Mikey Campbell
With Apple widely expected to announce a new subscription-based music streaming service at its Worldwide Developers Conference next week, a report on Thursday suggests the company is cutting it close and holding last-minute negotiations with record labels.
According to sources, labels are fighting for a bigger slice of revenues from Apple's forthcoming music product than they currently net from rival services like Spotify, reports Bloomberg.
Talks are ongoing, but the report claims labels want an approximately 60-percent cut of subscription revenue from Apple, substantially more than an estimated going rate of 55 percent for Spotify. Usually, another 15 percent chunk of monthly fees are earmarked for publishers.
Apple is expected to price its streaming product at $10 per month, a price consistent with those charged by well-established competitors. It was previously reported that Apple was driving hard bargains with record labels and content owners in hopes of offering consumers a cheaper alternative, but today's report suggests those talks were fruitless.
As for implementation, sources said the subscription service is to be bundled with a new Music app that also includes music downloads and a revamped iTunes Radio. Elaborating on rumors of exclusive content offerings, the report claims Apple hired professionals to produce behind-the-scenes videos for high-profile musicians. Artists can share these videos, as well as other media, through a built-in social networking feature called Apple Connect.
Recent reports claim Apple's subscription service will coexist with Beats Music, which Apple assimilated as part of a larger $3 billion acquisition of Beats. Once "the kinks" are worked out, Apple will wind down Beats Music and transfer customers over to the new product.
Apple is expected to debut its music service at WWDC next week and AppleInsider will be on the scene with live coverage of the event.
Sponsored Content
Wesley Hilliard
AppleInsider Staff
Andrew Orr
Amber Neely
William Gallagher
43 Comments
Whoever had the bright idea to give away that U2 album should be taken to the woodshed by Tim Cook. [QUOTE]https://twitter.com/eric_analytics/status/605798000665853952 Eric ?@eric_analytics Jun 2 @DJFM01 @neilcybart the U2 free album with Apple was probably the worst decision by Eddy Cue ever I hope it **never** happens again Eric ?@eric_analytics Jun 2 @DJFM01 Apple has nothing. U2 promo was *heavy* setback in recent negotiations with the labels for streaming[/QUOTE]
Whoever had the bright idea to give away that U2 album should be taken to the woodshed by Tim Cook.
Sorry, who the **** is eric, and why should I care what he tweets?
And nice to see you're still beating that dead horse, Rogifan. You know Apple is doing well when giving away a free album is pretty much the worst thing that Apple did in recent memory, and has garnered so much outrage by those desperate to manufacture a controversy. You'd think, after almost a year, people like you would have moved on- but nope.
Sorry, who the **** is eric, and why should I care what he tweets?
And nice to see you're still beating that dead horse, Rogifan. You know Apple is doing well when giving away a free album is pretty much the worst thing that Apple did in recent memory, and has garnered so much outrage by those desperate to manufacture a controversy. You'd think, after almost a year, people like you would have moved on- but nope.
Eric is a Marketing exec at NBC. How senior (or not) he is, I'm not sure. Whether you care what he tweets or not is obviously up to you. I know this because I have him on my Twitter feed.
[quote name="Slurpy" url="/t/186584/apple-record-labels-negotiating-last-minute-streaming-service-terms-days-before-expected-wwdc-launch#post_2731111"] Sorry, who the **** is eric, and why should I care what he tweets? And nice to see you're still beating that dead horse, Rogifan. You know Apple is doing well when giving away a free album is pretty much the worst thing that Apple did in recent memory, and has garnered so much outrage by those desperate to manufacture a controversy. You'd think, after almost a year, people like you would have moved on- but nope. [/quote] He's an NBC exec with connections in the business. I trust he knows what he says. And it's not good if that album giveaway damaged relations with the record companies. It certainly wasn't worth it. What I'd love to know is why negotiations are so difficult. I thought that was one of the reasons for spending $3b on Beats - that Jimmy Iovine was Apple's meal ticket to deals with the record companies.
[quote name="Rogifan" url="/t/186584/apple-record-labels-negotiating-last-minute-streaming-service-terms-days-before-expected-wwdc-launch#post_2731117"] He's an NBC exec with connections in the business. I trust he knows what he says. And it's not good if that album giveaway damaged relations with the record companies. It certainly wasn't worth it. What I'd love to know is why negotiations are so difficult. I thought that was one of the reasons for spending $3b on Beats - that Jimmy Iovine was Apple's meal ticket to deals with the record companies.[/quote] So during Apple negotiations record labels bring up a free U2 album? Pathetic. I see you're still beating the dead horse named Beats. Beats was JUST purchased. They are but a blink in Apple's history. I don't get why people expect Jimmy to close deals with every record label In less than a year. No one bi***es about the other 30 or so companies Apple has bought and hasn't released anything with yet. At least Beats is making Apple profit.* The other 30 or so startups haven't made Apple any. *Beats made 1.5B in 2013.