Apple Music Streaming Service Terms Dismay Indie Record Companies

Apple's new streaming music service will not arrive until June 30, but the company has already upset independent record companies because of its proposed licensing terms.

The new service, Apple Music, includes downloads for sale and a $10-a-month subscription streaming feature along the lines of Spotify or Rhapsody. Apple has said that at least 71.5 percent of the revenue from the service will be paid out in royalties, but labels and music publishers will not be paid during a three-month trial - a deal that major record companies have apparently agreed to but one that has proved unpalatable to many smaller ones.

On Wednesday, Beggars Group, one of the world's largest indie labels, whose acts include Adele, Vampire Weekend and Thom Yorke of Radiohead, posted a statement saying that, while it considered Apple "a wonderful partner for the last decade," it was puzzled by the lack of royalty payments during the trial. "We struggle to see why rights owners and artists should bear this aspect of Apple's customer acquisition costs," the statement said.

Apple declined to comment.

Since Apple's new service was unveiled last week, others in the independent sector have openly questioned its proposed licensing terms. While the 71.5 percent rate that Apple has offered narrowly exceeds the 70 percent that is standard on many such services, label executives say they worry that the loss of streaming income from a new release that comes out during Apple's trial could be devastating.

The Association of Independent Music, a trade group in Britain, said this week that the Apple deal "does not meet a standard of commercial fairness that we can endorse," while the group's counterpart in the United States, the American Association of Independent Music, has advised its members, "please do not feel rushed to sign Apple's current offer."

© 2015 New York Times News Service