Apple Music Exec Slams Free Streaming, Igniting Music Industry Price Debate
A Heated debate over the true value of music has erupted following comments from Apple Music’s top executive, Oliver Schusser. Schusser openly questioned the continued prevalence of free, ad-supported music streaming tiers offered by competitors, suggesting that these models cheapen music as an art form. At The National Music Publisher Association’s (NMPA) annual meeting, the discussion centered on ensuring music’s value is maximized in the digital age, especially with concerns surrounding fair compensation for artists and publishers in the era of music streaming.
Apple Music Stands Firm Against Free Tiers
“I Think it’s crazy that 20 years in, we still offer music for free,” Schusser, Apple’s Vice President of Apple Music and International Content, stated during a keynote interview with NMPA Ceo David Israelite. He emphasized Apple’s unique position as the only major streaming service without a free option. Apple views music as a form of art and, therefore, believes it should not be given away without charge.
Schusser further asserted, “It makes no sense to me. We don’t have a free service, we will not have one, we have no plans for one.”
Spotify Defends Its ad-Supported Model
While Schusser didn’t directly target any specific service, Spotify, the world’s largest streaming platform, prominently features a free, ad-supported tier. In response to schusser’s remarks, a Spotify spokesperson released a statement defending their multi-tier approach.
The company stated that Spotify remains the highest revenue driver in the music industry and that their ad-supported tier functions as a crucial gateway, attracting more listeners who later upgrade to premium subscriptions. “Spotify paid out over $10 billion to the music industry in 2024 – the most of any service. Our multi-tier model is a key factor in consistently paying out more than every other retailer or streaming service annually,” the spokesperson noted.
Spotify also claims that “more than 60 percent of premium subscribers began as ad-supported users.”
The Broader Debate on Streaming Service Pricing
The pricing of music streaming services remains a contentious issue.While streaming platforms are credited with saving the music industry from piracy by offering a convenient and affordable option to buying individual albums, many industry leaders think these services could be priced higher to adequately reflect music’s true value. Sony Music Ceo Rob Stringer suggested that ad-supported platforms should implement a “modest fee” for their service.
Did You Know? In Q1 2024, music streaming accounted for 84% of all music revenue in the United States, highlighting its dominance in the industry.
Publishing Revenue Growth and Challenges
Despite the pricing debates, the NMPA revealed positive figures, reporting that music publishing revenue in the U.S. surpassed $7 billion last year, a 17 percent increase from the previous year.However, NMPA also indicated that growth faces hurdles, including government regulation and the bundling of subscriptions. Danielle Aguirre noted significant revenue losses, stating, “We lost over $230 million last year from Spotify’s bundles.”
Aguirre added that early data indicates a ample drop in music revenue since Amazon began offering bundled subscriptions.
Pro Tip: Songwriters can explore various collection societies to ensure they receive all eligible royalties.
Social Media’s Role in Songwriter Compensation
Aguirre also expressed concerns about social media platforms, asserting that they are “failing songwriters” due to insufficient payments. She highlighted TikTok, which generated $18.5 billion in revenue last year, with music featuring in 85% of the videos.
Solidarity for Songwriters
Israelite emphasized the importance of unity, urging all stakeholders in the music business to support songwriters.”Without a healthy songwriter economy, the entire system suffers,” Israelite stated. “I’m calling on recording artists, managers and record labels to stand with non-performing songwriters whenever and wherever they strive.”
NMPA Event Highlights
The NMPA meeting also featured awards and performances.Gracie Abrams and Aaron Dessner performed a duet of their co-written hit, I Love You, I’m Sorry. Kacey Musgraves received the Icon Award, and rhett Akins was honored as a Non-Performing Songwriter Icon.
Thomas Rhett paid tribute to his father by performing his music, and Leon Bridges honored Musgraves with a cover of “Lonely Millionaire.” Musgraves concluded the evening with a performance of “The architect.”
The Evolving landscape of Music Royalties
The music industry continually grapples with adapting royalty structures for the digital era. In 2023, the Copyright royalty Board (CRB) set new mechanical royalty rates for streaming services in the U.S. for the period 2023-2027. These rates dictate the percentage of revenue that streaming services must pay to music publishers and songwriters for the use of their compositions.
However, the debate continues, with publishers arguing that the rates don’t fully account for the value of music in the digital landscape. The rise of AI-generated music is also posing new challenges, as the industry seeks to determine how to fairly compensate rights holders when AI is used in the creative process.
key Stakeholders in the Music Royalty Ecosystem
| Stakeholder | Role | Key Concerns |
|---|---|---|
| Songwriters | Create original musical works | Fair compensation for their compositions, impact of streaming rates |
| Music Publishers | Manage and promote songwriters’ works | Negotiating fair royalty rates, combating copyright infringement |
| Streaming Services | Distribute music to consumers | Balancing profitability with royalty obligations |
| Collection Societies (e.g., ASCAP, BMI) | Collect and distribute royalties on behalf of songwriters and publishers | Ensuring accurate royalty distribution, advocating for fair rates |
Frequently Asked Questions
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Why is Apple Music against free streaming tiers?
Apple music views music as an art form and believes offering it for free devalues its worth.They maintain that they will not introduce a free, ad-supported tier.
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How does Spotify defend its free streaming model?
Spotify argues that its ad-supported tier attracts new users who often convert to premium subscriptions, thus increasing overall revenue for the music industry.
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What are the concerns about music royalties from streaming services?
music publishers are concerned that bundled subscriptions, such as those including audiobooks, dilute royalties paid to songwriters and publishers.
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How much revenue did music publishing generate in the U.S. last year?
Music publishing revenue in the U.S. reached over $7 billion last year, marking a 17% increase from the previous year.
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what impact do social media platforms have on songwriter compensation?
Some argue that social media platforms like tiktok, despite generating significant revenue from music-based content, provide inadequate compensation to songwriters.
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What is the NMPA’s stance on music streaming and songwriter compensation?
The National Music Publishers Association (NMPA) advocates for fair compensation for songwriters and has taken actions against practices that diminish their royalties.
What are your thoughts on free music streaming tiers? Should social media platforms pay songwriters more fairly? Share your opinions in the comments below!
