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Apple Paying Music Labels Up to $150 Million for iCloud Streaming Rights?

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The New York Post reports that Apple is paying the four major music labels up to a total of $150 million for the rights to include their music in its iCloud music streaming service set to be introduced on Monday. The revelation comes just as Apple reportedly finalized a deal with Universal, the last of the four major labels to sign on to the deal.
Apple will fork over between $100 million and $150 million in advanced payments to the four major music labels in order to get its iCloud off the ground, three separate sources told The Post.

The Cupertino, Calif., tech giant has agreed to pay the labels between $25 million to $50 million each, as an incentive to get on board, depending on how many tracks consumers are storing.
The report also claims that Apple has finalized deals with the corresponding music publishers, officially opening the door for a launch. Previous reports had indicated that Apple was putting the final touches on agreements with the publishers.

Multiple news outlets have reported since yesterday that iCloud will debut as a free service, with Apple eventually looking to charge in the neighborhood of $25 per year for the service. Sources have also claimed that iCloud will be limited at first, supporting only content purchased from the iTunes Store, but that Apple is working to expand iCloud to support music obtained from other sources in the future.

Article Link: Apple Paying Music Labels Up to $150 Million for iCloud Streaming Rights?
 

NebulaClash

macrumors 68000
Feb 4, 2010
1,810
0
If there's one thing Apple has plenty of, it's cash on hand. Might as well use it to get idiot partners to cooperate to do what's in their best interests anyway as Apple drags them kicking and screaming into the 21st century.
 
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elhungarian

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Aug 13, 2009
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Wonder how many people don't own iTunes music
 
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Full of Win

macrumors 68030
Nov 22, 2007
2,615
1
Ask Apple
If it's iTunes only content, this will be another failure from Apple.

iTunes only content on icloud = Ping 2
 
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ghostlines

macrumors regular
Feb 3, 2010
141
3
Amsterdam
It seems Apple just wants to cover it's bases incase the music labels sue them later for not striking deals with them.
But Apple already has deals with them for iTunes so couldn't they just setup iCloud as cloud storage and let people stream their purchases from there?

$150 Mil seems like a lot to me. But hey maybe it's just peanuts to Apple.:cool:
 
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d0minick

macrumors 6502
Mar 8, 2011
304
503
I firmly believe that this will be much more then a storage locker. It is going to be a streaming service over 3g. At least I hope.

Why would they shell out that much for locker permission. And people would buy that instead of free with google and amazon?

please be all-you-can-eat streaming! :D:D:D
 
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bsforever

macrumors member
Dec 25, 2008
56
2
Will it be international or US only like how spotify started in EU countries only?
 
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ghostlines

macrumors regular
Feb 3, 2010
141
3
Amsterdam
If it's iTunes only content, this will be another failure from Apple.

Well maybe they'll acquire Dropbox later, but they should try and focus on one thing for a while and be good at it. And let other companies eat too, they don't have to create an all in one cloud storage service right off the bat.
 
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d0minick

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Mar 8, 2011
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Wonder how many people don't own iTunes music

I got about a 3k catalog. Not one from Apple.
 
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levitynyc

macrumors 65816
Aug 19, 2006
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So stupid. Why do you need to license something that people already bought? Does every CD player maker have to pay the record labels?
 
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Small White Car

macrumors G4
Aug 29, 2006
10,925
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Washington DC
That seems inexpensive considering how many labels it is...congrats Apple

This is just an up-front tip. The equivalent of a free drink in a casino.

I'm sure they'll get money monthly, too. In other words, this may be a small amount of money, but it's essentially "for" nothing other than saying "hey, like us!"
 
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0815

macrumors 68000
Jul 9, 2010
1,745
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here and there but not over there
So much money to give Apple the right stream music that you already purchased from their servers (not even allowing to stream music that you purchased on CD or through other legal means) ?

Hope the rumors are wrong and there is more to the iCould ....
 
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tharoc

macrumors newbie
Jun 26, 2010
14
2
Phoenix, Arizona
Record labels are no better quality group of people than the ladies that occupy the red light districts throughout the world...
 
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Bodypainter

macrumors regular
Oct 11, 2007
196
0
i don't understand that! can anyone explain it to me? Why does apple pay the record companies anything at all?

we bought those files, we store them on our hard disk and if you stream them from "your" cloud they are the same, only the space where you store them us different.

will we also have to pay if we copy the files to another hard disk? or maybe when we sync with our iPods and iPhones? maybe the record companies could start charging us when we use a different headphone or when we play it on a different hifi - car or at home?

isn't it a wonder we can just rip a cd in iTunes? I am sure nowadays you'd have to pay extra for that. maybe 5 us$... or more?
 
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fattire357

macrumors regular
May 18, 2011
176
0
Investing that much must mean that they will do whatever is needed to make it more successful than MobileMe.

It'll never be successful as long as the only two tiers of subscription are:

1. free trial
2. paid subscription


They need to have some free subscription, kind of like dropbox and their 2GB plan. I wouldn't be paying monthly for dropbox if it wasn't for being lured in :).
 
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mrklaw

macrumors 68030
Jan 29, 2008
2,571
889
If there's one thing Apple has plenty of, it's cash on hand. Might as well use it to get idiot partners to cooperate to do what's in their best interests anyway as Apple drags them kicking and screaming into the 21st century.

I can't believe it should cost anywhere near that kind of money.

But I *can* believe that labels would demand that kind of money.

And perhaps with a cash rich company like Apple, this is worth it to try and force the business model onto the likes of Google/Amazon etc? It'll perhaps encourage labels and publishers to seek injunctions/damages against them.

A little like Apple forcing the agency model on everyone else when it set up ibooks. IMO thats a bad model that discourages competition amongst retailers. But if you're last to market and in a challenger position, its a smart thing to do, to neutralise advantages your competitor has.
 
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fattire357

macrumors regular
May 18, 2011
176
0
Record labels are no better quality group of people than the ladies that occupy the red light districts throughout the world...

Hey, don't be dissing on the prostitutes. we both know they have much more character than a record company. :chuckle:
 
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Small White Car

macrumors G4
Aug 29, 2006
10,925
1,234
Washington DC
we bought those files, we store them on our hard disk and if you stream them from "your" cloud they are the same, only the space where you store them us different.

That's what Amazon does and Amazon doesn't pay the labels.

Thus we have to conclude that iCloud will be something different, yeah?
 
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0815

macrumors 68000
Jul 9, 2010
1,745
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here and there but not over there
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Wonder how many people don't own iTunes music

The bigger question is: how many people own music purchased OUTSIDE of iTunes ... probably a lot, and those are the once that are getting screwed if the rumors turn out to be true
 
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BJMRamage

macrumors 68030
Oct 2, 2007
2,537
935
we all know Apple wouldn't do this but it could be a major selling point if they did....

FREE music storage locker for all your songs available anywhere with your iPod/iPhone/iPad or Apple computer. NOT synacble with PC/Android/whatever.

they take the $ hit and then get more Apple buyers.
 
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OllyW

Moderator
Staff member
Oct 11, 2005
17,112
6,491
The Black Country, England
The bigger question is: how many people own music purchased OUTSIDE of iTunes ... probably a lot, and those are the once that are getting screwed if the rumors turn out to be true

I would't say they'll be getting screwed, there's just not much of an incentive for them to sign up to iCloud.
 
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