair for artists releasing albums within the next three months. They also express concern about the social media-geared Artist Connect function.

All this being said, Beggars still doesn't actually have an agreement with Apple Music, so there's currently nothing in place to guarantee that it will be part of the worldwide rollout on June 30. This will likely change in the coming days, however.

Read the full letter below. Scroll past that to read some rather harsh recent tweets from Justin Vernon (Bon Iver) and Anton Newcombe (The Brian Jonestown Massacre) about Apple Music. According to Newcombe, any parties who don't participate in Apple royalty-free three months will be banned from iTunes.

To Beggars Group Labels Artists and Managers:

We thought it was time to update you on the situation with Apple Music, following speculation in the press, some of it ill-informed. Apple have been a wonderful partner for the last decade, and we confidently trust they will continue to be so. We have recently been in discussions with Apple Music about proposed terms for their new service. In many ways the deal structure is very progressive, but unfortunately it was created without reference to us, or as far as we know any independents, and as such unsurprisingly presents problems for us, and for our coming artist releases. We are naturally very concerned, especially for artists releasing new albums in the next three months, that all streaming on the new service will be unremunerated until the end of September. Whilst we understand the logic of their proposal and their aim to introduce a subscription-only service, we struggle to see why rights owners and artists should bear this aspect of Apple's customer acquisition costs.

And given the natural response of competing digital services to offer comparable terms, we fear that the free trial aspect, far from moving the industry away from freemium services – a model we support – is only resulting in taking the "mium" out of freemium. We are also naturally concerned, as ever, as to whether we and you are being treated on a level playing field vis a vis the major labels and their artists. Additionally, we have reservations about both commercial and practical aspects of the Artist Connect area. It is a mistake to treat these rights as royalty free, especially in the light of recent licenses with services like Soundcloud.

At the moment we do not have an agreement with Apple Music that would allow us to participate in the new service. However, we very much hope that the obstacles to agreement can be removed, for us and for independent Merlin-member labels as a whole, and that we will be able to fully support this potentially exciting new service in the coming days.
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