Independent record labels in the U.K. aren't excited for Apple Music to launch, and have even gone so far as to say the contract terms will put them out of business. The labels are saying the three month free trial period for subscribers will cut so deep into their revenue stream that they won't be able to keep their doors open.
Indy U.K. labels say Apple Music terms will put them out of business
"If you are running a small label on tight margins you literally can't afford to do this free trial business," said UK Music industry lobby chairman Andy Heath. He added that no independent UK labels have signed on to Apple Music, and none plan to.
The labels are concerned over contract terms that say they won't get paid music royalties for the three month trial where subscribers can listen for free. Once subscribers do start paying, U.S. record labels will get 71.5 percent of the money, and labels outside the states will get about 73 percent.
That 73 percent isn't, however, enough to make U.K. indy labels happy. They see the deal as three months without streaming music revenue, and that's just too much for them to swallow.
Apple Music is set to launch at the end of June and the company is still working on deals to bring more music on board. When Apple Music launches, it'll include an iTunes Match-like music service, a global Internet radio station, and a social networking platform where artists can interact with their fans, all for US$9.99 a month.
The money Apple is offering just isn't enough to entice the independent record makers, Mr. Heath told The Telegraph. "Smaller labels would be completely screwed," he said.
Apple's new entrance into the streaming music market may have the potential to be a game changer, but the terms it's offering just won't cut it with the indy labels. Apple's terms will "literally put people out of business," Mr. Heath said.