Australia’s independent music companies trade body AIR has told its members its “not satisfied” with the deal Apple Music is offering to indie content owners.
AIR, which represents more than 160 members and is itself a member of the Worldwide Independent Network (WIN), shared a carefully-worded statement on Wednesday in which it raised big questions about the new streaming model’s decision to not pay royalties during free, three-month trials. “This is a major problem for any label that relies on new releases rather than deep catalog, as the potential for this free trial to cannibalize not only download sales, which remain a very important revenue stream, but also streaming income from other services, is enormous,” the Melbourne-based trade association notes.
The statement continues, “As a whole the independent sector is a powerful voice in the music industry but its individual parts, the smaller labels particularly, cannot withstand such a potentially catastrophic drop in revenue. Essentially Apple is asking the independent music sector to hedge its risk, to fund their customer acquisition program and to shoulder the financial burden for their global launch.”
Apple finally unveiled details of its streaming project earlier this month with a presentation in San Francisco. The subscription service includes Beats 1 radio programming, costs $9.99 per month (or $14.99 per month for the family plan) and will launch on June 30. It also has a social-like feature called Connect, and users' iTunes catalog and playlists automatically port to the subscription offering.
AIR notes that Apple has always “been a valued partner to the music industry” but its controversial decision to “withhold income from the independent music sector is against the spirit of collaboration that we have come to expect from them.”
AIR notes “many of our members have already expressed very real concerns about the consequences" of signing a deal and the trade body concludes, in its present form, the agreement “sadly does not meet a standard of commercial fairness that we can endorse.”
The association was incorporated in 1996 with a remit to represent the independent industry on issues of national and international significance, and to offer a range of projects and services for its membership.
Its CEO Dan Nevin has expertise in the digital music environment. He joined late last year from JB Hi-Fi, the country’s runaway market-leader in CD sales, where he’d served in recent years as digital music manager. AIR also publishes the Carlton Dry Independent Music Charts (AIR Charts) and hosts the annual Carlton Dry Independent Music Awards, which was held last week in Melbourne.
AIR’s stance follow A2IM’s alert last week to its own membership. In a blog post, the U.S. indies body expressed concern, noting iTunes download royalties could be negatively affected by Apple Music and it urged members to "not feel rushed to sign Apple’s current offer."