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Apple Music Revenue Share to Music Labels, Publishers Explained

Apple Music Revenue Share to Music Labels Publishers Explained Re code


Here are the real numbers, according to Robert Kondrk, the Apple executive who negotiates music deals along with media boss Eddy Cue: In the U.S., Apple will pay music owners 71.5 percent of Apple Music’s subscription revenue. Outside the U.S., the number will fluctuate, but will average around 73 percent, he told Re/code in an interview. Executives at labels Apple is working with confirmed the figures.

Those totals include payments to the people who own the sound recordings Apple Music will play, as well as the people who own the publishing rights to songs’ underlying compositions. That doesn’t mean the money will necessarily go to the musicians who recorded or wrote the songs, since their payouts are governed by often-byzantine contracts with music labels and publishers.

Apple won’t pay music owners anything for the songs that are streamed during Apple Music’s three-month trial period, a bone of contention with music labels during negotiations for the new service. But Kondrk says Apple’s payouts are a few percentage points higher than the industry standard, in part to account for the lengthy trial period; most paid subscription services offer a free one-month trial.

The big exception to the industry standard is Spotify, which offers a $10-a-month paid service, along with free versions that offer unlimited, ad-supported, on-demand music on desktop PCs, and more restricted free music on phones. Apple has campaigned against Spotify’s freemium model, and top label executives have pushed Spotify to pull back on free as well.

Spotify spokesman Jonathan Prince points out that Apple offers its own free music via its iTunes Radio service, and will offer more via the Beats 1 radio service that it will launch alongside its paid service; Apple will pay music owners a much lower fee for music streamed on those options, which don’t allow them to call up songs on demand. Says Prince: “We pay royalties on every single listen, including trial offers and our mobile free custom radio service, and that adds up to approximately 70 percent of our total revenues, as it always has.”

Stashed in: Apple, Music, Monetization, @drdre, Spotify

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Thanks for the real numbers! Really does seem like Apple is doing what it can to kill Spotify. 

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