News - 22/06/2017

Apple is trying to reduce royalty rate it pays record labels

Apple is trying to reduce royalty rate it pays record labels

"Bloomberg" reported that Apple's long-term licensing deals with the labels for both Apple Music and iTunes are due to expire at the end of this month. In this scenario the Cupertino giant is re-negotiating its label revenue share rate to bring it down from 58% closer towards Spotify’s equivalent (nearly 50%).

Bloomberg’s sources suggest that, like with the Spotify deals, labels are broadly open to the discussion with Apple – so long as the company commits to agreed subscriber growth targets, as well as continued promotion of iTunes in key download markets. Both Warner and Sony are yet to sign new long-term licensing agreements with Spotify, but MBW’s sources suggest that hopes are high that a deal with at least one of the pair will be struck by the end of July.

Spotify announced last week that it now attracts over 140m monthly active users, around 53m of which are believed to be paying subscribers. Apple announced earlier this month that it now has more than 27m subscribers on its platform.

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