Apple Music Executive Questions Free Music Tiers in Streaming Industry

In a recent address at the National Music Publishers Association (NMPA) annual meeting, Oliver Schusser, Vice President of Apple Music and International Content, expressed his concerns regarding the prevalence of free music tiers offered by various streaming services. Speaking alongside NMPA CEO David Israelite, Schusser stated, "I think it’s crazy that 20 years in, we still offer music for free. We’re the only service that doesn’t have a free service. As a company, we look at music as art, and we would never want to give away art for free."

This statement reflects a growing sentiment among music industry leaders that the practice of providing free access to music devalues artistic work. Schusser drew a parallel between the music streaming model and Apple’s approach to its television streaming service, Apple TV+. He pointed out, "In January we added the most successful show in the world on AppleTV+. It’s called ‘Severance.’ You know what you have to do to watch ‘Severance’? You had to sign up to Apple TV+ and pay $10. It isn’t available anywhere for free."

The discussion around free music tiers is set against a backdrop of ongoing tension within the music industry. As highlighted by Israelite, the music publishing community has been embroiled in disputes over payment structures with major streaming platforms. Israelite remarked, "The songwriting and music publishing community has been in what seems like a never-ending dispute with Spotify, a company that’s constantly attacking songwriters and trying to cut what they pay."

Furthermore, Israelite pointed out that Spotify's recent initiatives, such as bundling music with audiobooks, have exacerbated financial strains on songwriters. "We lost over $230 million last year as a direct result of Spotify’s bundles," stated Danielle Aguirre, NMPA Executive Vice President and General Counsel. She added that the introduction of similar offerings by Amazon Music has led to a significant revenue decline: "In the first three months since Amazon started bundling, we’ve seen a 40 percent decrease in music revenue from Amazon."

Despite the challenges posed by these bundling strategies, the music publishing sector did see a 17 percent growth in revenue in the United States last year, reaching over $7 billion. However, Israelite indicated that the growth could have been more substantial without regulatory hurdles such as mechanical royalties.

The debate over free music access encapsulates broader issues within the industry, including fair compensation for creators and the sustainability of business models in an era of digital consumption. As streaming services continue to evolve, the implications of these discussions will likely resonate throughout the industry, shaping the future landscape of music consumption and artist compensation.

As companies like Apple Music maintain their stance against free tiers, the pressure will mount on competitors to reconsider their strategies in light of an industry increasingly focused on valuing artistic contributions. The outcome of these tensions may have lasting effects on how music is consumed and compensated, potentially redefining the relationship between artists and streaming platforms in the digital age.