Home News Apple Negotiating with Music Labels Over Apple Music Revenue

Apple Negotiating with Music Labels Over Apple Music Revenue

Jun 25, 2017

If you are using an iOS device, you might be curious to know about the new negotiating going on between Apple and the music labels. Right now, Apple is trying to get new deals worked out with the music labels. A lot of the deals that the music labels have with Apple for Apple Music are going to be expiring within the next few weeks. Apple is now trying to work on negotiating new deals with these music companies, which could impact your Apple Music streaming down the road.

Apple Negotiating with Music Labels Over Revenue

When it comes to Apple Music, did you know it is actually the second-largest in terms of streaming services available? It appears that Apple is trying to make itself more like Spotify in terms of the deals that are made with the music labels in order to stream the music. Apple is currently negotiating with various big-name music labels in an effort to get new deals done before the deals run out in a couple weeks. Apple has not had a very good relationship with the music companies through the years, so the negotiating could be more difficult than other negotiations that Apple has made in the past.

The biggest part of the ongoing negotiating terms Apple is focused on now has to deal with the revenue share that the music companies get. Apple wants the music labels to get a smaller share of the revenue, which would put the cut more on par with what is going on over at Spotify. The main part of the negotiating between the music labels and Apple deal with Apple Music as a music streaming service.

Apple Music has only really been around for about two years, although millions of songs are already a part of Apple Music. If you have not heard about Apple Music, it is the place you can go on iOS to either purchase a song or an entire album of the artist you want. The various record labels out there have deals with Apple to allow the music to be put on Apple Music, although revenue is always a topic that is concerning to both parties.

Apple Negotiating Terms of Apple Music Revenue

It appears that Apple is leaning towards trying to go the way of Spotify in terms of the rate that is being paid out to the music labels. The music industry itself has underwent many changes in the past 15 years, but the past 8 years have really made way for even more changes for the music industry.

People are moving away from the standard means of listening to music, and now are going to places like YouTube or Apple Music to get their music fix. There are a ton of music-streaming apps available now too, which has been something that within the past five years has really become popular among people on mobile devices.

The deals that are good right now expire in about two weeks, but if there is no agreement or negotiating terms in the works, then it is possible the deal in place could be extended out. The deal would then stay in place until Apple could agree on new terms with the music labels. With all of the digital technology out there now, music labels have struggled when it comes to making money. The hope is that Apple can help bring the music industry as a whole back from the brink. The record labels are now feeling hopeful and optimistic, especially since the industry itself grew almost 6 percent in 2016.

The music labels want Apple to promote iTunes specifically, with the focus being in the countries where music-streaming is not really a thing. The music labels are already getting about 58 percent of the revenue from the music streaming, which is definitely on the higher end of things.

Spotify renegotiated so that the music labels get 52 percent of the revenue, which was down from the initial 55 percent revenue Spotify offered. Now, it appears Apple is trying to begin negotiating to bring down the 58 percent revenue that the music labels get, and bring it closer to the 52 percent mark that is seen with Spotify.

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Nick Pike
Nick brings nearly 8 years of experience in mobile app development to the App Informers team. His knowledge in the inner workings of app development, marketing, and monetization add a unique perspective to the team.