Apple's crisis management tutorial, courtesy of Taylor Swift

Apple turned a PR crisis involving pop star Taylor Swift into incredible advertising for its new music streaming service.

Image: CBS News

It's never a good thing when one of the world's biggest celebrities writes a 500-word criticism of your big new product a week before it hits the market.

But that's what Apple dealt with on Father's Day Sunday when pop star Taylor Swift wrote an open letter on her website criticizing Apple over a fairly obscure compensation agreement for artists with music on Apple's new streaming music service, scheduled to launch Tuesday, June 30, 2015.

Apple, with unusual speed, responded to Swift's missive and publicly reversed course -- and, as a hugely added bonus, both Apple and Swift got a ton of free publicity. Here's what happened.

Image: Apple

At WWDC earlier this month, Apple unveiled its new streaming music service based on tech it acquired from Beats last year. At $10 per month, Apple Music's pricing is nearly identical to similar streaming music services like Spotify.

But, two major differentiators for the service (aside from being pre-installed on hundreds of millions of iOS devices) are the lack of a free tier -- Spotify offers access to its full library with a few restrictions -- and offering a three-month trial instead of the one month industry standard. This free trial is key, and the main reason for Swift's message.

Originally, artists and record companies were to receive no revenue during the three-month trial, no matter how many users Apple signed up. This was supposed to have been addressed in the original deal Apple made with record companies.

Labels would receive 71.5% of Apple Music revenue for distribution between themselves, songwriters, artists, and other such parties. This is a minor increase over the 70% that other services pay, and the idea was for this increase to offset the cost of the three-month trial.

Swift didn't see it that way, and, given her stature in the music business (and the fact that she controls her own music, unlike most artists) she spoke out:

These are not the complaints of a spoiled, petulant child. These are the echoed sentiments of every artist, writer and producer in my social circles who are afraid to speak up publicly because we admire and respect Apple so much. We simply do not respect this particular call.

She pointed out that "three months is a long time to go unpaid" and said that since musicians don't ask Apple for free iPhones, they shouldn't be asked to provide their music for no compensation. The plea received a huge amount of media attention across the tech and mainstream media, especially since the missive was posted early on Father's Day.

But, Apple saw the growing backlash (many agreed with Swift) and responded quickly. Sunday evening, Apple Music chief Eddy Cue posted on Twitter that Apple would pay artists for streaming music even during the three-month trials.

According to Re/Code's Peter Kafka, who spoke to Cue on Sunday night, Apple will pay rights holders on a per-stream basis (since they can't share revenue that doesn't exist). He said that Cook and Cue discussed the matter because of Swift's letter along with complaints that the company had received privately from indie labels and other artists.

It's unclear if Swift's latest album, 1989, which notably does not appear on Spotify's paid or free tiers, would now make it to Apple Music.

The more cynical amongst us may think that this was all just a big marketing ploy to get both Swift and Apple Music a ton of free publicity. I don't think it was intentional, but, like so many things with both Swift and Apple, the press just can't stay away.

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