Apple's decision to reverse its policy on paying artists during Apple Music's three-month trial period shows the company is only aware of the needs of top-tier artists, and that is a mistake, said Smashing Pumpkins lead singer Billy Corgan on Monday.
"Apple is making the same mistake Tidal made," Corgan said in an interview with CNBC's "Squawk Alley."
The tech giant reversed its policy after pop singer Taylor Swift released an open letter to Apple on Sunday explaining why she would be holding back her "1989" album if artists wouldn't be compensated during the free-trial period.
"Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing," Swift said in the letter.
"I applaud her for taking a stand, but this is going to be played out by the media as 'Taylor versus Apple,' and that's not the real story. The real story is the 10,000 other artists that Apple doesn't pay attention to past their top 12," Corgan added.
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He also said this would only end if artists within the industry "wake up."
"Once artists understand the power they have in this marketplace, all heck's going to break loose. This is a big admission on Apple's part that they're afraid of the negative tide that could be beginning, so they want to nip it in the bud," Corgan said.
"We're not being paid commensurate to our value to Apple, Spotify or to anybody. Once the artists wake up, there's going to be a bloody turf war, and this is a very big sign of what I've been predicting."
Shares of Apple were higher Monday afternoon.