Apple Music to Not Pay Out Royalties During Free Trial Period, Leaked Contract Reveals

Apple Music to Not Pay Out Royalties During Free Trial Period, Leaked Contract Reveals
Though music listeners may be excited to try out Apple Music when it launches later this month, a leaked document outlining royalty payments through the service may have artists a little less enthused. If the contract is to be believed, rights holders will be netting zero percent in royalties throughout Apple Music's three-month free trial period. And when artists even do eventually get royalties, they will be significantly less than from other competing streaming services.

As previously reported, Apple Music launches through Apple devices on June 30 in more than 100 countries, with PCs and Android phones hopping aboard later in the fall. Users will be treated with a three-month, all-access pass before being offered a paid subscription.

A leaked document obtained by Digital Music News outlines that rights holders will not be paid out during this time. It's explained, "For Trial Users, and for Comp Accounts that iTunes provides on a gratis basis, no license or royalty fees, including Fees, will be due to Company."

Though this has not been confirmed by Apple, the payout plan, or lack thereof, has serious marketing-related implications on any music being released this summer. Theoretically, any album or single issued between June 30 and September 30 would get its most attention during its initial release. If true, the Apple Music business model suggests that artists would not be compensated during the prime promo time for their product.

Making matters worse, following the free trial period, Apple will reportedly pay only 58 percent of subscription revenue to rights holders. Rival Spotify currently pays out at 70 percent.

Subscriptions to Apple Music will cost $9.99 USD per month, with the option of a six-person family plan going for $14.99 USD per month. The service has been endorsed by major music artists including Drake, Pharrell Williams, Chris Cornell, Bastille, FKA twigs, Alabama Shakes and Trent Reznor.

In related news, Apple is now facing two anti-trust investigations to see if the company violated laws in the deals it struck with major labels for Apple Music, the New York Times reports. Apple is reportedly being investigated in for anticompetitive behavior in both New York and Connecticut.