Taylor Swift's biting Apple letter is followed by artist royalties change

Taylor Swift has Apple changing its tune.

Hours after the pop superstar criticized the giant tech company in an open letter posted online, Apple announced Sunday that it will pay royalties to artists and record labels for music played during a free, three-month trial of its new streaming music service.

"When I woke up this morning and I saw Taylor's note that she had written, it really solidified that we needed to make a change," said Apple senior vice president Eddy Cue in an interview with The Associated Press.

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Apple had already agreed to share revenue from paid subscriptions to the new Apple Music service, which will cost $10 US a month. But Swift said she would withhold her latest album from the service because Apple wasn't planning to pay artists and labels directly for the use of their music during the free, introductory period.

"We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation," Swift wrote in an open letter posted Sunday on her Tumblr page, under the heading "To Apple, Love Taylor. "

Apple has maintained that it negotiated revenue-sharing at rates that are slightly higher than the industry standard, to compensate for the three months that it plans to offer its streaming service without charge.

"We had factored that in," Cue said Sunday. But he added, "We had been hearing from artists that this was going to be rough on them, so we are making this change."

Cue declined to say how much Apple will pay in royalties for streaming during the free trial period. He said Apple will share 71.5 per cent of its revenue from paid subscriptions within the United States and 73 per cent from subscriptions outside the country, while other streaming services generally share about 70 per cent.

Some artists and independent labels had worried they would miss out on opportunities to get a financial return from new music that is released during the three-month trial. Swift said she spoke out on their behalf.

Swift wasn't immediately available for comment on Apple's change of heart. But she posted a reaction on Twitter late Sunday, saying "I am elated and relieved. Thank you for your words of support today. They listened to us."

Cue wouldn't comment on whether she will now make her album 1989 available on Apple Music. But he said he spoke with Swift personally on Sunday. "She was very pleased to see that we would give her a call right away and have a discussion," he said.

Since Apple began selling digital music through its iTunes store in 2001, he added, "We've always loved music and have strived to make sure that artists are getting paid for their work."

Swift had written in her letter that she found Apple's original stance to be "shocking, disappointing, and completely unlike this historically progressive and generous company."

While praising Apple for developing a paid music service that will compensate artists, she added, "We know that this incredible company has the money to pay artists, writers and producers for the 3 month trial period."

The singer and songwriter has been outspoken on the issue of compensating musicians for streaming music. Last year, Swift pulled her catalog of recordings from Spotify after complaining about its use of her music on the free, ad-supported version of its service.

Here's the full text of Swift's post:

To Apple, Love Taylor

I write this to explain why I'll be holding back my album, 1989, from the new streaming service, Apple Music. I feel this deserves an explanation because Apple has been and will continue to be one of my best partners in selling music and creating ways for me to connect with my fans. I respect the company and the truly ingenious minds that have created a legacy based on innovation and pushing the right boundaries.

I'm sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the service. I'm not sure you know that Apple Music will not be paying writers, producers, or artists for those three months. I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company. 

This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt. This is about the producer who works tirelessly to innovate and create, just like the innovators and creators at Apple are pioneering in their field…but will not get paid for a quarter of a year's worth of plays on his or her songs.

These are not the complaints of a spoiled, petulant child. These are the echoed sentiments of every artist, writer and producer in my social circles who are afraid to speak up publicly because we admire and respect Apple so much. We simply do not respect this particular call.

I realize that Apple is working towards a goal of paid streaming. I think that is beautiful progress. We know how astronomically successful Apple has been and we know that this incredible company has the money to pay artists, writers and producers for the 3 month trial period… even if it is free for the fans trying it out.

Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. I say this with love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the progression towards a streaming model that seems fair to those who create this music. I think this could be the platform that gets it right.

But I say to Apple with all due respect, it's not too late to change this policy and change the minds of those in the music industry who will be deeply and gravely affected by this. We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation.

Taylor