71.5% of Apple Music's U.S. revenue will go to record labels, songwriters and performers


For every dollar that Apple Music will receive from subscribers in the U.S., 71.5% will go to songwriters, labels, artists and others with the rights to songs streamed on the service. Outside of the U.S., that number goes north to as high as 73%. Those figures come from Apple's Robert Kondrk who negotiated the deals with the labels and the artists for Apple, along with Eddy Cue. Industry executives have confirmed the figures.

While Apple's payout rate is a little higher than the industry average, the tech titan will pay no royalties on songs streamed during a user's three month free trial. Those familiar with the negotiations between Apple and the recording labels say that this did not go over well with the record companies. Most paid streaming music services offer only a one-month trial period. But Apple increased its payout on average in order to make up for the months of free trials it is offering.

Apple might still run into legal trouble, as it tried during negotiations to force the labels into pressuring rival streamer Spotify to drop its free ad-supported tier of service. 45 million of Spotify's 60 million subscribers use the company's free level of service. If Apple's decision to go with a three month trial is successful, Spotify could decide to follow suit and eliminate its free ad-supported tier.

Spotify spokesman Jonathan Prince notes that Apple does offer free music on its iTunes Radio service, and will also offer free tunes on its upcoming Beats 1 radio service. Both of those service pay labels less than Apple Music does. Prince says, "We pay royalties on every single listen, including trial offers and our mobile free custom radio service, and that adds up to approximately 70 percent of our total revenues, as it always has." But Apple believes that it will end up with more than the 20 million paid subscribers that Spotify has, meaning that the music industry will have more of its bread buttered by Apple than by Spotify.

source: Re/code via AppleInsider

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25 Comments

1. AlikMalix unregistered

Greeedy Apple, 71%, that's it? why dont you give 100% of who actually made music. Apple just using real artists to make money from instead of making something great themselves. And the worst part, Apple probably sells the most music for these artists than any other retailer (of music) there is. Will all the money they make, they should pay out more to artists. "...Great artists steal" right?

4. alvinl

Posts: 6; Member since: Dec 28, 2013

you have to understand the record labels want to sell on itunes and amazon because that's where most people purchase digital media. it's not stealing because apple doesn't have to host their files and if the record labels feel cheated, they can go have their music sold elsewhere or by themselves. the money shouldn't be paid out more to the artist because there is also fees that are crucial to be paid out first like the mix engineer, master engineer, studio time, director and his crew for the music video, promotions, etc. Artists nowadays understand most of their money made are from advertisements so the money here tends to go to the people who work hard behind the scenes to make the song happen. If your argument is if the artist doesn't sing then the song doesn't happen so they're the backbone, actually no, because most of the instrumentals aren't even made by them nor the lyrics so beats can be bounced to another artists. Examples is a beat made by Jon Bellion who went to send it to Atlantic Records but eventually landed onto Eminem who used it for the song, "Monster".

6. tedkurd unregistered

Are you mental? Most of the industry, including Spotify, and many others, give around this number. This is no where near "greedy". You also have no idea how the record industry works. Maybe J. Iovine should promote you and he should step down, since you know it all. Apple on the other hand, is making an amazing music service, which I'm jealous of. I hate them for being so successful.

8. AlikMalix unregistered

No, you probably misunderstood... They have so much money, they should give us consumers free music on damand (let us pick the tracks) and pay the artists themselves... If they dont do that - they're greedy... Why is apple in business at all is beyond me.

10. tedkurd unregistered

Much better now that you say it that way. Before all I saw was a bunch of rabble rabble from an angry man.

14. tedkord

Posts: 17312; Member since: Jun 17, 2009

Ah, now I see. You're trolling.

15. -ARTE-

Posts: 80; Member since: Jun 14, 2015

Looks more like you are.

21. marorun

Posts: 5029; Member since: Mar 30, 2015

Nope Alik is he started doing this not long ago. Playing the dumb guy and playing with word ect just to create reactions this is trolling.

9. seanwhat

Posts: 321; Member since: Jul 11, 2013

how would they make money if they gave 100%?

11. tedkord

Posts: 17312; Member since: Jun 17, 2009

Whoa. They've got to make something off this venture. And there are other costs involved, bandwidth for instance. If they get 20 million subscribers, that $200 million (rounded up) every month, and $142 million of that goes to artists. (Or, I hope it does, and it doesn't go to record companies)

18. j2001m

Posts: 3061; Member since: Apr 28, 2014

I think he is trying to say, it's about time that Apple gave something back to there customer that get rip off per year on there new Apple products, I say at this time the only good Apple product is the iPad Air 2 but the cost is way to big, you can get a full pc like the Ms s3 for cheaper, I have both an iPad Air 2 64gb and a spro3, so I am not an none fan of Apple , I also have a Samsung s6 edge ( the best phone you can buy)

22. marorun

Posts: 5029; Member since: Mar 30, 2015

70% go to label then they pay artist ofcourse everyone need to make money ;)

19. waddup121 unregistered

Ooh nice!

2. promise7

Posts: 894; Member since: Jul 03, 2013

how much does spotify, pandora, and tidal payout?

3. E.N.

Posts: 2610; Member since: Jan 25, 2009

I've read that 70% is the industry standard

5. alvinl

Posts: 6; Member since: Dec 28, 2013

Some places who are the middle man to help you get the song onto ITunes in the first place make you end up taking only 40% sadly

7. GreekGeek

Posts: 1276; Member since: Mar 22, 2014

People love Spotify because tney cater to all types of genre, from depressive suicidal Black Metal all the way to Psychedellic Pop.... I wonder if Apple will do the same.... But I doubt it... SPOTIFY is the king of catalogs.... That's why it's so popular

23. marorun

Posts: 5029; Member since: Mar 30, 2015

Everything currently available on itune will be available on the apple music so on thats note they will have as much choice if not more.. Yep i dont like apple but can see the truth.

12. tedkord

Posts: 17312; Member since: Jun 17, 2009

It sounds like Apple isn't expecting the service to take off, if they negotiated a higher backend and zero front end.

20. WallStreetWolf

Posts: 289; Member since: Apr 08, 2013

I think they are proceeding cautiously since it is a venture into an area with well-established competitors. This isn't like the iTunes introduction all those years ago. I would call this a well negotiated deal based not he circumstances.

13. meanestgenius

Posts: 21784; Member since: May 28, 2014

I think the payout is good, as long as the majority of it goes to songwriters and performers as opposed to the labels. I know that may be wishful thinking on my part. Not bad, Apple. It is unfortunate, however, that Apple is involved with anti-competitiveness concerning Spotify. Focus on better business practices, Apple.

16. dimas

Posts: 3347; Member since: Jul 22, 2014

So if my favorite artist who composed his own song made $3 million worth of streams, he'll make $2.145 million or he still have to share it with his record if he has signed on one? How about the start ups who don't have backing from record agencies and just want to do a bandcamp out of apple music? I support this 71.5% cut but I hope apple will clear the details as I dropped my spotify after what Taylor Swift and other artists call an unfair sharing made by spotify.

17. bucky

Posts: 3778; Member since: Sep 30, 2009

something tells me we dont really need to worry about whether these major musicians can pay their electricity bills. Id rather be paid something from streaming than nothing from torrenting.

25. marorun

Posts: 5029; Member since: Mar 30, 2015

lots of artist have a hard time living btw only a small fraction make milions.

24. marorun

Posts: 5029; Member since: Mar 30, 2015

over half the 71.5% will go to label thats how its work in this industry..

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