Michal Marek Music service Apple Music after its launch at the end of June, it will offer a three-month trial period, during which you will be able to try the new product for free. After it expires, you'll have to pay $10 a month, and for that price, you'll get unlimited access to stream an extensive catalog of music. These facts have been known for a long time. However, the conditions under which Apple shares income with music publishers are a novelty that has not yet been discussed.
Last week, a copy of the Apple Music contract leaked online, suggesting that Apple would hand over just 58 percent of subscription profits to labels and other music owners. In the end, however, the situation is different. In accordance with already established standards, Apple will leave around 70% of this revenue to music publishers. About the real numbers in the interview for Re / code shared Robert Kondrk from the management of Apple, who together with music publishers with Eddy Cuo negotiated.
In the United States, Apple leaves 71,5 percent of the subscription revenue to publishers. Outside the United States, the amount varies, but averages 73 percent. The resulting amount will be paid to those who have the rights to the music that Apple will stream, which of course does not mean that the money will go directly to the musicians. However, the salaries of musicians already depend on the contracts between them and their publishers.
As part of the deals, Apple ultimately agreed that it would not have to pay record labels any money for music that users play during their three-month trial period. This point was a point of contention, but in the end everything turned out in favor of the technology giant from Cupertino. Kondrk justifies this by saying that the share paid to publishers is slightly higher than the market standard, and this is to compensate for the fact that Apple offers a three-month trial. A monthly trial version is more common on the market.
A major market exception is the Swedish Spotify, which offers a free version in addition to a subscription for $10 per month. With it, you can listen to music on the desktop without restrictions, only the listening is interspersed with advertising. Apple and other competing services have this business strategy does not please and they demanded that Spotify stop offering a free variant of the service. However, Spotify defends itself with fairly legitimate arguments.
A Spotify spokesperson pointed out that Apple also offers free music through its iTunes Radio and will offer even more free music with the new Beats 1 radio. For music distributed in this way, Apple will pay publishers much less than Spotify. Spotify spokesperson Jonathan Prince added the following:
We charge for every single listen, including free trials and free personal radios. This adds up to around 70% of our total profits, as it always has been.
The wording at the beginning of the article is quite misleading when they talk about percentages of "profits" because according to the rest of the article it is about percentages of "revenues" which is quite a difference.
Corrected, thanks. In short, it is a share of the amount made up of the chosen subscription.