With Music Launch Looming, Apple Still Looking to Sew Up Indie Publishing Deals

Apple Inc. Spring Forward
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Apple Inc. sign displayed at the Yerba Buena Center before the start of the the company's Spring Forward event on March 9, 2015 in San Francisco, California.

On the heels of the indie label revolt, and its subsequent resolution reported by Billboard early this morning (Jun. 24), over terms for its streaming service, Apple is moving quickly to quell unrest within the indie music publishing sector over the contract offered to them late last week.

While the publishing contract included a higher-than-expected rate of 13.5 percent of revenues, split evenly between performance and mechanical royalties, it also contained a number of terms that left publishers concerned, besides the widely disliked expectation -- since abandoned -- that rights holders would underwrite the three-month trial period by foregoing any pay.

Publishers are concerned over a provision that gives Apple a two-year, 50 percent discount off of the contract's minimum rates if its streaming service is bundled with a mobile carrier's phone plan. In addition, for its locker cloud service, it appeared that Apple was planning to pay publishers, or have the labels pay publishers, directly instead of paying performance rights organizations, which could create logistics and accounting problems for indie publishers.

However, sources say Apple is in talks with the PROs and plans on coming to terms with them.

Meanwhile, in the wake of the open revolt from indie labels over expecting them to provide their music to the service for free for three months, and Apple's about-face offer to pay $0.002 per stream during the trial subscription, publishers, who had previously been expected to offer their songs rights for free, now anticipate being paid $0.00047 per stream based on figures giving labels 58 percent of revenue, versus publishers' 13.5 percent.

Indie publishing sources say that, in the wake of its misstep of delivering a contract that had the publishers in turmoil over the June 19-21 weekend, Apple has now been very responsive to the publisher community, and supposedly is working on tweaking that contract to alleviate publisher concerns.

An Apple spokesman wasn't immediately available for comment.