Apple Seeking Lower Rates With Record Labels as Initial Deals Start Expiring

[MacRumors]

Apple is said to be aiming to reduce the share of revenue record labels get from streaming music as it works to establish new deals for Apple Music and iTunes, reports Bloomberg.

Apple is reportedly pursuing lower rates as part of an effort to revise its "overall relationship" with the music industry. Apple's current deals with record labels expire at the end of June, but Bloomberg's sources say they will be extended if a new agreement can't be reached.

Apple currently pays out some of the highest royalty rates with record labels receiving 58 percent of revenue from Apple Music subscribers, but it wants a deal closer to what Spotify recently negotiated. Spotify pays 52 percent of revenue from subscribers, down from an earlier rate of 55 percent.

Spotify's new rate is contingent on subscriber growth, and music labels are said to be open to negotiating a similar deal with Apple. Record labels also want assurances from Apple that iTunes will be promoted in countries like Germany and Japan, where most music is still purchased rather than streamed.

The growth of Apple Music hasn't been as detrimental to iTunes as labels had feared. But record labels are still asking for precautions. Labels have asked Apple to commit to promoting iTunes, and music in general, in countries where streaming isn't as prevalent.

Since its 2015 introduction, Apple Music has seen steady growth, which may give Apple an upper hand when negotiating new deals with labels. As of June 2017, Apple Music has 27 million paying subscribers, up from 20 million in December of 2016.

Article Link: Apple Seeking Lower Rates With Record Labels as Initial Deals Start Expiring

 

[Cloudkicker]

Chances of Apple passing the savings on to its customers? About 2%.

 

[Jeff Flowerday]

Chances of Apple passing the savings on to its customers? About 2%.

.2%

 

[Wide opeN]

$14.99 a month for 5 lines all you can eat is already an astounding deal IMO.

 

[BMcCoy]

If they could negotiate that more of that record company share actually went to the artists, THAT would be a victory.
As it stands. Artists receive 0.000000something%
Unless the revenue distribution is radically challenged, there won't be any new music in the future...

 

[petsounds]

You would think with the involvement of Trent Reznor and Dre in Apple Music, there would actually be people looking out for the artists at Apple. Apparently they already got theirs.

 

[omihek]

I tried to lower my housework responsibilities in an effort to revise my "overall relationship" with my wife. It definitely revised the relationship, but not quite how I wanted.

 

[Xgm541]

If they could negotiate that more of that record company share actually went to the artists, THAT would be a victory.
As it stands. Artists receive 0.000000something%
Unless the revenue distribution is radically challenged, there won't be any new music in the future...

Lol out of all the doomsayers around here this must be the funniest one I've read in a while.

Will we get less Taylor Swift's ? Maybe. But many many artists create music for other reasons than profit.

I am not saying the current distribution is fair and does not need to get looked at, but to say nobody will make music is not accurate

 

[Ries]

If they could negotiate that more of that record company share actually went to the artists, THAT would be a victory.
As it stands. Artists receive 0.000000something%
Unless the revenue distribution is radically challenged, there won't be any new music in the future...

Don’t sign ripoff deals with music labels and pocket it all yourself.

 

[macaddiict]

.2%

I think even that is generous. I'm going to go with an absolute zero chance! In fact, they may raise prices

 

[69Mustang]

If they could negotiate that more of that record company share actually went to the artists, THAT would be a victory.

The chances of that happening are just a little bit less than the chances that Foxconn can negotiate lower iPhone pricing for customers. Crazy right? I can make it sound even crazier.

Apple: "Hey, we want to pay you less for your product. We also want you to pay your employees more from the less you're getting from us."

 

[Black Tiger]

Lol out of all the doomsayers around here this must be the funniest one I've read in a while.

Will we get less Taylor Swift's ? Maybe. But many many artists create music for other reasons than profit.

I am not saying the current distribution is fair and does not need to get looked at, but to say nobody will make music is not accurate

Less money for artists=less money to buy new Mac Pros too.

 

[btrach144]

Aren't the rates already low enough?

As an Apple Music subscriber, if Apple scares away all of the artists and record labels, I'll take my business to a streaming service that has the type of music that I want.

 

[Porco]

If they could negotiate that more of that record company share actually went to the artists, THAT would be a victory.
As it stands. Artists receive 0.000000something%
Unless the revenue distribution is radically challenged, there won't be any new music in the future...

I wish I could give half a like... I totally agree with your subjective opinion in your first sentence, but your last sentence is just objectively wrong. Human beings have made music of one kind of another since back towards the beginning of our species, whether it was simple percussion banging on wooden sticks with other wooden sticks to writing complex orchestral pieces with hundreds of different instruments... all of which happened long before anything like the music industry we have had in the last century or so. It's human expression. Music will be around as long as we are.

That said, that industry performs some useful functions in terms of production, promotion and distribution. But I agree that far too little of the profits go to artists and far too much goes to the record companies. Generally speaking.

But music itself will continue regardless. Of that there is no doubt.

 

[Rigby]

If they could negotiate that more of that record company share actually went to the artists, THAT would be a victory.
As it stands. Artists receive 0.000000something%

To some extent that's the artists' own fault. Nobody forces them to sign contracts with big labels. If they think their label doesn't provide enough value for the money, they are free to remain independent. Platforms such as iTunes and Spotify actually make that easier than it used to be, since digital distribution has much lower barriers of entry than distribution based on physical media (manufacturing, logistics etc.). There are even aggregators such as Tunecore that help them get their music on the big digital platforms for very little money.

 

[macTW]

To some extent that's the artists' own fault. Nobody forces them to sign contracts with big labels. If they think their label doesn't provide enough value for the money, they are free to remain independent. Platforms such as iTunes and Spotify actually make that easier than it used to be, since digital distribution has much lower barriers of entry than distribution based on physical media (manufacturing, logistics etc.). There are even aggregators such as Tunecore that help them get their music on the big digital platforms for very little money.

Yet record labels are some of the most cash-desperate cows in the US. The promotion and media advertising as well as connections and connections and connections and tour organization as well as production components like studios and staff... many artists need labels. And the labels price accordingly.

 

[Rigby]

Yet record labels are some of the most cash-desperate cows in the US. The promotion and media advertising as well as connections and connections and connections and tour organization as well as production components like studios and staff... many artists need labels.

But doesn't that also mean that the labels are worth their money in those cases?

 

[logicstudiouser]

It is ridiculous that iTunes Store prices have not changed with the rise of streaming.

 

[Col4bin]

Record labels also want assurances from Apple that iTunes will be promoted in countries like Germany and Japan, where most music is still purchased rather than streamed.

Of all the places in the world without popular music streaming services, I'd least suspect Germany and Japan of being guilty.

 

[sudo1996]

To some extent that's the artists' own fault. Nobody forces them to sign contracts with big labels. If they think their label doesn't provide enough value for the money, they are free to remain independent. Platforms such as iTunes and Spotify actually make that easier than it used to be, since digital distribution has much lower barriers of entry than distribution based on physical media (manufacturing, logistics etc.). There are even aggregators such as Tunecore that help them get their music on the big digital platforms for very little money.

I'd say the free market is rewarding everyone as it should here if it weren't for piracy. The bets are off when people can steal music, and they do steal it if it's not super cheap and super convenient to begin with. Even if there's no piracy, the threat of it is there, and it's preventing everyone in the music supply chain from charging more.

Still, as you say, the new digital distribution of music probably on average brings in more money for artists than when there were just physical copies and no Internet piracy. But that's just my guess.

 

[JungeQuex]

I'd rather see these record labels hammered into the ground and artists sign directly with distribution services like Apple Music where the artist receives 70% cut and Apple receives 30%, similar to the App Store. Right now artists make squat from their own music sales and have to do the exhaustive tour circuit to actually make money. At least in most cases.

 

[happyprozak]

Record labels also want assurances from Apple that iTunes will be promoted in countries like Germany and Japan, where most music is still purchased rather than streamed.

Of all the places in the world without popular music streaming services, I'd least suspect Germany and Japan of being guilty.

I recently read that CD's are still the number one way Japanese consume music. From what I read, the reason is that striking digital rights deals are more complicated in Japan. My guess and this is purely a guess, is that Japanese tend to be resistant to change and upper management is probably older and even more resistant to change. So the Japanese don't have the same options as the Americans.

Personally, I still buy CD's because I can own the music instead of renting it under the rubric of a digital purchase that is actually a digital rights license.

These articles of Apple renegotiating these license deals only serves to reinforce my decision to stick to CD's. Because if these negotiations don't go well and you keep your music in the cloud, you can be assured that your music will drift away like a cloud on a windy day.

 

[huperniketes]

I'd rather see these record labels hammered into the ground and artists sign directly with distribution services like Apple Music where the artist receives 70% cut and Apple receives 30%, similar to the App Store. Right now artists make squat from their own music sales and have to do the exhaustive tour circuit to actually make money. At least in most cases.

Yep. That's the unfortunate thing. At least in the film industry, certain actors realized they had gained sufficient public power to start their own studio: United Artists.

 

[AdonisSMU]

Label execs need to make less money and labels need to spend less on promotion and give more money to the artists. They also need to find a way to create a business where each artist is profitable. Everyone recording should be profitable even if it's not a big hit.

I don't think this model where a tiny few of the artists feed the whole music industry.

 

[Iconoclysm]

.2%

Would prefer they pass this on to the artists anyway.
[doublepost=1498114588][/doublepost]

I'd rather see these record labels hammered into the ground and artists sign directly with distribution services like Apple Music where the artist receives 70% cut and Apple receives 30%, similar to the App Store. Right now artists make squat from their own music sales and have to do the exhaustive tour circuit to actually make money. At least in most cases.

And that tour circuit makes less money than it ever has. Venues are taking larger cuts, and there are fewer venues.