The Apple Music dilemma: Who pays for a free trial?

Update: Apple's Eddy Cue has announced Apple Music will pay artists during free trial period. So they went for option 2, below.

For the first ninety days of Apple Music, customers won't be asked to pay anything, and neither Apple nor the music industry — including artists — will be getting paid. Customers will get all of Apple Music for free, while iTunes supplies the service and the industry — including artists — supplies the content with no up-front remunerations. That's led to some artists declining to participate and voicing their concerns through the media, traditional and social.

Andy Heath, the chairman of UK Music, spoke with The Telegraph:

Hit recording artist Taylor Swift expressed her concerns on Tumblr:

For the company's part, Apple's vice-president of iTunes Content, Robert Kondrk, told re/code:

I certainly don't know enough about the industry and its dynamics to speak with any authority on what should or shouldn't be happening. There don't seem to be many options, however, for how to do it differently:

1. Change the trial period from ninety days to somewhere between zero and thirty days. At zero days, the recording industry would start getting paid immediately, though it might hurt adoption of the new service since there's no free tier. (Competing services seem to offer free trials and tiers.) At seven, fourteen, or thirty-days, the recording industry would get paid sooner, but would it risk some customers not getting as invested in the service as they might with a longer trial?
2. Have Apple subsidize all or part of the ninety-day trial. Since Apple has over a hundred billion in the bank — some of that domestic, most of it international — they could afford to pay artists out of the company's own coffers during the trial period. That would certainly make the music industry — especially artists — happy. Apple is a for-profit company, however, already donating the services side of the business for free for those ninety days. Apple is also a frequent target for anti-trust litigation, already having been sued over eBooks and already being investigate for music. Could subsidizing longer than industry standard Apple Music trials be seen as unfair competition?
3. Create a conversion bonus when customers start paying. Although Apple says the company will be paying higher rates to compensate for the longer trial, perhaps the music that customers listened to during the free trial could receive additional compensation once the customer converts to paying. It would still mean a period of non-compensated content, and a higher cost to Apple who's already providing the service at no-cost, but could it better reward the content that is participating in the trial?
4. Let artists opt-out of the free trial. That way, anyone who feels like they can't afford to contribute their music as a way to secure subscription revenue sharing going forward can withhold it at first. (It seems like Taylor Swift and others are doing this already by excluding, for example, recent albums.) If all the desirable music is absent from the free trial, however, could it also risk significantly hurting conversions to the paid version?
5. Show ads during the free trial. Ad-supported free trials and tiers aren't uncommon in streaming music services. They also haven't proven to be successful revenue generators, or great experiences for anyone. Apple will be using ads in News, though, so could the company and the industry figure out a way to use them in Music?
6. Let customers who choose to start paying at any time. It may or may not be planned like this already — I don't know — but Apple could let any customer who chooses to skip any part of the free ninety-day trial and start paying immediately. That way, if anyone wanted to make sure the music industry received more compensation, they could do so. How many people, however, would choose to pay before they absolutely had to?

Regardless of what happens, all of this highlights just how tough a problem streaming music really is to solve. That it hasn't been solved to many people's satisfaction yet is an even bigger indicator.

One additional note — I've been using the term "music industry" here because "artists" isn't really accurate. It's not "artists" that aren't getting paid, it's the entire industry, including labels and other middle-people and brokers. And those middle-people and brokers are never thrown under the bus anywhere nearly as hard and repeatedly as they should be.

Traditionally artists have been screwed by labels, and it's so bad they'll try to get the compensation they truly deserve from anyone and everyone else. Even if Apple did choose to subsidize the ninety trial completely, how much of that money would really end up in the hands of the artists?

The system, in general, is archaic and broken, and until it's fixed, it's hard to see anything helping artists directly outside the traditional revenue generators of live performances and ancillary merchandizing.

In an ideal world, the Taylor Swifts, Trent Reznors, and indie artists would be working with Apple to create a way for them to make sure artists get paid better and more significantly, in general, even without labels.

A streaming service that pays better, and more directly to the writers, producers, singers, and musicians, sounds like the solution almost everyone wants.

Unless and until that happens, this question is going to be hard to solve: Who pays for free trials?