The Australian Independent Record Labels Association (AIR) has today expressed its dissatisfaction with the current Apple Music deal, due mainly to the fact that right holders will receive no royalties during the three-month trial period for new subscribers.
AIR explained in a written statement: "This is a major problem for any label that relies on new releases rather than deep catalogue, as the potential for this free trial to cannabalize not only download sales, which remain a very important revenue stream, but also streaming income from other services, is enormous.
AIR explain that the smaller labels will suffer immensely due to the current deal in place.
"As a whole the independent sector is a powerful voice in the music industry but its individual parts, the smaller labels particularly, cannot withstand such a potentially catastrophic drop in revenue."
"Essentially Apple is asking the independent music sector to hedge its risk, to fund their customer acquisition programme and to shoulder the financial burden for their global launch."
The statement goes on to say that the lack of consultation Apple had with the independent music sector over deal terms leads them to believe the agreement could have short term consequences for its members.
"Apple has always been a valued partner to the music industry but this decision to withhold income from the independent music sector is against the spirit of collaboration that we have come to expect from them."
AIR conclude the statement: "...in its present form, this agreement sadly does not meet a standard of commercial fairness that we can endorse."
Speaking to TheMusic, AIR CEO Dan Nevin declined to comment saying: "As we know more, we'll have more to say."
