More than 70% of Apple Music revenues passed to rights owners, Apple confirms

Posted:
in iPod + iTunes + AppleTV edited June 2015
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 --?now known as Apple Music radio --?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.
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Comments

  • Reply 1 of 77
    gatorguygatorguy Posts: 21,119member
    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]
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  • Reply 2 of 77
    jbdragonjbdragon Posts: 2,173member
    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.
  • Reply 3 of 77
    gatorguygatorguy Posts: 21,119member
    sog35 wrote: »
    I hope AppleMusic brings an end to free streaming with ads.

    Musicians deserve a decent cut and with free streaming they get basically zero.
    Apple will still offer a free tier supported by ads.
  • Reply 4 of 77
    bobjohnsonbobjohnson Posts: 154member
    Quote:

    Originally Posted by Gatorguy View Post



    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.

  • Reply 5 of 77
    MacProMacPro Posts: 18,373member
    jbdragon wrote: »
    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.

    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.
  • Reply 6 of 77
    schlackschlack Posts: 700member
    In the beginning of the streaming phenomenon with Spotify/etc it was easy to justify $10/month for the service. Now with all the free/ad supported services available, albeit with certain limitations, it's harder to justify $10/month for the differential in service. I'm still paying $10/month, but the case for payment would be higher without the free tier.
  • Reply 7 of 77
    genovellegenovelle Posts: 978member
    gatorguy wrote: »
    Apple will still offer a free tier supported by ads.

    Only in the radio sections which don't allow you to use the music as if you bought and downloaded it. Big difference. Like TV and Radio you watch or listen to what they say when they say.
  • Reply 8 of 77
    maestro64maestro64 Posts: 4,658member
    jbdragon wrote: »
    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.

    I agree the lables get most of the money, since we know most artist has to sign away most of the royalities from sales to get a lable to rep them. Most artist make most of their money from live performances.

    However, I think Apple said Apple Music service will allow artist without a record label if they is true then actually actist will make most of the money. WIth Itunes Apple was bared from letting independents (non-record Lable) from selling on Itune. This was one of the consensions Apple had to do to get the Record lable signed on.
  • Reply 9 of 77
    Launches June 30. That's why Apple Music was announced during the WWDC keynote. So much for the hand-wringers who decried the supposed inappropriateness of a music service announcement during a developer conference. It was ready to go, and WWDC was a big press event in June.
  • Reply 10 of 77
    gatorguygatorguy Posts: 21,119member
    They pay absolutely no royalties whatsoever during the free introductory period? Nada? It's not really costing Apple anything for three free months which is quite the accomplishment. So that was the tough bargain they wanted.
  • Reply 11 of 77
    rogifanrogifan Posts: 10,669member
    sog35 wrote: »
    I hope AppleMusic brings an end to free streaming with ads.

    Musicians deserve a decent cut and with free streaming they get basically zero.

    Sorry the free with ads model is out of the bottle and not even Apple will be able to put it back in. If someone can get Spotify free with ads they're not going to pay Apple $10 a month. The music industry needs to get into the 21st-century and find other ways for monetization.
  • Reply 12 of 77
    gatorguygatorguy Posts: 21,119member
    sog35 wrote: »
    the free versions are basically internet radio.  You cant select specific songs you want to listen to or download them.  HUGE difference.

    Face it.  Apple is going to destroy the ad based streaming service.  Sorry Google.

    Google Play Music is subscription only. There is no free ad-supported version. But you're probably correct that Apple is going to destroy all competition.
  • Reply 13 of 77
    calicali Posts: 3,495member
    rogifan wrote: »
    Sorry the free with ads model is out of the bottle and not even Apple will be able to put it back in. If someone can get Spotify free with ads they're not going to pay Apple $10 a month. The music industry needs to get into the 21st-century and find other ways for monetization.

    This is an ignorant/selfish response. I notice non-artists have this "screw your career" attitude.

    I see more artists and labels pulling out of the free tier model. In 10 years don't be surprised if these free services become empty.
  • Reply 14 of 77
    calicali Posts: 3,495member
    sog35 wrote: »
    sorry but Spotify's contract with the labels will expire soon.  You can bet your ass the labels won't allow Spotify to get free streaming if Apple has to pay.

    Apple changed the game.

    Beat me by a few seconds. :p
  • Reply 15 of 77
    chadbagchadbag Posts: 1,100member
    Quote:

    Originally Posted by Maestro64 View Post



    However, I think Apple said Apple Music service will allow artist without a record label if they is true then actually actist will make most of the money. WIth Itunes Apple was bared from letting independents (non-record Lable) from selling on Itune. This was one of the consensions Apple had to do to get the Record lable signed on.

     

    Independent and label less people can sell their stuff on iTunes.  I have a friend who has two albums for sale on iTunes right now.

  • Reply 16 of 77
    rogifanrogifan Posts: 10,669member
    sog35 wrote: »
    the free versions are basically internet radio.  You cant select specific songs you want to listen to or download them.  HUGE difference.

    Face it.  Apple is going to destroy the ad based streaming service.  Sorry Google.

    I think its Apple's crusade to wreck ad-based companies.  Soon iOS will have adblock which will destroy scummy companies to who rely on popup ads to make money.

    No they won't. Look at the App Store. The most downloaded apps are free or freemium. People have shown that they're perfectly fine with an ad-based model if it doesn't cost them anything monetarily. And Apple can't destroy the competition in this space because if they do the EU and DOJ will be all over them like a bad rash.

    I think you're in fantasyland if you think people who are currently using Spotify for free will start paying Apple $10 a month. The stupid Beats 1 radio station is part of the free tier. So people are going to migrate to paid because of Taylor Swift or the stupid Ping 2.0 feature? Haha thanks for my morning laugh.
  • Reply 17 of 77
    rogifanrogifan Posts: 10,669member
    cali wrote: »
    This is an ignorant/selfish response. I notice non-artists have this "screw your career" attitude.

    I see more artists and labels pulling out of the free tier model. In 10 years don't be surprised if these free services become empty.

    Paid streaming isn't going to save the recording industry. Artist can do that but there just screwing themselves in the long run. They need to figure out other ways to make their money like concerts and merchandizing.
  • Reply 18 of 77
    rogifanrogifan Posts: 10,669member
    sog35 wrote: »
    sorry but Spotify's contract with the labels will expire soon.  You can bet your ass the labels won't allow Spotify to get free streaming if Apple has to pay.

    Apple changed the game.

    Well then they're just screwing themselves. They can take away the free with ads model but they're not going to convert all those people into paying customers. People will just go to YouTube or go back to pirating music.
  • Reply 19 of 77
    dasanman69dasanman69 Posts: 12,985member
    gatorguy wrote: »
    sog35 wrote: »
    the free versions are basically internet radio.  You cant select specific songs you want to listen to or download them.  HUGE difference.

    Face it.  Apple is going to destroy the ad based streaming service.  Sorry Google.

    Google Play Music is subscription only. There is no free ad-supported version. But you're probably correct that Apple is going to destroy all competition.

    Why does that fact escape everyone?
  • Reply 20 of 77

    I can't wait to sign up for this. iTunes Radio never made it to Canada, so I never got a chance to try it out.

     

    But with a virtually unlimited selection of music I can play whenever I want (for all members of my family) at $14.99 a month it's a no-brainer. The 24hr radio stations and curated playlists are simply frosting on the cake for me.

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