To recap: Last week, as indie labels who had not signed deals with Apple for its upcoming service began to complain about the terms, Robert Kondrk, Cue's lieutenant, laid out Apple's position — it wouldn't pay music owners during the three-month trial period. But, Kondrk said, if users signed up for the paid version of the service, Apple would pay rights holders slightly more than other streaming services would.
Since Apple didn't arrive at that place overnight, but instead spent months hammering out deal points with Universal Music Group, Warner Music Group and Sony Music, we can assume that Cue and Kondrk felt strongly about that argument.
But that was before Swift pulled her album in protest — and then weighed in, convincingly, this morning. Her argument: The money that Apple would need to pay full freight for their songs would be immaterial to a company that has $200 billion in cash on hand. But that same money would be material to music owners — who are generally labels and publishers, who then pass on a portion of their revenue to musicians.
Just as important: Apple is a little more than a week away from the launch of Apple Music. And the way things stood a few minutes ago, it looked like it was going to spend that time answering questions about Taylor Swift, instead of talking up the virtues of Apple Music. Now there's a very good chance that tomorrow, this will be yesterday's news.
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UPDATE: I just got off the phone with Eddy Cue. I'm going to dump some notes in here, and then turn them into something more coherent in real time. Internet!
Cue says that Swift's letter, coupled with complaints from indie labels and artists, did indeed prompt the change. He said he discussed the about-face with Apple CEO Tim Cook today. "It's something we worked on together. Ultimately we both wanted to make the change."
Cue says Apple will pay rights holders for the entire three months of the trial period. It can't be at the same rate that Apple is paying them after free users become subscribers, since Apple is paying out a percentage of revenues once subscribers start paying. Instead, he says, Apple will pay rights holders on a per-stream basis, which he won't disclose.
So what does Taylor Swift, author of the world's most powerful Tumblr, think of this? "I did reach out to Taylor today, and talked to her, and let her know that we heard her concerns, and wanted her to know that we were making changes," Cue says. "She was thrilled to hear from us and that we were making the change, and we were grateful for that."
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Cue says he doesn't know if the changes will be enough to get Swift to put "1989" on Apple Music. He also says that wasn't his reasoning for the change. It was hard to hear him*, so it was hard to tell if he was saying that with a straight face.
Cue says he hasn't talked to any other musicians, labels or publishers yet. Apple will keep the existing royalty rates it has already hammered out with the three major music labels for subscribers, he says.
Oh. One last thing: Why put this out on Twitter? It seemed like a good way to get the word out, Cue said.
*I had my iPhone on speaker, because I was trying (unsuccessfully) to record the conversation on GarageBand, and I think Cue was on speaker as well. Also there was a loud fan above my head, because it's pretty muggy out here in deep Brooklyn tonight.