Apples streaming music service hasnt launched because it wants dirtcheap rates

first_imgYou’d think that negotiating rights deals with record labels would be easy for Apple, which opened the floodgates on digital distribution profits when it launched iTunes. In reality, however, not so much. According to anonymous inside sources, Apple can’t get the deals done because it’s not willing to pony up.Right now, Apple pays something in the neighborhood of 33 cents per 100 songs streamed from the cloud for iTunes Match users. That’s for music that people have already purchased and theoretically have some kind of corresponding fair use rights.For its long-rumored streaming service, Apple reportedly wants to pay about 6 cents per 100. If this really is a Spotify or Pandora competitor that Apple is brewing up, then that 6 cents per 100 tracks is supposed to cover songs you don’t already own. That hardly seems like the kind of deal record execs are likely to sign.Spotify reportedly pays about 35 cents per hundred songs, while Pandora has a much sweeter deal that runs it only 12 cents. Yes, Apple would bring a huge, loyal user base to the party, but do the record companies really want to agree to such a low-ball offer? Based on the fact that the deal isn’t done yet, the answer is a resounding no.That’s not a surprise, either, given the popularity of Spotify, Pandora, Rhapsody, et al. It’s a bit early for industry bigwigs to agree to Apple’s miserly 6 cent figure, because it would make it tricky to keep their streaming revenue at the current “comfortable levels” come renegotiation time.Let’s hope Apple doesn’t get its way. It already takes an artist 1,000 plus plays to earn a single dollar from Spotify. With Apple reportedly wanting to pay the labels around 1/6 of that rate, lesser-known artists would be getting seriously shafted.last_img

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