There’s been a fair amount of speculation about how independent labels and artists will handle negotiations with Apple Music’s new on-demand steaming service. SoundCloud recently established a licensing deal with Merlin, a company that represents smaller independent companies in digital matters like this, but had Apple Music secured such an agreement? Gossip surrounding the negotiations was popping up all over the web, so today Beggars Group — the label collective including 4AD, Matador, Rough Trade, XL, and others — issued an official statement about the situation. According to their open letter, Beggars is indeed deeply concerned about Apple’s plan to not pay royalties during Apple Month’s three-month free trial period and has yet to come to an agreement with Apple. Read the full letter below.

To Beggars Group Labels Artists and Managers:

We thought it was time to update you on the situation with Apple Music, following speculation in the press, some of it ill-informed. Apple have been a wonderful partner for the last decade, and we confidently trust they will continue to be so. We have recently been in discussions with Apple Music about proposed terms for their new service. In many ways the deal structure is very progressive, but unfortunately it was created without reference to us, or as far as we know any independents, and as such unsurprisingly presents problems for us, and for our coming artist releases. We are naturally very concerned, especially for artists releasing new albums in the next three months, that all streaming on the new service will be unremunerated until the end of September. Whilst we understand the logic of their proposal and their aim to introduce a subscription-only service, we struggle to see why rights owners and artists should bear this aspect of Apple’s customer acquisition costs.

And given the natural response of competing digital services to offer comparable terms, we fear that the free trial aspect, far from moving the industry away from freemium services – a model we support – is only resulting in taking the “mium” out of freemium.

We are also naturally concerned, as ever, as to whether we and you are being treated on a level playing field vis a vis the major labels and their artists. Additionally, we have reservations about both commercial and practical aspects of the Artist Connect area. It is a mistake to treat these rights as royalty free, especially in the light of recent licenses with services like Soundcloud.

At the moment we do not have an agreement with Apple Music that would allow us to participate in the new service. However, we very much hope that the obstacles to agreement can be removed, for us and for independent Merlin-member labels as a whole, and that we will be able to fully support this potentially exciting new service in the coming days.