Apple Music has reversed its payment policy, a day after the singer Taylor Swift said she was refusing to allow the company to stream her album 1989.
In an open letter to Apple, Swift said she was withholding the record as she was unhappy with the three-month free trial offered to subscribers.
Now Apple says it will pay artists for music streamed during trial periods.
"We hear you @taylorswift13 and indie artists. Love, Apple," tweeted executive Eddy @Cue.
Swift had said the plan was "unfair", arguing Apple had the money to cover the cost.
"I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company," the 25-year-old said, describing Apple as one of her "best partners in selling music".
"Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing.
"We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation."
Apple Music launches on 30 June. It will cost $9.99 (£6.30) per month in the US for one person or $14.99 for families.
After hearing news of the company's decision on Sunday night Swift tweeted: "I am elated and relieved. Thank you for your words of support today. They listened to us.''
Mr Cue said he did not know if the Shake It Off singer would now make her album available on Apple Music - but he praised her for taking a stand.
"When I woke up this morning and I saw Taylor's note that she had written, it really solidified that we needed to make a change," he told Associated Press.
The music industry has generally supported the company bringing its vast music library to paid streaming, and the firm said it would pay 73% of the music subscription revenue to music owners.
Speaking to Billboard magazine Cue said they had already been been hearing "a lot of concern from indie artists about not getting paid during the three-month trial period" before Swift spoke out. But he said "we never looked at it as not paying them".
"We had originally negotiated these deals based on paying them a higher royalty rate on an ongoing basis to compensate for this brief time", he said.
They will now pay artists during the trial period and "also keep the royalty rate at the higher rate."
He said he spoke to Swift himself to let her know they were making the changes and "she was thrilled and very thankful".
Calvin Harris, the Scottish DJ understood to be Swift's current boyfriend, has also commented on Apple's decision.
"I just played a gig inside a giant owl and my girl just changed the entire music industry," he tweeted. "What a day."
Others who have commented include Radio 3's Clemency Burton-Hill, who said Apple's volte face was "good for all musicians".
"Well done @taylorswift13 for standing up for artists - and well done Apple for listening," tweeted Sir Richard Branson, founder of the Virgin empire.
Swift's apparent sway with the tech giant has also generated a slew of light-hearted responses, with many asking the singer to use her clout to have various Apple-related oversights rectified.
The Incorporated Society of Musicians, the musicians' professional body, welcomed the news. But Deborah Annetts, its chief executive, said more needed to be done for musicians.
"It is great news that Apple has reversed its payment policy and will now pay artists for music streamed during trial periods; huge congratulations to Taylor Swift, for quite rightly defending her rights as an artist," she said.
"With the launch of Apple Music it is wonderful that more people have access to an ever expanding catalogue of music.
"But the fact remains that this service is not giving musicians, many of whom are session artists or non-featured artists, any new rights. And worse still, it will pay them virtually nothing."
It is not the first time Swift has spoken out against streaming music - she pulled her entire catalogue from Spotify last November and had refused to offer 1989 on streaming services, saying the business had "shrunk the numbers of paid album sales drastically".
She explained to Yahoo Music why she pulled her music from Spotify: "I'm not willing to contribute my life's work to an experiment that I don't feel fairly compensates the writers, producers, artists, and creators of this music."
If you find a Swift song now on Spotify it will only be from a compilation album.
1989 went on to become one of the biggest-selling albums of 2014 and has sold more than 4.9 million copies in the US alone.
Last week, UK-based independent record label Beggars echoed Swift's comments, saying it struggled "to see why rights owners and artists should bear this aspect of Apple's customer acquisition costs".
It said it did not have an agreement with Apple that would allow it to participate in the new service but hoped the "obstacles to agreement can be removed" in the coming days.