September 22, 2023
Music Industry

Apple Wants to Reduce the Royalty Rate It Pays for Music

All the streaming services have to pay for the privilege of using someone’s copyrighted work for their business model. But not all streamers pay the same. Spotify, for example, pays out 52% of all its revenue in royalties, down from the 55% it had to pay during its last licensing period. The reduction saved money-hemorrhaging Spotify about $100,000,000 USD annually. And when you just reported a loss of half a billion dollars, that’s a big deal. And since Spotify is now officially too big to fail–with over 50 million paying subscribers, the labels are making the majority of their money from streaming now–this was seen as a prudent move by rightsholders.

Apple would like the same consideration. Unlike Spotify, there’s more to it than just supplying streaming music, so they can afford to subsidize Apple Music. But that doesn’t mean that they should.

Apple Music’s long-term licensing deals expire at the end of this month, so it’s time to renegotiate. Since Apple Music is the #2 streamer in the world (27 million paid subscribers at last count–and growing nicely), rightsholders want it to survive, too. And Apple Music has been paying a 58% royalty this whole time, a full 3% more (and hundreds of millions of dollars more) than Spotify was in its last licensing term.

Artists will no doubt complain about potentially getting even smaller streaming cheques, but their fight is with the people at the labels, copyright boards and publishers, not with the streamers.

More at MBW.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 40+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

Alan Cross has 37091 posts and counting. See all posts by Alan Cross

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