Apple will pay out more than 70 cents of every dollar it earns from its new streaming music service, the company revealed on Monday, a slight premium over the rates paid by competing services like Spotify.
In the U.S., 71.5 percent of Apple Music subscription revenue will go to labels, songwriters, artists, and other rights holders, iTunes content chief Robert Kondrk told Re/code. That number will rise as high as 73 percent outside of the country.
Crucially, Apple will not pay royalties during the three-month free trial period. This is said to have been a "bone of contention" during negotiations with labels, but Apple won them over by promising a higher overall payout.
Royalty rates for Beats 1 and the revamped iTunes Radio — Â now known as Apple Music radio — Â will be lower, though the exact percentages were not revealed.
Apple revealed its new music service during last week's keynote address at the annual Worldwide Developers Conference, and hopes to win consumers over with the expansive iTunes catalog and exclusive features. Chief among those is Beats 1, a twenty-four-seven worldwide radio channel helmed by former BBC 1 DJ Zane Lowe, HOT 97 host Ebro Darden, and British tastemaker Julie Adenuga.
Apple Music will launch on June 30 for $9.99 per month, or $14.99 per month for a family of up to six people.
77 Comments
That's a great percentage going back to the content owners. Very good Apple! Some others are more miserly. [IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/60052/width/500/height/1000[/IMG] [IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/60053/width/500/height/1000[/IMG]
The artists will continue to complain that they aren't getting any money!!! As normal the labels will keep most of it and nothing changes. At this point, I still don't see myself signing up. I just don't want to pay $10 a month for this service. At $5, ok, at $10, no thanks. I just don't tune into music as much these days as when I was younger. How about a $5 a month for only so many hours per month.
[quote name="sog35" url="/t/186748/more-than-70-of-apple-music-revenues-passed-to-rights-owners-apple-confirms#post_2735718"]I hope AppleMusic brings an end to free streaming with ads. Musicians deserve a decent cut and with free streaming they get basically zero. [/quote] Apple will still offer a free tier supported by ads.
Apple will still offer a free tier supported by ads.
This is only partially true. Beats 1 and the new iTunes Radio will be available in an ad-supported free tier, but the actual Spotify-ish streaming part will not.
[quote name="JBDragon" url="/t/186748/more-than-70-of-apple-music-revenues-passed-to-rights-owners-apple-confirms#post_2735713"]The artists will continue to complain that they aren't getting any money!!! As normal the labels will keep most of it and nothing changes. At this point, I still don't see myself signing up. I just don't want to pay $10 a month for this service. At $5, ok, at $10, no thanks. I just don't tune into music as much these days as when I was younger. How about a $5 a month for only so many hours per month.[/quote] The paradigm shift will be when more and more artists deal directly with the Apple model, that is those who haven't already sold their souls to a record label for an up front sum but a tiny percentage going forward, as is so often the case sadly.