Apple Music Pays Industry Standard Subscription Revenue Fees to Record Labels

[elmateo487]

But many of us don't limit our tastes to one genre. We open ourselves up to other styles of music. I think this actually aids discovery. If people only listen to one genre a piece, well it gets boring after awhile and I think the mixing of genres and genre bending helps with creativity as a whole.

I am not saying limit yourself. But have some passion for music! Not just "shuffle all" on thousands and thousands of songs. I am saying that no one I talk too can even have a conversation about music. They can rattle off the most recent band that came on their random spotify playlist. But that's it!

Listening to all genres on random is not the same as exploring every genre

 

[AdonisSMU]

I am not saying limit yourself. But have some passion for music! Not just "shuffle all" on thousands and thousands of songs. I am saying that no one I talk too can even have a conversation about music. They can rattle off the most recent band that came on their random spotify playlist. But that's it!

Listening to all genres on random is not the same as exploring every genre

I listen for the song and not the genre. That's just me though. I post in tech boards and music boards and sometimes body building boards. I guess the point is that if people want it they will listen to it. I think the market can work these things out to some extent. I think that music has gotten too safe and that's why it's not as exciting as it seemed to be in years past. Artists need to stir the pot a bit. Everything is so sanitized because everyone is afraid of offending. I'm not saying make some hate music but music needs to stir the pot a bit to keep things fresh. It needs to be polarizing and political. This keeps people interested.

 

[McCool71]

How long before record labels are irrelevant?

Artists and publishing companies must be looking at that 58% cut the labels are getting and wondering why they don't just go direct to Apple and Spotify to distribute their content.

Artists have been able to do just that for quite a few years now. Still very few do it.

The main reason is of course that they then have to pay for the whole recording process themselves up front. This is the single most important thing record companies has offered artists they believe in since the beginning of time.

Just like in any other business the one who takes the biggest economical risk also wants the biggest payback. Don't forget that even in the golden age of CD-sales the vast majority of releases flopped and never made back the investment.

A huge amount of what we today consider classic albums would never ever have existed if no-one had stepped in with money and know-how to get it from idea and homemade demos to finished albums. There is so much more to recording a well-sounding album that people like listening to than showing up with your gitar and a bunch of lyrics.

 

[thelookingglass]

Are you guys active listeners or passive listeners? I don't listen to music 24 hours a day, but when I listen, I listen.

Passive. It's usually just background music.

 

[McCool71]

Someone who is dedicated can produce, mix and master studio quality in their bedroom with a laptop and logic X.

That is so wrong on all levels.

Producers, sound technicians, studio musicians (if you don't play all instruments yourself), good acoustics and microphones, a wide selection of instruments to get the sound you really want and so on are important factors in making the final product sound great.

I am not saying that someone can't do it themselves - of course they can. I am saying that the result probably would be very far from what the listeners actually expect from a professional recording.

There is a reason that few - if any (I can't really think of anyone) - homemade recordings like that have made any waves to speak of the last 10 years.

 

[McCool71]

Are you guys active listeners or passive listeners? I don't listen to music 24 hours a day, but when I listen, I listen.

I am one of those that almost always listen to the lyrics when I listen to music. Actually to a point where I find it hard to read 'heavier' stuff like books at the same time unless the music is instrumental or something I have heard lots of times before.

I love actually listening, I rarely use music as background noise like a lot of people do.

Used to really enjoy reading the whole CD-booklet (not just lyrics, but also producing credits, backup singers, where it was recorded and all details like that) while listening to an album for the first time back in the 80s and 90s. It is one of the things I miss a lot about the digital age - one tends to not get the same connection with the material as when physical media was the only option.

 

[a0me]

Labels are dinosaurs, artists do not need them.. Excuse me.. real artists do not need them. Real artists put time and effort into what they do. Anyone who has half a brain could release a cd these days and tour off that.

I'm not a big fan of recording companies and labels either, but recording, marketing, distributing your music and going out on tour require skills and money, which someone has to provide. Unless you have the time, knowledge and money to do that on your own, you'll likely need the help of big bad labels.

 

[Dominicanyor]

Everything sounds pretty good. The only thing is that people will be paying for music that they can't own..

 

[X--X]

Canada and 99 other countries, yes.

There is exactly 0% chance that Apple Music is going to start in 100 countries.

It's gonna be a handful of countries at most.

 

[Michael CM1]

I'm happy this is cleared up. I do think artists should be compensated for his work adequately. People think it's just the artists...but there are all the people besides the guy singing the song who deserve to be paid. There is the janitor who maintains the studio and the array of people who are involved in producing a single track like musicians and song writers and then there are promotional costs as well. Artists who are rich are generally loaded up because they have many many hits or they are producing for other artists or they are touring and have other avenues for revenue generation.

I work at a newspaper and want to hug Taylor Swift now for a whole new reason. I've seen the whining and complaining on here about apps that are at least decent and took some time to produce costing someone 99 cents and it being some sort of ripoff. Then there's also the devil's work of an app that costs money AND has advertising. THE HORROR OF THE CABLE TELEVISION MODEL.

You know how much readership/viewership/audience/whatever it takes to totally survive on advertising? Not even broadcast networks do it anymore because they get fees from cable and satellite companies. The only "news" websites -- and I use that term loosely -- that survive on that model have high traffic and low costs. I'm talking any Google News feature, Huffington Post or any other aggregating site that aims for wide audiences. The big newspapers can't do it, and none of the smaller ones can either.

Music is very analogous. Obviously Taylor Swift would be fine if she put her songs on free Spotify. She can sell out concerts and get paid for plenty of other gigs as well. But she wants people to value her work and the work of others who help get her music out, and I agree with her. Apple apparently is agreeing with her with Apple Music and the News app, which is remarkably letting local advertising sold keep 100 percent of profits and remants coming through iAd give 70 percent of revenue to content producers and 30 percent to Apple. THAT IS UNHEARD OF IN NEWS ADVERTISING. But it's what Apple seems to be setting as a standard about everywhere, and it obviously works out if you're a good developer.

I do wonder if her latest music will be available on Apple Music. She has her older stuff on Beats, but not 1989 or the latest single with the insane video.

 

[jkruehne]

(…) with 58 percent of its subscription revenues going to record labels. For every $9.99 Apple collects from subscribers in the United States, it will pay out $5.80 to labels. (…)
Thanks for doing the math for me … *shake head*

 

[jovada]

How come the annual amount is 10x the monthly amount?

 

[Tech198]

That sounds about right... Apple gets their standard 30% cut.

I think it's higher than most others is it ? If so, an then labels get more money, then Apple is sure keen to have then. I worked out Spotify only pays labels something like $2.40 or something, so Apple must REALLY want their business.

I call it desperate , or it could be "giving labels what they want" vs what u read elsewhere where spotify treats the labels like crap when it comes to payout, probably why Taylor swift pulled out.... (anyone's guess on that one though)

 

[Oletros]

That sounds about right... Apple gets their standard 30% cut.

I think it's higher than most others is it ? If so, an then labels get more money, then Apple is sure keen to have then. I worked out Spotify only pays labels something like $2.40 or something, so Apple must REALLY want their business.

I call it desperate , or it could be "giving labels what they want" vs what u read elsewhere where spotify treats the labels like crap when it comes to payout, probably why Taylor swift pulled out.... (anyone's guess on that one though)

Spotify passes the same 70% as Apple or Google

 

[Whimseh]

Yeah but Spotify is free.

So.

Check mate.

 

[Oletros]

Yeah but Spotify is free.

So.

Check mate.

Spotify is not just free
And Apple has a free tier

Check mate? What?

 

[LucasEVille]

Yeah but Spotify is free.

So.

Check mate.

Nothing is free.

We get/have 24 months premium Spotify membership free* with our vodafone UK contracts, but its not really free when its bundled with the cost of a contract and the extra data we get. By our working out its £3 cheaper a month with a differing network on same data without Spotify premium.

Even if we had cheapskate Spotify free* membership, it isn't free. Its just being paid for by ads, the loss of functions and subsidized by other paid premium members who Spotify have successfully upsold to a membership.

Our contract runs out in time for the predicted September launch of the next iPhone and spotify will no longer be a consideration for us in choosing a contract as it will be both redundant and extremely limited compared to the advantages of Apple Music.

Consider this in their T&Cs:

Targeting/advertising We use these cookies to serve you with advertisements that may be relevant to you and your interests. The information may also be used for frequency capping purposes and to help us regulate the advertisements you receive and measure their effectiveness.
Third Party We may allow our business partners to use cookies on the Spotify Service for the same purposes identified above. We may also use service providers acting on our behalf to use cookies for the purposes identified above.
Spotify Ads We work with web publishers, advertising networks and service providers to deliver Spotify ads on other web sites. Cookies may be used to serve you with advertisements that may be relevant to you and your interests on other web sites and to regulate the advertisements you receive and measure their effectiveness.

 

[OldSchoolMacGuy]

Sure, her recent album had collaborations with known producers, but I can assure you most of her content is self-written. Her entire third album (which many fans consider her best, myself included) was written by herself - no co-writers - and produced by herself and Nathan Chapman of Big Machine Records.

Please look up the songwriting credits of her discography before making these statements. They are public domain.

Seems every song on that album had a co-writer which generally means that she at best suggested a lyric change or two. I know it can be hard hearing someone you love doesn't write their own but it is so very true.

 

[KidAKidB]

Scathing blog post from Bob Lefsetz on Apple Music. Sure doesn't feel like anyone in the business is terribly impressed. You know it's bad when even Jim Dalrymple says Jimmy Iovine was terrible and his and Drake's portions of the keynote were a complete failure.

http://lefsetz.com/wordpress/index.php/archives/2015/06/10/apple-music/

Iovine is a shark. Anyone who thinks he's anything other than a businessman trying to make a sale is completely delusional.

Iovine barely knew what he was doing on stage and frankly I don't think too many people bought what he was saying.

Apple Music is a very late addition to the streaming music world and the fact that they called it "Revolutionary" was pretty arrogant. There really was nothing revolutionary about it. Sure you added a worldwide radio station, but honestly I don't think that many people were asking or even interested in that.

 

[QquegChristian]

I'd hate to be a smaller band releasing an album in the next few months.

Every iPhone is going to get 3 free months of streaming with 0% going to artists in that time.

 

[LucasEVille]

I'd hate to be a smaller band releasing an album in the next few months.

Every iPhone is going to get 3 free months of streaming with 0% going to artists in that time.

Hadn't even thought of this, wonder whether the record labels have already looked into this and worked out a clause with Apple for the first 3 months.

 

[andiwm2003]

I wonder why MacRumors cosistently ignores Amazon's streaming service. It's included if you have Amazon prime for $100 per year. Many consider that "free" because we pay for Amazon prime for other reasons anyway. I don't know how many customers have Amazon prime though.

Would be interesting to know what percentage of these customers do NOT subscribe to any other streaming service because they are satisfied with the (somewhat limited) service from Amazon already.

 

[Avatar74]

How long before record labels are irrelevant?

Artists and publishing companies must be looking at that 58% cut the labels are getting and wondering why they don't just go direct to Apple and Spotify to distribute their content.

A record label in principle is much more than a distributor. I wrote a paper about internet distribution of music about twenty years ago and at that time I was convinced that internet distribution would revolutionize the market. And it did... CD's at their height had retailed for $12.98 to $15.98 and now we're in a singles-driven market. Tons of middlemen have been eliminated from the process... rack jobbers, one stops, etc.

The dynamics that don't change, though, are that recording artists still have to hire somebody to promote and market them, even more so now than before because internet distro has made the playing field humongous. There's several ways they can go about it, but in the end the artist will pay for it just like they pay for it with a label. Just like they pay recording costs either way.

Some artists will do fine on their own. Some struggle with getting exposure. Any recording artist that wants to grow will have to hire people directly or indirectly to promote them.... it's just a matter of which arrangement and what costs make the best sense for them.

One thing is for certain, the industry is a lot more diverse and so the mix of majors, minimajors, independents, etc. is shifting.... 20 years ago independent artists like Lorde and Macklemore would never have made it.

 

[BigInDallas]

Labels are dinosaurs, artists do not need them.. Excuse me.. real artists do not need them. Real artists put time and effort into what they do. Anyone who has half a brain could release a cd these days and tour off that. But of course to many dumb people in an industry that is dying because they want to play the blame game on mp3's and illegal downloading when really it's all about the way contracts are written.. the raping of artists by labels is something that should completely go away in time as more and more people realize they can release material on their own.

So who defines a real artist

 

[Avatar74]

Labels are dinosaurs, artists do not need them.. Excuse me.. real artists do not need them. Real artists put time and effort into what they do. Anyone who has half a brain could release a cd these days and tour off that.

And they'd still have to hire people to promote and market them... In order to put "time and effort" into your music, you have to delegate... Four or five people in a band can only sell so many albums out the trunk of their car before they have to scale up.

I'm not advocating for labels... but the internet has put pressure on them to change, and they are changing and they want to change, but being in a business is no different than being in a band... everybody has an ego and that clouds their business judgment. It's easy to cast hyperbole on the situation but the truth of the matter is that some artists will always want a label because artists are experts in music, record labels are experts in promoting music.

"Real artists" want to get paid for their work and not be sleeping in a van forever, too.