British indie labels object to Apple Music's terms, may withhold artists like Adele and the Arctic Monkeys
Independent music labels in the UK are reportedly loath to agree to Apple's demand that they receive no royalties for songs played during Apple Music's three-month free trial period, a sticking point that could leave the new streaming service missing some major artists at launch.
Industry lobbyist Todd Heath used some fanciful rhetoric when discussing the matter with The Telegraph, saying that small labels would not be able to absorb the potential financial hit that could come with losing three months of download sales to consumers who switch to Apple Music. Such a move would "literally put people out of business," he said.
"If you are running a small label on tight margins you literally can't afford to do this free trial business," Heath added. "Their plan is clearly to move people over from downloads, which is fine, but it will mean us losing those revenues for three months."
Among the labels who have apparently failed to reach an accord with Apple are XL Recordings and Domino, which respectively count Adele and the Arctic Monkeys among their signed artists.
The free trial was also said to be a "bone of contention" during Apple's negotiations with major U.S. labels, with Apple eventually prevailing thanks to a promise of higher-than-average royalty rates for paying customers. Apple is expected to pay 71.5 percent of revenue to rights holders in the U.S., with that sum rising as high as 73 percent abroad.
Announced during Apple's Worldwide Developers Conference last week, Apple Music will launch on June 30 for $9.99 per month, or $14.99 per month for a family of up to six people.