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Apple proposing half Pandora's royalty rate for streaming

updated 01:09 pm EST, Thu March 7, 2013

Record labels balking at Apple offer, report says

As an initial offer to a record label for a forthcoming streaming service, Apple recently proposed a royalty rate of just 6 cents per 100 songs, sources for the New York Post claim. "Apple wants a rate that is lower than Pandora's," one executive is quoted as saying. Pandora pays labels 12 cents per 100 songs, which itself is below the Copyright Royalty Board's standard 21 cents for digital-only streaming. Spotify pays 35 cents, according to the Post's sources.

Apple's lowball demands have reportedly led to rejection by multiple labels. An Apple "iRadio" service has been rumored for some time; the sources say, though, that the company was most recently hoping to launch the service alongside the iPhone 5, but couldn't secure deals in time. Apple's main negotiator for music, Eddy Cue, initially tried to secure an arrangement from Sony/ATV, but the company's resistance forced it to talk to the major labels, Universal, Sony, and Warner. "Everyone's had their initial meetings and everyone is preparing counters," one source says.

It's said that Apple may be considering bundling iRadio alongside iTunes Match. Match is designed to be a convenient way of backing up a person's music library, regardless of whether content was bought on iTunes, and making it accessible on multiple devices.



By Electronista Staff
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Comments

  1. lkrupp

    Junior Member

    Joined: 05-13-01

    Volume discount

    Even with paying half the royalties of Pandora the record labels would probably make more money on an Apple streaming service than other existing services. They just aren't that popular. Pandora is juggling its business model and putting caps on the vast majority of its users who are freetards with no intention of paying for the service. Just like the 99ยข model Jobs negotiated for iTunes the labels will make a bundle going with Apple.

  1. Sebastien

    Registered User

    Joined: 04-29-00

    Sad thing is...

    Apple will probably get away with it - not enough it's taking 30% cut on everything Apple-related anymore, now they're the worst at short-changing artists.

  1. The Vicar

    Junior Member

    Joined: 07-01-09

    @Sebastien

    Yes, how dare Apple only pay artists vastly more than they get from traditional music publishers, in exchange for handling everything related to distribution and hosting!

    Do you seriously think the various music publishers who make up the RIAA let artists keep 70% of the money coming in, the way Apple does? If so, you're way too naive.

  1. jreades

    Junior Member

    Joined: 02-02-99

    @The Vicar

    You might want to read up on how artists generally do under streaming schemes before claiming that Apple will be better than the existing model. Given what Apple is offering as a royalty payment compared to what Spotify *currently* offers it seems likely that musicians *will* do worse: 1) http://www.cnbc.com/id/100416172/As_Music_Streaming_Grows_Royalties_Slow_to_a_Trickle; 2) http://pitchfork.com/features/articles/8993-the-cloud/ ; 3) http://www.npr.org/blogs/therecord/2012/09/26/161758720/how-musicians-make-money-by-the-fraction-of-a-cent-on-spotify

  1. dprimary

    Fresh-Faced Recruit

    Joined: 03-01-10

    The apple rate still higher then radio

    Pandora pays ten times the rate that radio pays per listener, so even at half apple would being paying 5 time the rate of radio.

  1. Sebastien

    Registered User

    Joined: 04-29-00

    comment title

    @The Vicar huh, the article itself states that other services give at least twice as much... you might want to read the article again, and a little closer this time too.

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