“Apple Inc. is seeking to reduce record labels’ share of revenue from streaming, part of negotiations to revise the iPhone maker’s overall relationship with the music industry, according to people familiar with the matter,” Lucas Shaw and Alex Webb report for Bloomberg.
“The talks cover Apple’s agreements for Apple Music, the two-year-old streaming service offering millions of songs on demand, and iTunes, the store where people can buy individual songs or albums,” Shaw and Webb report. “The record labels’ deals with Apple expire at the end of June, though they are likely to be extended if the parties can’t agree on new terms by then, said the people, who asked not to be identified discussing private information.”
“Under Apple’s current deal, record labels at first received about 58 percent of revenue from Apple Music subscribers, a higher cut than from other major streaming services including Spotify,” Shaw and Webb report. “Spotify reduced its rate to 52 percent from 55 percent in recent negotiations with labels, tied to certain guarantees on subscriber growth. The labels are open to a reduction in Apple’s rate — provided it’s also able to expand subscriber rolls and meet other requirements, the people said.”
Read more in the full article here.
MacDailyNews Take: Apple should get a better rate than Spotify simply because Apple product users offer the music industry entry into a significantly richer demographic who are easily more likely to go on to buy music, merch, and concert tickets.
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