When Apple Music hits, it’ll pay artists about the industry standard.
A leaked document shared by Digital Music News shows that with Apple charging between US$9.99 and US$14.99 per month for its upcoming on-demand Apple Music service, with 58 percent of its subscription revenues going to record labels. For every US$9.99 Apple collects from subscribers in the United States, it will pay out US$5.80 to labels. Additionally, Apple pays approximately 12 percent to publishers and/or songwriters, leaving the company with somewhere around 30 percent of the revenue from the Apple Music service.
The figures come on the heels of Digital Music News erroneously suggesting Apple was paying less to music labels than other streaming music services like Spotify (after failing to take into account the publisher’s fee), but as it turns out, the 70 percent that Apple pays out to rights holders is on par with the industry standard.
In some circumstances, the fees provided to rights holders can vary, such as when student accounts are involved or when the Apple Music service is provided through a third-party service like Google Play or bundled into a carrier package. During Apple’s three-month free trial period that it provides to all subscribers, it is not required to pay any fees to rights holders.
Profit sharing, value and royalties have traditionally caused tension between artists, labels and other rights holders. In the case of Taylor Swift, Swift famously pulled all of her music from Spotify last year, claiming that by offering music for free, Spotify was undervaluing her work.
Apple does not offer a free ad-supported tier for its on-demand streaming music service, choosing to supplement instead with an accompanying radio service. Apple has even allegedly urged record labels to cease offering deals to services that do offer free ad-supported listening tiers, like Spotify and YouTube.
Apple Music launches on June 30 as part of iOS 8.4.
Stay tuned for additional details as they become available.
Via MacRumors and Digital Music News