Is Apple Music Doomed to Fail Before It Begins?

NEW YORK ( TheStreet) -- As Apple  (AAPL) readies its new music streaming service to go live next week, big-name artists are starting a fight over compensation that might keep the platform from getting off the ground.

Taylor Swift, who pulled her entire music library from Spotify late last year, now says that her newest album, 1989, won't be available for streaming on Apple's new service, according to BuzzFeed. Other independent music labels are starting to follow suit.

Adele, Bon Iver, The White Stripes, Vampire Weekend and The xx are all part of the Beggars Group label, which announced that it also won't be a part of the Apple Music launch. The group's principal concern is over the free, three-month trial Apple is offering its users. The company has asked artists to forgo their royalty fees during this trial period, which is a major point of contention with the labels.

"The Taylor ship has sailed," said Mark Mulligan, author of the "Music Industry Blog." Even if Apple were the biggest music service that offered the best rates for artists, it couldn't make it successful without the indie labels, Mulligan added. "That's too big for Apple not to fix."

Apple, for its part, is betting that musicians will accede to the potential of a service that could provide a new and lucrative source of revenue. The company didn't respond to a request for comment for this article.

"(Artists) can hold their breath and ask for more, but the reality is that something is better than nothing," Michael Pachter, managing director of equity research at Wedbush Securities, said in an email. "There is no music union that is going to call a general strike against the streaming services."

While Swift has barred her new album from the streaming service, the backlog of her material, which is already available on iTunes, will be a part of the streaming service, according to BuzzFeed.

The American Association of Independent Music (A2IM) has joined those standing against Apple. The label group advised its artists to "not feel rushed to sign Apple's current offer," as it also feels cheated by the three-month free trial of Apple Music.

"It is surprising that Apple feels the need to give a free trial as Apple is a well-known entity, not a new entrant into the marketplace," A2IM said in a press release. "We are struggling to understand why rights holders would authorize their content on the service before (the end of the free trial.)"

Streaming services such as Apple Music are becoming the new music norm, but it might take a while for the kinks to be worked out, according to Mulligan.

"Until we have north of 100 million subscribers -- and we have about half that now -- most artists will see digital revenue paying less than downloads," Mulligan said. "We are in a transition phase, and the phase will be bumpy for the next two to three years."

-- Amy DiPierro contributed reporting to this story.

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