“Apple will fork over between $100 million and $150 million in advanced payments to the four major music labels in order to get its iCloud off the ground, three separate sources told The Post,” Claire Atkinson reports for The New York Post.
“The Cupertino, Calif., tech giant has agreed to pay the labels between $25 million to $50 million each, as an incentive to get on board, depending on how many tracks consumers are storing,” Atkinson reports. “The size of the advance payments have been a major hold-up for Google, which had been negotiating with the music companies and now will likely have to pony up higher fees to get a rival cloud service into action, said music industry sources.”
Atkinson reports, “One executive explained that the cloud service will initially be free to people who bought their music from Apple’s iTunes store, but Apple is said to be considering a $25 a year charge in the future.”
Read more in the full article here.
[Attribution: CBS News. Thanks to MacDailyNews Reader “GetMeOnTop” for the heads up.]
Peanuts.. especially considering MS payed 8 BILLION for a free internet service 😉
$8.6 Billion, or $150 Million.
– Gee, I wonder which investment will produce the greatest return?
Which Steve is the visionary?
Will Steve Ballmer show himself to be a master strategist, and will Steve Jobs take to dancing around a stage, sweating profusely while shouting, “Developers! Developers! Developers! Developers! …” ?
Questions. Questions. …
Maybe so, maybe not: New York Post is quite a yellow/tabloid journalism paper.
Correction: New York Post is quite a yellow/tabloid
journalismpaper.yeah, flip on FOX news for the real story! Job is a fucking liberal!!!! No iPhones have actually been sold!!!
Fucking NYT and their facts. Asssholes
Wait, the label companies take $150 million for doing what??…
For being owners of music they did not create.
For being owners of music they *helped* create. Just like movie executives (which includes Steve Jobs), vision and finances are an integral part of the process. Jobs had little to no involvement in Pixar, but he still got rich(er) off of it because ge had the vision of what it could be if properly funded. I don’t understand why more people don’t get this.
No. I understand it completely. I just have a strong distaste for how it works, so I throw a negative spin on it. A band is found by either recommendation or just someone scouting or myspace. Label asks them to sign and they will get a tour bus, tons of publicity, a producer to record the album and printing of the album…all they have to do is sign the contract and make some music. And thats where the pie in the sky ends. After that, you find out you have no ownership of the music, you have to put out another album in 5 months, and you get 10 cents off each CD you sell, so to help make ends meet you tour tour tour and get tired. Is it the bands fault for signing this? Sure. Is it misleading that the labels put this all in fine print. SURE. But, this is why people say the music business sucks. And to make everything worst, when all is said and done…only a few artists that make creative music ever make it.
“No. I understand it completely. I just have a strong distaste for how it works, so I throw a negative spin on it.” lol, quote of the day!! Saved for future reference 😀
Musicians are easy prey for the suits that run the labels! Rich taking advantage of the poor and idealistic. In the end true talent makes money though.
I just wish more of the money made from this deal would go the the artists that created the content/music but, alas, it’ll probably not end up that way and just line the pockets of executives.
If it’s limited to syncing music that was purchased from the iTunes store, it will be a truly worthless flop. I would gladly pay money to use it to “store” and sync my own tracks— over 100GB worth, mostly ripped from CDs or purchased from all kinds of sources. That’s too big a collection to store on any one device, and managing it into sections on different devices is a real pain, so I would love to be able to store it all in the cloud and access from anywhere I can get a signal. But if their licenses don’t let me store stuff that wasn’t purchased at iTunes… again, worthless and a truly Microsoftian style move. I hope to God this is one rumor that isn’t true!
If it doesn’t include music from CDs and Amazon, for instance, it’s The Labels, not Apple or Steve Jobs, that deserves the blame.
I believe that’s the purpose behind the 150 million dollar ‘bribe’
Not at all. If that happens, it will be Apples fault for not paying the price necessary to offer a valuable service rather than a POS. Hopefully muad’dib’s right that this is what the $150M was for and we won’t have to worry about it.
$2 a month, not bad for the security of not having to back up my music to my Mac, nor having to use precious space on all my iDevices.
Pocket change.
Jobs at Pixar is a great example where an executive’s vision, drive and savvy made a new art form possible, and helped it to thrive.
Can you think of a similar example in the music business?
Barry Gordy
Phil Specter (“Wall of Sound”) before he went off the deep end.
When you have over $50 Billion in savings – give or take a couple of bucks – $150 million is a very small amount to pay. The upside of this deal is ginormous and when all is said and done this investment will probably be seen as a steal for Apple. Nicely done.
Maybe because making a movie inherently involves a lot of capital, while there is a limit to how much money one can usefully blow on producing a sound recording. Studios typically invest nothing in musicians’ early development, equipment purchases, and so forth. They swoop in once the instruments are bought and learned, the early songs are written, and often after an initial few perfectly-good-sounding records have been recorded for $10 or $20K or less by the bands themselves or an indie label. Then, in some cases, the big labels might invest in fancier recording for the next few albums, some advertising, and a tour bus; but I’m not at all sure it’s fair to say that is “helping create” music in the way as investors create movies. Many musicians’ best work is created before they are even signed, and who’s to say that a distribution system not involving big labels wouldn’t produce just as much quality music (if not as many dubiously talented, advertising-fuelled mega-superstars).
Considering that iTunes Store has been open for business for over 8 years, and that over 10 billion tracks have been sold, even if iCloud becomes available only to those purchases, it will be pretty big, considering that one out of three dollars spent on music today is done on iTunes Store.
As for the difference between movie studios and music labels, even though some of these run both businesses (Sony, Warner, Universal), there is a fundamental difference between the two. Movie studios put up a lot of money upfront and take a risk, not always knowing if the movie will succeed or fail. Music labels practically NEVER put any money upfront for an artist. They send their A&T (Artist & Repertoire) people to look for acts that usually already more than full album’s worth of songs on a decent quality demo CD. When the band gets signed, the only money label would spend is on releasing that CD (some advertising and tour promotion). By far the worst part of it all is, in most cases, the contract will guarantee them a full return on all that money; the band won’t get paid a single dime on royalties for their songs until ALL the investment that label made is paid of. Once the label gets the money back, it will begin to SHARE the revenue from the concert tickets and music sales, but even then, the band’s share in that revenue is usually significantly smaller.
The only time a music label might invest their own money into an act is when they design their own synthetic act (boy bands, girl bands, teen pop stars) for a very specific market, usually with a fairly short shelf life, but with massive back-end merchandising (lunch boxes, beach towels, school supplies, etc).
Film studios take risks and often lose money. Music labels are money-grubbing parasites that bring NOTHING to the world of music.
Thought A&T stood for Artists & Talent…
I am really surprised that bands are still signing up with major labels these days. Recording and distribution is available to individual musicians more than ever. Makes me consider the possibility that regardless of how nasty the music labels are, they must bring something to the party. I don’t know what it is, but those that want to take grab at the brass rings seem to still do it via the major labels. You would think a new model would have taken root by now if there was a better path. Just wondering here.
Two impassioned pieces by Fredo and Predrag.
So why do bands sign up? There is no monopoly, ask the Arctic Monkeys. Why do they sign up?
I knew that 150MiL that Bill “lent” Steve in 97 would come in handy.
Pure genius. The storage space needed for every user to store tunes previously purchased from iTunes – zero! All the tunes are already stored in the cloud, they can simply dish them out again upon request. I don’t see millions of copies of the same track, they will just hold one copy, the same copy they already hold.
Gotta love Jobs
I hope they’re wrong about the fee.