Was this decision prompted by Taylor Swift's letter?
Cue: We've been hearing a lot of concern from indie artists about not getting paid during the three-month trial period, which was never our intent. We never looked at it as not paying them.
We had originally negotiated these deals based on paying them a higher royalty rate on an ongoing basis to compensate for this brief time. But when I woke up this morning and saw what Taylor had written, it really solidified that we needed to make a change. And so that's why we decided we will now pay artists during the trial period and we'll also keep the royalty rate at the higher rate.
Did you reach out to Taylor?
Cue: I actually did talk to Taylor today and I let her know that we heard her concerns and are making the changes. She's on tour in the U.K. and she was in Amsterdam. I wanted her to hear directly with from us. We've had a long relationship with Taylor.
How did she react?
Cue: She was thrilled and very thankful. You can tell by the letter she wrote that she's a great admirer of Apple and we've done a lot of great work together. So she was really excited to see how quickly we responded and thrilled that we did.
Is Apple eating the cost?
Cue: We're certainly paying for it yes. We're all in. But we view this as: music is a part of our DNA -- we talk about it a lot. We love music and we've always strived to have great relationships with the music community and we have a deep respect for what they do. We're in this for the long term.
What was the original thinking behind asking the labels to agree to free for 90 days?
Cue: First thing is we're promoting great music, so we wanted to make sure everyone had the opportunity to try it out and have experience with it so that's what the trial period is there for. Once the trial period is over, they would [either] convert to a paying customer or they would decide that the service is not for them and so we thought that by giving them that time, people would see this revolutionary streaming service, the first worldwide live international radio station, how fans can connect with their favorite artists...
Once you read the letter, what were the next steps? How did the decision get made?
Cue: The good news about that [Apple CEO] Tim [Cook] and myself can make decisions very, very quickly by talking to each other. It was something we had already been discussing for the past week.
What was Jimmy Iovine's reaction?
Cue: Jimmy was very supportive of our decision. What we've always tried to do is compensate artists along with making it great for bands and customers.
Has the PR battle surprised you?
Cue: Going through all of this to get to the right place and get a great service to fans, that's the really important part.
Does Taylor Swift now speak for all artists?
Cue: Well, we've heard from other indie artists, but she's a great artist herself, and it's great when she speaks up on what her positions are.
