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APPLE, INDIES AT IMPASSE—REPORT

Music Business Worldwide’s Tim Ingham continues to advance the Apple Music narrative, today looking into the tech titan’s ongoing efforts to get the indie labels on board.

The Big Three have now signed a licensing deal for Apple’s new service, Ingham’s source informs him, but no deal has yet been reached between Apple and Merlin—the org representing such prominent independent labels as XL, Domino, Matador, Cooking Vinyl, Rough Trade, [PIAS], Ninja Tune, Armada and Razor & Tie.

Now, it appears, after getting nowhere in talks with Merlin, Apple is aiming to strike direct deals with individual labels—but there’s a major sticking point: Apple’s refusal to offer any royalty payments to indie labels for music played during the first three months of Apple Music, when it will be completely free to listeners.

“We’re used to helping with free trials when streaming services are not established,” one independent label exec told MBW. “But this is Apple, with hundreds of millions of customer credit card details. Offering no compensation at all to labels for a trial that will help Apple sell its devices is hugely disappointing.”

One source even told MBW: “No indie worth their salt will sign this.”

Other concerns: Decreased cash flow for the indies resulting from Apple cannibalizing iTunes download sales in promoting the streaming service, and the fear that Apple Music’s free trial will hurt usage frequency on Spotify—and, therefore, their bottom line.

Should the indies and Apple not reach deals by the end of the three-month free trial, Ingham notes, then it will be up to individual labels to decide whether their music remains on Apple Music unlicensed, or is pulled down.

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