CUPERTINO, CA (CelebrityAccess MediaWire) — As Apple gears up to launch their new iRadio online music service, they have revealed just how much they plan to pay rights holders for streamed music.
According to the Wall Street Journal, Apple reported that in the first year, they plan to pay indie labels 0.13 cents each time a song is played, as well as a 15% share of the net advertising revenue proportionate to that the share of that label's music that is played on the service. These rates increase in the second year to .14 cents per listen, and 19% of the net ad revenue.
Apple claimed that the royalty rates for the major labels — Sony, Vivendi, Warner and Universal — are similar, but not identical to the rates for indies and the majors are expected to receive cash advances against future royalty payments.
Apple is also offering better rates for music publishers — more than double what Pandora currently pays, according to the WSJ, though the specifics were not disclosed.
As with everything however, there is some fine print and Apple will not be paying royalties for streamed music that is in a user's iTunes library, or for some streamed songs that are on albums from which a user owns a limited selection of tracks. Nor will Apple pay for songs selected by iTunes as special promotions, or for tracks that a user skips over in the first 20 seconds of play. Up to two songs per hour can be excluded from royalty payments.
The profits from advertising revenue also remain something of a mystery as Apple has historically been reluctant to push advertising on its platforms and Apple may be looking more towards driving revenue from sales in their iTunes music store instead of generating ad revenue.
Pandora's Tim Westergren noted that it was unfair to compare Apple and Pandora, telling the WSJ that the two services are functionally different, and that there different mechanisms in each that trigger royalty payments.
“It’s apples and oranges,” Mr. Westergren told the Journal. Pun intended, we are sure. – CelebrityAccess Staff Writers