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Apple Music Signs Beggars Group, Merlin: Sources

Beggars comprises the labels 4AD, XL, Matador and Rough Trade and has had a hand in the careers of Adele, Radiohead and Arcade Fire, among others; Merlin represents 20,000 labels and distributors…

Apple Music, the hardware giant’s soon-to-launch streaming service, has landed an eleventh-hour coup, striking deals with the independents’ digital rights organization Merlin and with Martin Mills’ indie powerhouse Beggars Group, sources tell Billboard. Label group PIAS has also announced it has signed on.

In a letter sent to Merlin members, CEO Charles Caldas writes, “I am pleased to say that Apple has made a decision to pay for all usage of Apple Music under the free trials on a per-play basis, as well as to modify a number of other terms that members had been communicating directly with Apple about. With these changes, we are happy to support the deal.”

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The announcement comes on the heels of the company’s 180-degree turn on a deal term asking labels to forego royalty payments during a 90-day-free trial offered to Apple Music users. Criticism was loud and prompted Taylor Swift to write an open letter asking the company to reverse its policy.  

In a way, Swift’s blog helped ward off a slew of bad publicity the company had weathered in recent weeks. Apple was staring down a full-scale revolt from indie labels not affiliated with the majors and major-owned distributors. As it stands, most indie distributors say their labels hadn’t signed, anticipating a new contract for indies with revised terms.

One insider offers this take: “The optics don’t look good if Apple backs down to indie labels. But if they back down to an artist like Taylor Swift, it shows they are sensitive to artist concerns, unlike Spotify, who blew Taylor Swift off when she complained about the free tier.”

Merlin, which itself came under attack in 2014 for making a deal that, according to its critics, lowers its member labels’ per-stream royalty rate with Pandora (that speculation turned out to be unfounded), launched in 2008 and represents 20,000 labels and distributors worldwide and has offices in London and New York, with a head office in Amsterdam. 

Beggars is the unofficial standard-bearer for the indie community. Its leader, Martin Mills, who built the company from the ground up and is a tireless advocate for the independent music community has, until now, stood firmly opposed to Apple’s offer. 

“Given the natural response of competing digital services to offer comparable terms, we fear that the free trial aspect, far from moving the industry away from freemium services — a model we support — is only resulting in taking the ‘mium’ out of freemium,” a statement on the label’s website read.

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Beggars comprises four labels — 4AD, XL, Matador and Rough Trade — and has had a big hand in the careers of Adele, Radiohead, the Prodigy, Arcade Fire and many others.

Until now, the chorus of disapproval for Apple’s contractual terms was near deafening. French independent labels body UPFI recently shared its “deep dissatisfaction” with the conditions of Apple Music’s launch, while Australia’s independent music companies trade body AIR voiced its concerns over the royalty-free arrangement and told its members it wouldn’t endorse the contract on offer. U.S. indies body A2IM issued an alert last week to its own membership in which it noted iTunes download royalties could be cannibalized by Apple Music and it urged members to “not feel rushed to sign Apple’s current offer.”

Read Caldas’ letter in full below:

Dear Merlin Member

I am pleased to say that Apple has made a decision to pay for all usage of Apple Music under the free trials on a per-play basis, as well as to modify a number of other terms that members had been communicating directly with Apple about. With these changes, we are happy to support the deal.

As you know Merlin has not historically had a direct contract with Apple. Apple has direct deals with our members, and that continues to be the case. Therefore, the amendments referred to above will apply to your existing direct agreements, and the amended contract will shortly appear on iTunes Connect. However, Apple has indicated that in the future they are open to engaging with Merlin as a central point of communication and negotiation for our membership.

Apple has a long standing, deep rooted relationship with the music community and has always helped ensure artists get paid for their work. We think Apple Music provides artists with a business model that’s good for the long term and we look forward to its launch on June 30.

We would remind you as ever that each member must make its own independent decisions in relation to Apple Music and its business in general.

PIAS managing director Adrian Pope issued a statement confirming the indie label group and distributor had come to terms with Apple after weeks of negotiation. “A key point of improvement is that we will now receive a per stream payment from day 1 of any free trial period,” Pope said in a statement via The Quietus. “Other controls and protections have been added such that we feel this is a genuinely good deal for the labels and artists we represent. It should be noted that [PIAS] made it contingent that in us approving this agreement the same terms would be made available to all 4000+ independent labels, thus providing a fair playing field for all… Our recommendation to labels is that we now embrace the service. We are in the process of getting all relevant repertoire ready to go live on 30th June. We are also working closely with Apple on other aspects of the service, more detail on that to follow.”

Apple Music, which includes a fully-curated 24-hour international radio station (called Beats1) and a new “connect” feature, launches on June 30.

Apple had no comment. 

This story was updated to include a statement from label group PIAS.