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Apple Inc. (AAPL) Out to Win Music War with an Army of Indie Artists

Apple (AAPL) Music

Apple Inc. (NASDAQ:AAPL) has responded to Google Inc. (NASDAQ:GOOGL)’s challenge in the music wars with another weapon. Apple’s new weapon is an army of indie artists. News breaking yesterday reveals that Apple has signed on thousands of independent record labels to participate in its music service. The launch of Apple Music streaming service comes on June 30.

Apple (AAPL) Music

Google Throws the First Punch

Apple was the object of a public shaming from Taylor Swift over the weekend. Ms. Swift called the company out on its decision not to pay royalties during the 3-three month free trial of Apple Music. Apple did not hesitate to do an about face as the firm publicly announced another decision to pay artists during those three months of trials.

Google didn’t miss the chance to stick it to Apple in the heat of the news. Google announced yesterday that it was opening up a free-tier of its Google Play Music. However, it would pay royalties to artists whose songs are streamed by free users. Google’s was subtly taking a jab at Apple – a jab that will attract users because its free nature and attract artists because of the openness.

Apple Recruits Army of Indie Artists

Billboard reports that Apple has signed on the highly influential Beggars Group indie conglomerate to its Apple Music service. Beggar Group includes 4AD, XL Recordings, and Matador. Apple has also signed WIN and Merlin to its service. Merlin is a digital rights agency that is home to about 20,000 indie artists. Adele and the Artic Monkeys are currently on the Merlin platform and they are likely to be coming over into Apple Music.

Money is Another Weapon

Apple is not only relying on the talent pool offered by an army of indie artists to win the music streaming wars. Apple is also deploying money as a major weapon for a counter attack on Google.

Apple responded yesterday by saying that it won’t only pay artiste for the music streamed during the trial period, it would pay much more than Google and other competitors. Spotify pays somewhere between $0.006 and $0.0084 per stream. Google pays royalty on a somewhat fuzzy nature based on the percentage of the total streams that come from an artiste’s music. Apple blows everything out of proportion with rumors that it will pay $0.2 per stream.

Apple will be attracting users to sign up for Apple music with a list of exclusive hits. Pharrell’s “Freedom: will be available exclusively on Apple Music starting from its launch on June 30.

Final Words…

It doesn’t take a rocket scientist to figure that music exclusivity costs money. In addition, paying royalty for streamed music during the three-month free trial will also cost money. Apple has tons of money and it would be interesting to watch out Apple’s new weapons of indie artists and money shape the music streaming scene going forward.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.