Apple bows to Taylor Swift, but streaming revenue remains elusive

Apple Inc. has bowed to pressure from pop star Taylor Swift to pay music industry professionals royalties on music streamed by customers during a three-month free trial period for the company’s new music streaming service. But just how much money that will generate for struggling artists remains to be seen. 

Swift on Sunday posted an open letter to Apple on Tumblr, criticizing the streaming service, launched earlier this month, for not paying writers, producers or artists during the trial period. Swift said that because of that, she would withhold her hit album “1989” from the service.

“We don’t ask you for free iPhones,” Swift wrote. “Please don’t ask us to provide you with our music for no compensation.” 

Hours after Swift’s post went live, Apple’s senior vice president of Internet software and services, Eddy Cue, wrote on Twitter, “#AppleMusic will pay artists for streaming even during customer’s free trial period.” Apple declined to offer further comment but confirmed his tweet. 

Swift praised Apple’s change of heart. “I am elated and relieved. Thank you for your words of support today. They listened to us,” she said on Twitter. Swift’s publicist, Tree Paine of Premium PR, declined to offer further comment.

Some music industry analysts said Apple’s sudden about-face was strange, especially in the music industry. 

“It’s very weird for the biggest company in the world to change and openly acknowledge through Twitter that their policy shifted because an artist complained,” said Sasha Frere-Jones, who has been a music critic for The New Yorker. “And that it was so important to them that they couldn’t even wait until Monday morning.”

This is not Swift’s first run-in with streaming services. Last year she pulled her entire catalog from one of them, Spotify, saying that it undervalued her work.

Spotify said it always paid royalties during discount periods and extended trials. It declined to comment on Swift and Apple. 

In her open letter to Apple, Swift said that the decision not to stream her album was not as much about her as it was about new and smaller recording artists, many of whom could not go three months without payment. 

But the extent to which smaller recording artists can make a significant amount of money off streaming remains unclear. Frere-Jones said that bands that build robust tour followings — making money primarily through the sale of concert tickets and merchandise — aren’t as affected by the streaming deals.

“If you have a small, organic audience that pays well and there’s no middleman, you’re living a much more stable and secure life than the person who’s at the end of the chain that begins with the streaming service,” he said.

Royalty payments are typically funneled through the record companies or publishing companies. 

“The record companies get paid, not the artist,” said Ray Hair, the president of the American Federation of Musicians. “The artists have to look to the record companies to pay them in accordance with their royalty agreements. And everyone who has ever dealt with the record label knows that the record labels are very hard to deal with to get your money.”

Still, some artists say they aren’t concerned with generating income from streaming revenues.  

Max Goransson, 32, a musician who lives in Boston, is in two bands — Clouder and Quiet Loudly — that stream their music on Spotify. “We definitely got streamed thousands of times, and our royalty payout was $60,” he said.

For artists like him, the greater objective is being heard.

“It’s more valuable to have the listeners than to have the money. In an ideal world you can have both, but I’ll take what I can get,” Goransson said. “I certainly don’t play music to put food on my table.”