“Apple Inc. has secured a deal for songs from Warner Music Group, the technology giant’s first agreement with a major label since introducing its on-demand music service two years ago, according to people familiar with the matter,” Lucas Shaw and Alex Webb report for Bloomberg News. “Apple plans to pay record labels a smaller percentage of sales from Apple Music subscribers than it did under its first deal for the streaming service, the people said, asking not to be identified discussing private information.”
“Large technology companies and music rights holders are establishing a framework this year for how to share proceeds from on-demand streaming, now the dominant source of sales for the record business in the U.S. Music rights holders are willing to accept a slightly smaller share of the sales from on-demand services, provided those services continue to sign up paying subscribers at a high rate,” Shaw and Webb report. “Paid streaming was still a fledgling business when the company signed its initial deal, and it was willing to lose a little extra money because the service was intended to boost sales of the iPhone.”
“Apple has been paying labels 58 percent of sales, a higher rate than Spotify pays. Apple also traditionally granted publishers a higher rate than its Swedish rival. Apple is now considering giving labels a cut of 55 percent, which would decrease if subscriber numbers met targets,” Shaw and Webb report. “Sony Music Entertainment, owner of the second-largest record label, is also on the verge of a deal with Apple, one of the people said. A deal between Apple and Universal Music Group, owner of the top label, is further off.”
Read more in the full article here.
MacDailyNews Take: With no free ad-supported tier, the labels love Apple vs. their outmoded, under-matched rivals who are giving away the store. Plus, Apple saved the music industry, too, so there’s that.
Musicians and the music industry undermine themselves by allowing their music to be streamed by “free,” ad-supported outfits. – MacDailyNews, December 17, 2015
That is nice and good with music, how about movies, what are the big labels like Warner, Sony and others bringing to the table? A deal is needed with the movies that is a win win for everyone. Looks like Eddy Cue been busy then 🙂
The big difference with movies is that there isn’t an ad-supported movie streaming service providing the latest movies free to customers, so the movie industry doesn’t feel that they have to compromise. They hope to keep on ripping off their customers for as long as they possibly can.
Apple is aware of this and hasn’t been able to negotiate access to blockbuster movies on terms that Apple regards as fair for customers and the content owners. Apple’s plans to start creating it’s own content is part of a strategy to break that stranglehold and get a better selection of movies at sensible prices onto Apple devices.
i dont mean Free movies or ads, i am talking about movies in Amazon and Netflix, they are much more reasonable then movies on iTunes.
Let’s hope Apple can generate some hits in their video portfolio that other people want to pay for to provide their customers.
I think Apple Music is great and it’ll be a mainstay for a long while in my home and on my devices….but Apple could stand to make improvements. I also use Tidal – which sounds better with its lossless tracks, and Slacker – which is just simply amazing in picking music. My wife likes Soundcloud a good deal but I’ve not bothered with it personally. Apple Music is good, but it’s not best in many areas still (and maybe never will be).
I’d love to see Apple spend some of its capital on passing lossless files through Apple Music (likely would require greater capacity for it’s internet services) and for sale on iTunes.