Apple Says It Will Pay Taylor Swift for Free Streams After All

Taylor Swift isn’t just the biggest pop star in the world. She’s also the world’s most effective Apple lobbyist.

This morning, Swift wrote an open letter to Apple — on Tumblr — complaining about the company’s policy of not paying music owners when people try its upcoming Apple Music service for a three-month trial period.

Tonight, Apple media boss Eddy Cue appears to have capitulated. “#AppleMusic will pay artist [sic] for streaming, even during customer’s free trial period,” Cue wrote on Twitter, without elaborating about who Apple would pay, or how much, or any other detail.

Update: Here are some details below, with the full mini-Tweetstorm that Cue put out tonight (apparently without the help of a copy editor):

https://twitter.com/cue/status/612824625345511425

https://twitter.com/cue/status/612824775220555776

https://twitter.com/cue/status/612824947342229504

No word from Swift or her camp about whether Apple’s move is enough to get her to put “1989,” her newest album, on Apple Music when it launches June 30. We’ll also have to wait for the indie labels like Beggars Banquet, who had made the same gripe. Note that Cue’s comments are aimed at them, too.

Update: Swift, via Twitter, says this is pretty cool. “I am elated and relieved. Thank you for your words of support today. They listened to us.”

So in the absence of any information, let’s just speculate. It’s the Internet!

To recap: Last week, as indie labels that had not signed deals with Apple for its upcoming service began to complain about the terms, Robert Kondrk, Cue’s lieutenant, laid out Apple’s position — it wouldn’t pay music owners during the three-month trial period. But, Kondrk said, if users signed up for the paid version of the service, Apple would pay rights holders slightly more than other streaming services would.

Since Apple didn’t arrive at that place overnight but instead spent months hammering out deal points with Universal Music Group, Warner Music Group and Sony Music, we can assume that Cue and Kondrk felt strongly about that argument.

But that was before Swift pulled her album in protest — and then weighed in, convincingly, this morning. Her argument: The money that Apple would need to pay full freight for their songs would be immaterial to a company that has $200 billion in cash on hand. But that same money would be material to music owners — who are generally labels and publishers, who then pass on a portion of their revenue to musicians.

Just as important: Apple is a little more than a week away from the launch of Apple Music. And the way things stood a few minutes ago, it looked like it was going to spend that time answering questions about Taylor Swift instead of talking up the virtues of Apple Music. Now there’s a very good chance that tomorrow, this will be yesterday’s news.

Update: I just got off the phone with Eddy Cue. I’m going to dump some notes in here, and then turn them into something more coherent in real time. Internet!

Cue says that Swift’s letter, coupled with complaints from indie labels and artists, did indeed prompt the change. He said he discussed the about-face with Apple CEO Tim Cook today. “It’s something we worked on together. Ultimately, we both wanted to make the change.”

Cue says Apple will pay rights holders for the entire three months of the trial period. It can’t be at the same rate that Apple is paying them after free users become subscribers, since Apple is paying out a percentage of revenue once subscribers start paying. Instead, he says, Apple will pay rights holders on a per-stream basis, the amount of which he won’t disclose.

So what does Taylor Swift, author of the world’s most powerful Tumblr, think of this?  “I did reach out to Taylor today, and talked to her, and let her know that we heard her concerns, and wanted her to know that we were making changes,” Cue said. “She was thrilled to hear from us and that we were making the change, and we were grateful for that.”

Cue says he doesn’t know if the changes will be enough to get Swift to put “1989” on Apple Music. He also says that wasn’t his reasoning for the change. It was hard to hear him*, so it was hard to tell if he was saying that with a straight face.

Cue says he hasn’t talked to any other musicians, labels or publishers yet. Apple will keep the existing royalty rates it has already hammered out with the three major music labels for subscribers, he says.

Oh. One last thing: Why put this out on Twitter? It seemed like a good way to get the word out, Cue said.

* I had my iPhone on speaker, because I was trying (unsuccessfully) to record the conversation on GarageBand, and I think Cue was on speaker as well. Also there was a loud fan above my head, because it’s pretty muggy out here in deep Brooklyn tonight.