Apple inks iCloud deal with Universal Music; Big Four all on board

“Apple has cut a licensing deal with Universal Music Group that will enable Apple’s online music store to offer songs from the largest of the four top record companies, sources with knowledge of the talks told CNET,” Greg Sandoval reports.

“The agreement means Apple now has the rights to offer recordings from all of the major labels,” Sandoval reports. “In addition, Apple has reached agreements with some of the large music publishers, the sources said.”

Sandoval reports, “Details about the agreements are few, but here’s how the revenue from iCloud song sales will be split, according to the sources: the labels will get 58 percent, and publishers will receive 12 percent. Apple will take 30 percent. Streaming will not be available on Monday but will be offered soon, the sources said. They added that an Apple digital locker will store only music purchased at iTunes. The company is said to have plans to store songs acquired from outside iTunes sometime in the future.”

Read more in the full article here.

Ben Sisario reports for The New York Times, “Unlike similar cloud music services introduced recently by Amazon and Google, which did not obtain special licenses from labels and publishers, Apple’s system would likely save customers time by instantly scanning their iTunes playlists and matching them to a master library on Apple’s own servers; with Amazon and Google’s services, users must upload each song, which can take many hours.”

Sisario reports, “In addition, Apple’s service is expected to have features like streaming songs in high-quality audio, even if the version a customer owns is lower quality.”

Read more in the full article here.

29 Comments

    1. Artists usually get 10-25% from what labels get (25% is highest ever for the likes of Michael Jackson; others usually get less).

      So 58%*10-25% = 5,8-14,5% — not that much. However, for digital media, there can be better percentages for artist since there is no hassle with physical production and distribution. (But artist better not expect that labels would willingly update contracts to reflect this.)

      1. Where on earth did you get those numbers? I’ve never met a musician who made more that .02 to .05 per album sold, along with having to sign away the rights to profit from their own original songs. Only musicians who have “made it” can garner higher percentages simply because they can fund the process themselves and are not using the majors for anything more than distribution.

        Hold onto you panties folks. If the majors are eager to sign up, it means the consumers (you) and artists are going to lose.

  1. “They added that an Apple digital locker will store only music purchased at iTunes. The company is said to have plans to store songs acquired from outside iTunes sometime in the future.”

    And here come those Apple caveats. iTunes music only? I’m already losing interest.

    Can’t wait to hear about all the other ways Apple will find to screw this up, like charging some ridiculous fee.

    1. I will be glad to use the service. Sure, I have alot of music ripped from CD’s, and many mp3’s from the old days of Napster. Why would anyone expect Apple to have authorization from the labels to stream music not purchased via iTunes?
      How is it any different from calling say, Adobe or any software company, “Hey my HD crashed and I lost my copy of CS, can you let me download it? I swear I bought it legit, even if I don’t have any record of purchasing it.”

    2. You’re an fool if you think Apple holds THAT much sway over the labels to where they can dictate the terms. You must think Apple decided to cripple the initial iTMS with DRM’ed files at 128kbps.

      1. Cloud Music streaming is no game changer, A Netflix video streaming model from Apple is a game changer in many ways. Not only for all the IDevices but to finally cut the cable cord with Apple TV. Tell me again Gordon what the adavantages of music streaming are again. I don’t get it.

        1. I’m not sure I get it – I already have Netflix video streaming on all my iOS devices – via the Netflix app.

          Music streaming is great for people like me who have a HUGE iTunes music library but can’t or don’t want to put all of that on my iPhone/iPad. This way, I have access to my FULL library where I have a 3G or WiFI connection without having the music locally. I personally think that is quite good.

          1. Itunes needs to be competitive on the video front more than the music front. They already do well with music on ITunes, I have netflix on all my apple devices too, it’s the best but where does that leave itunes and their video rental biz. I’m sure Apple has a lot more planned for ICloud than either of us can imagine but I would love to see video streaming part of that model.

    1. The “better” video streaming model is content, content, content. Apple carries new releases on iTunes, Netflix does not. New releases drive about 75% of the home video market.

      Netflix streaming is cheap because the movies and TV shows are old. Netflix is built on a house of cards, because their content costs are growing much faster than revenues. As they venture further into original programming and sign content deals for more recent releases, their $8/month service grows more unsustainable.

  2. I wonder if Apple will let me place my legitimately purchased copy of Dark Side in my DVD player and “authorize.”

    I’ve bought Dark Side about eight times; how about some good karma for that?

  3. 24january1984 makes a good point. I’ve already invested significantly in my music and film collections, there’s no way in hell i’m going to start renting media now. my music will be archived by me, on my machine. i fail to see how streaming services — which by definition are only as good and only as cheap as your wireless network — are better for the savvy consumer in the long run.

    that being said, if kids want to keep paying over and over for the services they don’t need, there will always be companies willing to resell it to them over and over and over. sucker born every minute.

    1. This is NOT a rental service. All the tracks you purchased on iTunes over the past 8 years are yours to keep. All Apple is doing here is giving you cloud storage space that you can use for that music, plus they will let you stream that music to any Apple device that you own.

      This will be an excellent solution for people who have many Apple devices with iTunes libraries. Right now, there is no simple way or me to sync my three Macs at home, plus a Wintel box at work. They all have iTunes, they all have music, my iOS devices are tethered only to ONE of them, and the only way for the others to have the exact same content is if I manually move things around, or by a third-party solution, and even those only work on local networks, so my work PC is still out of sync. This iCloud will be the mother ship, and all othe iTunes libraries will be synching with it.

  4. I really just don’t see the point of the music locker. There are significant data caps, especially on phone networks. And what’s so inconvenient about syncing your iPhone/iPod and your computer?
    Can anyone explain what will be so great about this?

    1. Janice, I understand how sometimes it’s hard to see the benefit of something if you are not in the situation it’s designed to address. If you’ve got 1 iPod and 1 Mac or PC then, no, this might not benefit you. But if you have Predrag’s situation, or if, like me, your household has 3 Macs, 1 iPod, and 1 iPod touch, then this is a big deal. Also, many critics of iOS say that the ecosystem will not truly be mobile until it cuts its tether to the computer, which is what iCloud will do.

  5. One other advantage for multi-device homes. For homes with multiple computers (and iTunes libraries that need to be in sync), the first challenge is to keep all those libraries in sync, so that every computer has the same collection of songs. If this isn’t done, next challenge is what happens when one of those computers is to be upgraded, and that computer happens to be a Windows PC (so no Time Machine migration of old machine). This has always been a serious hassle.

  6. No one has a definitive picture of what this service is all about and yet the clowns on this board have already made up their minds.

    Quick to judge, quick to criticize, before all the facts are known, especially for a service that isn’t even compulsory, are typical traits of those suffering from the I-Me-Mine Syndrome.

  7. In addition to other advantages that you may (or may not) believe are important, this is good for Apple in that the storage capacity of your mobile device is no longer an issue. When you can store your music, video, photos, and other data in the cloud, you no longer have to worry about having 32 or 64 or 128 gigs of flash memory on your iPod Touch or iPhone or iPad. The iPod Classic can be retired. Apple can purchase less flash memory and reduced demand lowers the price, which means it can lower the price of devices, or keep the price the same and increase its margins. Also, reduced cost of flash means that it can move more quickly towards replacing mechanical hard drives in the Mac with solid state drives.

    Sometimes you gotta back away from “what’s in it for me” and look at the bigger picture.

  8. I wish I had a better perspective on this. Here in Sweden it seems everyone and his mother are using Spotify. From 26 people at the office only I and another guy are buying music. All the others are using spotify. I think most people under 40 have a different relation to music than my generation. Their music have a “best before” date which makes owing music irrelevant.

    1. That’s an interesting notion, Sapiens. While the older generation has often been dismissive of the music of the younger, if that younger generation has in the past decade made a sea change and sees music as a disposable item that’s of transitory interest and hence not worth owning…

      If that shift of attitude has happened, though, it might simply reflect an attitude of “Oh well. If I want to have a copy of that again I can just bootleg it”

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