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Apple Will Pay More To Streaming Music Producers Than Spotify -- But Not Yet

Posted by timothy on from the first-three-are-free dept.

Reader journovampire supplies a link to Music Business Worldwide (based on a re/code report) that says Apple's new Apple Music service, after a trial period during which the company has refused to pay royalties, is expected to pay a bit more than 70 percent of its subscription revenue out to the companies supplying it, rather than the 58 percent that some in the music industry had feared. Notes journovampire: "If 13% of iOS device users in the world paid $9.99-per-month for Apple Music, it would generate more cash each year than the entire recorded music biz manages right now."

13 of 141 comments (clear)

  1. 0x4650 by gnupun · · Score: 3, Interesting

    Suppose a subscriber does not listen to any music for one month and still pays $9.99. How will Apple distribute the 70-80% proceeds of the $9.99 to the copyright holders?

    1. Re:0x4650 by TheMegaLoser · · Score: 4, Interesting

      Without knowing: All money goes into the same pot and gets divided per what's listened to totally. There's no point in doing it per user.

    2. Re:0x4650 by Imazalil · · Score: 5, Interesting

      I'm guessing that the money would still go to the record companies who would just keep for themselves.

      I do hope that Apple has it worked out that this doesn't happen. Not that I want Apple to sit on an even bigger pile of cash, just if musicians aren't going to get the money, I don't want it to go to the record companies.

    3. Re:0x4650 by AmiMoJo · · Score: 4, Interesting

      They will do what everyone else does. Pay based on total plays for all users, give the money to the recording industry bodies responsible for distribution in each country, and let them handle it. It's a huge scam because to actually get on a streaming service and get paid you have to sign up with a record label that is a member of the local distribution body, you can't just go to Spotify and get paid directly.

      That's why YouTube is a more interesting platform for most musicians. You can get paid just by having a bank account, you don't need to be with a record label. It's a shame Google's music streaming service isn't the same.

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  2. 13%?? Keep dreaming by master_kaos · · Score: 3, Insightful

    Between family share plans, people who have multiple devices, and people who have zero interest in apples streaming platform, there is no way they will get a 13% paid subscription rate.

  3. Not for me... by Lumpy · · Score: 3, Insightful

    I refuse to pay for any service that rewards the scum that is the record industry. Free services only for me or my own music ripped off of used CD's.

    I am the record industry's worst nightmare, someone that buys CD's but only second hand. It's the best way to steal from them.

    --
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    1. Re:Not for me... by N1AK · · Score: 3, Insightful

      I think you're giving yourself too much credit. Who sells CDs second hand: People who buy CDs, including people who buy them new; and what do they do with the money raised by selling music... at least partly use it to purchase new music.

      You're the music industries worse nightmare in the same way the guy who buys 2nd hand cars, and indirectly keeps the new car and trade-in markets going, is Ford's worst nightmare: In. No. Way. At. All.

  4. Re:Where does the 13% come from by Anonymous Coward · · Score: 3, Funny

    Yeah I don't get it either. I mean YOU have Amazon Prime, therefore EVERYONE must have Amazon Prime! What was Apple thinking??? They should have just asked you!

  5. ...the company refused to pay royalties... by xxxJonBoyxxx · · Score: 3, Insightful

    >> ... a trial period during which the company has refused to pay royalties...

    How, exactly, did they get away with millions of unpaid plays that at the same time we're reading a story about the royalty police going after a mom-and-pop restaurant for a song or two?

    1. Re:...the company refused to pay royalties... by nine-times · · Score: 4, Informative

      Because they negotiated it in advance. It's not really that Apple "refused to pay royalties", but that they negotiated licensing terms such that they aren't required to pay royalties under specific circumstances.

      The summary is poorly worded.

  6. That's my problem by quantaman · · Score: 4, Insightful

    "If 13% of iOS device users in the world paid $9.99-per-month for Apple Music, it would generate more cash each year than the entire recorded music biz manages right now."

    I sure as hell don't purchase $120 in music per year, even when the CD was king I doubt many ever did.

    So why do they suddenly expect us all to start spending as much on music as the most vociferous consumers?

    $3-5 monthly, $36-60 per year, that's a price point where subscription services start making sense to me.

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    1. Re: That's my problem by AvitarX · · Score: 3, Informative

      The subscription services are worth about double or triple what I used to spend on music.

      The "radio" (hand picked, and automatic), and the music exploration features additionally have value.

      I used to spend about $5/month for music (from ages 23 -30 or so, before then it was more, since then, subscription service, also more), I happily pay $10 for the subscription.

      It seems unlikely they'll go much lower, unless they cut deals with the cell phone carriers or some such, though I suspect you could be correct, the optimum price could be a little bit lower (or higher too, I'd guess).

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  7. Re:Wait a fucking minute. by nine-times · · Score: 4, Informative

    When they say, Apple "refused to pay royalties", they're giving a false impression that Apple is supposed to pay royalties, but they refused. In fact, they negotiated a deal with record labels so that they wouldn't have to pay royalties during their "free trial" period. Customers aren't paying Apple during that period, and Apple isn't going to pay record labels, but that was all negotiated with record labels in advance.