Taylor Swift

& Apple Music:

Should Apple pay musicians when users are in the 3 month free trial for Apple Music?

Taylor Swift has now gone public with her concerns about Apple Music — she believes that asking musicians to not get paid during the 3 month free trial isn’t fair. She’s withholding her latest album ‘1989’ from Apple Music as a form of protest, writing:

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.

I’m not writing this to dispute Taylor’s point, but I would like to attempt to put some numbers to what Taylor (and others) are requesting Apple do: cover the cost of payments during the 3 month free trial.

Okay, so how much would it cost Apple?

First, some assumptions:

  1. Apple Music is going to be on a ton of platforms, but it’s easiest to tease out adoption numbers from iOS, so we’re going to use that as our benchmark. Actual numbers may be much higher.
  2. We’re going to focus on the initial launch period, which begins on June 30th.
  3. There are at 520 million active iOS users (via Asymco).
  4. Even though the family plan consists of up to 6 people at a time, we’ll make this a worst case scenario calculation and assume that nobody will sign up for a family plan during the 3 month free trial.
  5. Even though the payment percentage may be different in the US vs. the rest of the world, the going rate is 70%. (Note that Apple is actually paying 71.5% in the US to make up for the 3 month free trial, but lets assume we’re in an alternate world where that isn’t the case.)So for each $9.99/month subscription, Apple will pay back $6.99 to “music owners”.
  6. The actual rate of adoption for Apple Music is something I won’t even pretend to know, but according to Mixpanel, a month after iOS 8.3's release, roughly 46% of users had updated. This means that (absent any uptick in adoption due to Apple Music promotion), we can expect roughly 239 million users to have iOS 8.4 after one month.

There’s no way for me to accurately estimate how many iOS users (out of that roughly 239 million) will try Apple Music, so I’ll side step that entirely and give a wide range of estimates.

If 20 million iOS users start a free trial to Apple Music:

$419.4 Million (20 million x $6.99 x 3 months)

Note: Spotify currently has 20 million paying users, so this is merely a reference point.

If 50 million iOS users start a free trial to Apple Music:

$1.048 Billion (50 million x $6.99 x 3 months)

If 100 million iOS users start a free trial to Apple Music:

$2.097 Billion (100 million x $6.99 x 3 months)

If 200 million iOS users start a free trial to Apple Music:

$4.194 Billion (200 million x $6.99 x 3 months)

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