How Apple cut the indie music deal: The 0.2-cent solution

Executive Eddy Cue Is Key Expected To Testifiy E-Book Antitrust Case
Eddy Cue, the Apple Inc. executive the government claims was the "chief ringleader"of a scheme to fix e-book prices, right, exits federal court in New York, U.S., on Thursday, June 13, 2013. Cue said he was unaware that publishing chief executive officers were talking with one another during six weeks of intense negotiations with Apple. Photographer: Victor J. Blue/Bloomberg via Getty Images
Photograph by Victor J. Blue — Bloomberg via Getty Images

It came down to 0.2 cents per song.

That’s how much the indie labels got from Apple after Taylor Swift weighed in.

Apple has a reputation as a hard bargainer, but thanks in part to NDA penalties as high as $50 million per leak, the details rarely come to light. It took a federal antitrust suit to get Eddy Cue and the book publishers to talk.

Music guys, however, are a chatty bunch, and we’re already getting some of the backstory to what Billboard is calling the Indie Revolt.

Here’s the play-by-play a couple music execs laid out for the New York Times’ Ben Sisario:

“In the months before Apple announced Apple Music at an event in San Francisco on June 8, the company had extensive talks with Universal, Sony and Warner, the three major labels, and struck the first of its deals with those labels only days before the announcement.

“But independents were not sent proposals by Apple until the day of the event, and they were told they had five days to approve them with no possibility of negotiation, according to two executives with knowledge of the talks.”

This is classic Eddie Cue, learned at Steve Jobs’ knee. He starts with the majors, dictates the terms, sets a hard deadline and doesn’t give an inch.

It took a pop diva to get Apple to budge. And then by only $0.002.

Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple (AAPL) coverage at or subscribe via his RSS feed.

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