Apple's New Music Royalty Proposal Would Make Streaming Costlier for Free Services Like Spotify

[APlotdevice]

Why the heck is the government involved in music royalties?

Article I, Section 8, Clause 8 (aka the Copyright Clause) of the US Constitution:

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries"

 

[Rogifan]

Sorry, but it IS retroactive. Meaning most Spotify subscribers will already be on the 15% rate already.

Apple shouldn't even be getting 15%. They don't host this content or have anything to do with its creation or marketing of it. When I was using Spotify I specifically signed up via Safari because I wasn't going to pay $3 extra per month just so Apple could take a 30% cut.
[doublepost=1468671668][/doublepost]

I think another reason to use a non Apple streaming service is the awefull mess of a music app my 6S and iPod Touch now have! Even the podcast app doesn't seem to download things properly.

If Apple actually spent time and money on its apps and told Ive to leave software WELL ALONE!!! Then they would be onto something I think many would appreciate.

Apple Music and the Podcasts app are the responsibility of Cue not Ive.

 

[Kaibelf]

I don't. I either download from torrent site or download from YouTube. I also use QQ Music for streaming music.

I never buy any song nor pay for movie.

And yet I'm sure you demand money from your boss.
[doublepost=1468672153][/doublepost]

Remind me of any business that goes out of its way to promote its competitors

Well that time CVS blocked Apple Pay was the best Walgreen's commercial I ever saw...

 

[threesixty360]

I don't complain Apple do whatever. I don't care about music streaming. If free music streaming is not available anymore, I just go download.

I don't expect anyone agree with me, I just express my opinion. Never buy into wall gardened ecosystem. And FREE IS ALWAYS GOOD AND NOTHING BEATS FREE

In the future you won't have a way to download content from anywhere really (especially not free / pirated stuff). With some many people using devices / mobiles and not conventional computers the ability to lock people in via DRM is finally in place. In a few years I expect that no major music of videos releases will be downloadable, only streaming. And if companies don't actually produce master copies of cd's/dvd's any more but just go direct to streaming services there will be less room for pirate organisations to have content on torrents.

Furthermore, more pressure is being put on isp's to police illegal content anyway. In short it's just going to be more and more hassle to find free content. You might as well pay a few dollars a month and just get it when you want. Problem solved.

 

[Fender2112]

Spotify continues to operate at a loss due to expensive royalties and revenue sharing with music labels, with recent losses growing 10 percent to $195.7 million.

How does Spotify manage to stay in business?

 

[Rogifan]

Sorry, but it IS retroactive. Meaning most Spotify subscribers will already be on the 15% rate already.

So has Apple changed the App Store rules so Spotify can charge existing customers a different monthly rate than new customers? If someone has been paying $13/mo for Spotify for over a year shouldn't they now be paying $11.50/mo?

Also I don't think it's a coincidence that the Siri API doesn't work with music apps. I have no doubt a lot of people are using Music because of Siri integration and if Spotify or someone else was able to offer it they'd switch. It wouldn't surprise me if the Siri API is never opened up to music apps.

 

[x0vash0x]

Quite simply because not all users would already be at the 1 year point, and Apple won't allow Spotify to charge users different prices depending on how long they've been subscribers for. It's either all or nothing. Plus if they charge 15% rather than 30% then Spotify would be making even LESS money.
[doublepost=1468661538][/doublepost]
There's nothing illegal with Apple colluding with record labels on a decision that 100% is based on destroying it's competition? Apple KNOWS that this would destroy Spotify's free tier and this is what they're after. They don't want competition and they're doing all this in the name of the artist. As if anyone is actually stupid enough to actually believe that.

Correct. There is nothing illegal with what Apple is doing. The goal of business is to destroy its competition. Of course businesses don't want competition. Like, I don't get your point. Like I said before, this is most definitely anti-competitive, but it's not illegal.

No, it's completely anti-competitive behaviour from Apple here. Apple has opened up a platform, now either it makes it fully open, non discriminatory and competitive or just close it down entirely. If Apple is concerned about other music services in its platform, it need only look at its own music service and compete with an even greater product. Apple is spitting the dummy and chucking a tantrum in the playpen when it should only be looking at developing and growing itself. There's no reason to be concerned about other music services if Apple creates a best and much loved service of its own.

Again, of course its anti-competitive. Duh. That's the whole point of business. Who the Hell opens a business without embracing anti-competitive behavior? The goal of business is to destroy your competition. Duh.

[doublepost=1468668182][/doublepost]

I don't care. It is either I download or I am not. Either way, I am not paying.

Duh. But, at least embrace you're a thief. Piracy is theft. You can justify however you want, and you can still call yourself a moral person. I don't care either, but at least admit what you're doing: stealing. This is why China will never be successful, plus the children ******** in streets in public.

Huh? Your sentences don't make sense.
"But also, since when has businesses competing been such a bad thing?" - You're implying it is a good thing to have competition.
"Businesses SHOULD be anti-competitive" - You're saying that there should NOT be competition.

Contradicting yourself?

No. Business compete based on anti-competitive behavior. Their goal is become a monopoly. That's the wet of every business.

In the future you won't have a way to download content from anywhere really (especially not free / pirated stuff). With some many people using devices / mobiles and not conventional computers the ability to lock people in via DRM is finally in place. In a few years I expect that no major music of videos releases will be downloadable, only streaming. And if companies don't actually produce master copies of cd's/dvd's any more but just go direct to streaming services there will be less room for pirate organisations to have content on torrents.

Furthermore, more pressure is being put on isp's to police illegal content anyway. In short it's just going to be more and more hassle to find free content. You might as well pay a few dollars a month and just get it when you want. Problem solved.

That logic doesn't apply to China or Chinese. Chinese ISP don't care about IP and the Chinese government barely bats an eye at IP theft or anything of the sort. Honestly though, it doesn't make a difference for Western businesses. English streaming services are a joke in China, and Chinese streaming services carry ****** English movies. And like the guy says, no Chinese person is going to pay the money Western movie studios demand. So, basically, Chinese are going to pirate English movies, TV shows, and songs, because Chinese government doesn't care, and Chinese themselves aren't going to pay more than a dollar or two at most for a movie, which Western artists will never agree to.

 

[samcraig]

There only motive is to try and kill their competition. While it may benefit artists - that is just a side product of this proposal. Anyone who argues differently is not paying attention.

 

[Rogifan]

There only motive is to try and kill their competition. While it may benefit artists - that is just a side product of this proposal. Anyone who argues differently is not paying attention.

Don't agree. Killing off the competition would just invite the wrath of anti-trust and government regulators. I doubt Apple wants to go through the e-book crap all over again. However it's not Apple's problem that Spotify doesn't have a sustainable business model.

 

[akadafni]

All the naysayers on MR should start their own technology company. You clearly are more capable than Apple. I'm not saying Apple can't be criticised, it's the incessant pissing and moaning in every post that gets me.

If I could give this 2 thumbs up I....oh wait I can

 

[samcraig]

Don't agree. Killing off the competition would just invite the wrath of anti-trust and government regulators. I doubt Apple wants to go through the e-book crap all over again. However it's not Apple's problem that Spotify doesn't have a sustainable business model.

Apple learned from the eBook debacle. Which is why they are petitioning/proposing vs trying to make backroom deals with artists and publishers. But this isn't about making money for the artists. I'm not sure how you can even argue this. This is all about breaking the competition so Apple can compete. I don't blame them for trying. I just see through their PR spin on it. It's not noble. It's a case of Apple entering an established market and trying to disrupt it for their benefit. But this isn't a phone or a tablet. It's very different.The rules, players and consumer behavior is different.

It's not at all Apple's fault that Spotify doesn't have a sustainable business model. Which is exactly why they are trying to take them out of the race this way instead of providing a superior product. That last bit is subjective.

 

[smacrumon]

Correct. There is nothing illegal with what Apple is doing. The goal of business is to destroy its competition. Of course businesses don't want competition. Like, I don't get your point. Like I said before, this is most definitely anti-competitive, but it's not illegal.



Again, of course its anti-competitive. Duh. That's the whole point of business. Who the Hell opens a business without embracing anti-competitive behavior? The goal of business is to destroy your competition. Duh.



Duh. But, at least embrace you're a thief. Piracy is theft. You can justify however you want, and you can still call yourself a moral person. I don't care either, but at least admit what you're doing: stealing. This is why China will never be successful, plus the children ******** in streets in public.



No. Business compete based on anti-competitive behavior. Their goal is become a monopoly. That's the wet of every business.



That logic doesn't apply to China or Chinese. Chinese ISP don't care about IP and the Chinese government barely bats an eye at IP theft or anything of the sort. Honestly though, it doesn't make a difference for Western businesses. English streaming services are a joke in China, and Chinese streaming services carry ****** English movies. And like the guy says, no Chinese person is going to pay the money Western movie studios demand. So, basically, Chinese are going to pirate English movies, TV shows, and songs, because Chinese government doesn't care, and Chinese themselves aren't going to pay more than a dollar or two at most for a movie, which Western artists will never agree to.

No, the goal of business is not to destroy the competition, but to make the best products and services. The issue is anti competitive behaviour is illegal in many jurisdictions. So if Apple wants to prevent exposing shareholders to legal actions, it should avoid the anti competitive behaviours and instead focus solely on making the best products and services and not a discriminatory platform that exposes the Apple business to legal action.

 

[mwd25]

This is sooo not gonna fly.

First of all this is not about artists making any money cause 9.1 cents on a 100 streams is an insult but artists have accepted the offer to stream their music so who give a crap about them. They have blatantly chosen to make their money on tours and from merchandise if they have an easy 360 contract.

This hits the consumer the hardest cause they might not have a free option.

What I don't get here is how come the CRB only consulted Apple instead of other leading music streamers. That is the sole reason why this proposal will go down.

Well, since Artists have never really made money on sales, nothing changed. Artists have always only made money from touring. They never made money on album sales. Just ask John Fogerty of CCR how much he made from record sales. Unless your Michael Jackson or Paul McCartney, you only made money from touring since there has been a music industry.

As far as not getting why CRB only consulted Apple.............they didn't consult Apple at all. Apple submitted a proposal to them.

 

[Euge]

Apple shouldn't even be getting 15%. They don't host this content or have anything to do with its creation or marketing of it. When I was using Spotify I specifically signed up via Safari because I wasn't going to pay $3 extra per month just so Apple could take a 30% cut.
[doublepost=1468671668][/doublepost]
Apple Music and the Podcasts app are the responsibility of Cue not Ive.

The cost of hosting these services and the business behind it is not cheap.

 

[4jasontv]

Wait, you have people literally smashing down your front door and barging into your house to advertise to you? And you're taking time to comment here, instead of retreating to a safe place and calling the police?

What? Focus on what I said please. The value of things naturally gravitate towards their lowest consumable price. There is so much music in the world and much of what we hear is not controlled by the listener. So instead of selling good music they focus on how to control that music. The music itself isn't worth anything because of the actions of the labels, and now they are fighting over how to sell control over it. I don't want their noise in my home unless I have control over it. Since the music doesn't cost anything, which is a price THEY set, that's what I'm willing to pay.

Or you could "literally" fabricate some irrational statement and try and associate it with my response.

 

[RickInHouston]

Why the heck is the government involved in wages?

BTW, this is even beyond that since they're also dictating exactly how the artists need to be paid. It's highly unnecessary.
[doublepost=1468644645][/doublepost]
Spotify isn't piracy. Artists and producers agree to put their music on it. 100% off their work? They've got a whole service going. Before all this, music was sold on expensive CDs. Apple saved the music industry with iTunes back then.

Apple saved the music industry with iTunes back then???

OMG. Utter lie.

 

[Rigby]

Purely from having no choice due to streaming taking over and paying out disrespectful amounts

I think you have your causalities wrong. Recorded music revenues had been in decline long before Spotify came along. Today, streaming services are the music industry's only growth driver, and along with their rising subscriber numbers the royalties for artists and labels will rise again as well. People forget that the money machine of the 1990s - the CD - initially also produced very little income for the artists until it became a mainstream format.

Paying out more for streams will help the smaller artists, in comparison to larger mainstream artists.

And who is going to pay for that? The distribution channels cannot "pay out" more than they take in in the long run. It is all limited by what the market is willing to pay.

Regarding Spotify's ad-supported tier: They say that 80% of paid subscribers started with the ad-supported tier. Arguably there wouldn't be 30 million (and growing) paying subscribers today without the free tier. And those paying subscribers generate about twice the revenue at $10/month than the average music buyer does ...

 

[ginkobiloba]

Well, since Artists have never really made money on sales, nothing changed. Artists have always only made money from touring. They never made money on album sales. Just ask John Fogerty of CCR how much he made from record sales. Unless your Michael Jackson or Paul McCartney, you only made money from touring since there has been a music industry.

As far as not getting why CRB only consulted Apple.............they didn't consult Apple at all. Apple submitted a proposal to them.

That's absoluetly untrue. In fact, it was quite the opposite for long time, many shows were loss leaders to help the sales of music. Also, there are as many recording contracts as there are artists. There are many artists that got conned and got a very bad deal with their record companies, and therefore had to get money mostly from touring. Many had reasonable deals with their record companies, and were making a living mostly from sales.
Also today, nearly 70 to 80% of all music you'll find on digital stores is made by independants.
The music biz is quite complicated. I should know, i'm a musician ( among other things)
[doublepost=1468676910][/doublepost]

How does Spotify manage to stay in business?

I'll tell you how. They don't intend to stay in business, and probably never did. Spotify lives from a constant influx of cash from investors, with a promise of a huge cashout for the owners and the investors once they go public. That's the whole reason for it to be , get a huge succesful entry in Wall Street, cash out and leave the Titanic.

 

[x0vash0x]

No, the goal of business is not to destroy the competition, but to make the best products and services. The issue is anti competitive behaviour is illegal in many jurisdictions. So if Apple wants to prevent exposing shareholders to legal actions, it should avoid the anti competitive behaviours and instead focus solely on making the best products and services and not a discriminatory platform that exposes the Apple business to legal action.

No. The goal of a (publicly traded) business is to maximize profit (i.e. shareholder value). That may, or may not, be through making the best products and services available. Apple, clearly, doesn't make the best products nor services available, yet is a massively profitable company, mostly though other means. There is literally nothing illegal in what Apple is doing. Again, it is anti competitive, but it's not illegal in any U.S law. I can't stress that enough: yes, it is definitely anti-competitive, but it is not illegal. Anti-competitive behavior is not illegal in and of itself. Now, monopoly and cartel agreements are other story. There is nothing in this proposal that would violate any anti-trust law.

Anti-Trust is NOT the same thing as anti-competitive.

Don't agree. Killing off the competition would just invite the wrath of anti-trust and government regulators. I doubt Apple wants to go through the e-book crap all over again. However it's not Apple's problem that Spotify doesn't have a sustainable business model.

There's absolutely nothing illegal with what Apple is doing.

The only, possible, twisted way this could be illegal is from this:https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain

Restraints in the supply chain are tested for their reasonableness, by analyzing the market in detail and balancing any harmful competitive effects against offsetting benefits. [...] A vertical arrangement may violate the antitrust laws, however, if it reduces competition among firms at the same level (say among retailers or among wholesalers) or prevents new firms from entering the market.

So, Apple just has to say 'Look, we know it may hurt Spotify, and make it more difficult for free streaming services exist, but we're giving artists more money! Which, is a pretty good tradeoff. The only thing the government could say in return is 'offering consumers free music is more important that giving artists more money' which is not going to happen.

Free music is dead.

 

[Rigby]

Apple learned from the eBook debacle. Which is why they are petitioning/proposing vs trying to make backroom deals with artists and publishers.

http://www.theverge.com/2015/5/4/8540935/apple-labels-spotify-streaming

 

[samcraig]

No. The goal of a (publicly traded) business is to maximize profit (i.e. shareholder value). That may, or may not, be through making the best products and services available. Apple, clearly, doesn't make the best products nor services available, yet is a massively profitable company, mostly though other means. There is literally nothing illegal in what Apple is doing. Again, it is anti competitive, but it's not illegal in any U.S law. I can't stress that enough: yes, it is definitely anti-competitive, but it is not illegal. Anti-competitive behavior is not illegal in and of itself. Now, monopoly and cartel agreements are other story. There is nothing in this proposal that would violate any anti-trust law.

Anti-Trust is NOT the same thing as anti-competitive.



There's absolutely nothing illegal with what Apple is doing.

The only, possible, twisted way this could be illegal is from this:https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain



So, Apple just has to say 'Look, we know it may hurt Spotify, and make it more difficult for free streaming services exist, but we're giving artists more money! Which, is a pretty good tradeoff. The only thing the government could say in return is 'offering consumers free music is more important that giving artists more money' which is not going to happen.

Free music is dead.

It would definitely change things. But if music is no longer free. Will people convert to streaming customers - or will they just go back to buying music that they like?

I'm not sure free streaming will die. There will just be a different revenue model (IE more ads, etc) or restrictions.

 

[mwd25]

That's absoluetly untrue. In fact, it was quite the opposite for long time, many shows were loss leaders to help the sales of music. Also, there are as many recording contracts as there are artists. There are many artists that got conned and got a very bad deal with their record companies, and therefore had to get money mostly from touring. Many had reasonable deals with their record companies, and were making a living mostly from sales.
Also today, nearly 70 to 80% of all music you'll find on digital stores is made by independants.
The music biz is quite complicated. I should know, i'm a musician ( among other things)
[doublepost=1468676910][/doublepost]

Well, we can go back and forth on this all day. When a record company approaches a band, they negotiate and then sign that band to a deal. That deal, historically has been......we hand you a pile of money and then you owe a us a predetermined amount of albums, say 3-4. As a artist, you've been paid, you get nothing, or next to nothing for album sales. The label has paid you for three albums and the label will pay to send you on tour, the label will pay to promote you and the albums. If you demand to get money from album sales that would come in through publishing rights, don't want to sign those over to the label???? Good luck getting signed. Now if....and its a gigantic if, 3 of the 4 albums you make become smash hits, then you can renegotiate on your next deal, or go to another label. But now you have been in the music industry after putting out four albums, lets say 10 years. How long does the life of a band last? How many smash hit albums do you have left in you?

As I said, unless your a major act like U2, who got hardly anything for Boy, October,War, and Unforgettable Fire, Not until Joshua Tree did they start to get paid from Album sales. And when I say that, I mean enough to make a living. They made a living on touring and merchandise up to that point. Metallica same thing, didn't make **** till third album, Master of Puppets and had to change labels to do it.

 

[x0vash0x]

It would definitely change things. But if music is no longer free. Will people convert to streaming customers - or will they just go back to buying music that they like?

I'm not sure free streaming will die. There will just be a different revenue model (IE more ads, etc) or restrictions.

I don't think it'll die completely, but I think it'll be much more like traditional radio. I think people will have less control (i.e. less skips and perhaps no on-demand function). I'm not sure what advantage it'll have over traditional radio, other than it being basically a customized radio station.

I think the vast majority (probably 80%+ will switch to paid) but a sizable minority will pirate.

 

[Michael Goff]

You don't wanna call it theft? Lets call it a rip off, lets call it milking the userbase, a disservice to the music industry and a disservice to artists. 0% profits on Mac from Spotify, 30% profits on iOS at the expense of artists. It's as clear as that and it's wrong. So please Apple, don't even try to pass this off as you caring about artists.

It's about greed and killing the competition's free tier.

Apple's cut shouldn't come from the artist if the company doing the streaming has a sound business plan. But Spotify wants to have a free tier that's not profitable. You can blame Apple all you want, but Spotify is screwing the artists if they don't pay them enough.

 

[wovel]

This is sooo not gonna fly.

First of all this is not about artists making any money cause 9.1 cents on a 100 streams is an insult but artists have accepted the offer to stream their music so who give a crap about them. They have blatantly chosen to make their money on tours and from merchandise if they have an easy 360 contract.

This hits the consumer the hardest cause they might not have a free option.

What I don't get here is how come the CRB only consulted Apple instead of other leading music streamers. That is the sole reason why this proposal will go down.

If you think 9,1 cents on 100 streams is an insult, you should really learn something about the music business before making judge mental statements about it. How much do you suppose the song writing royalty is on 100 radio listeners?

Apple is a leading music streamer. Spotify is not. Having customers does not make you a leader in a business. Spotify just lost $195 million in that business and has never actually made money in that business. You have to start to wonder if Spotify is a business or a very expensive hobby. Now that we have pretty clearly eliminated Spotify from the list, who do you suggest the CRB talk to?
[doublepost=1468679354][/doublepost]

How awful that a musician's work can be listened to one million times, yet they would receive just $910.

I dread to think how many hit songs they would have to write in order to make a living.

I much do you think they make when the song is heard by 10 million radio listeners? Here is a hint, no where near $910. Much, much, much less. Maybe they are underpaid, but it is not by the streaming companies.