Report: Apple deal with record labels imminent

Report: Apple deal with record labels imminent
Last weekend, we passed along some speculation that Apple was talking to both Universal and Warner about streaming the record label's tunes for its rumored iRadio streaming music service. On Thursday, there was a new report that claimed that Apple was closing in on a deal with two unnamed record companies. According to people close to the negotiations, Apple will be paying the labels about half of what they get from Pandora for streaming their music. If true, that would seem to indicate that the Cupertino based firm was able to get the labels to accept a payment of about 6 cents for each 100 songs streamed, compared to the 12 cents that Pandora receives, which is established by the Copyright Royalty Board. Based on the Board's rates, Apple should be paying 21 cents per 100 songs streamed. In lieu of the lower stream rates, Apple is offering the labels a chance to participate in other revenue streams.

Apple will allegedly make it easy for listeners to easily purchase a song they hear through iTunes which will boost downloads and drive revenue to the labels. Another way for the record companies to profit would be to cut them in to a share of the proceeds that Apple will receive from audio ads that Apple will be running on the service.

The sources say that the negotiations are not solid and could fall apart at any time. One tipster says that the only sure money for the record labels is the per-play rate. There is no guarantee that Apple will be able to secure ads and it is unknown whether people will buy the songs from iTunes that they hear from the streaming radio service. If the labels agree to the 6 cents deal from Apple, they are taking a risk that the other revenue streams fail to deliver any revenue at all. Still, there is a good chance that everything falls into place and the streaming service debuts this summer.

source: AppleInsider

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16 Comments

1. biophone

Posts: 1994; Member since: Jun 15, 2011

Interesting. Is apple going to charge for this? You know if so its going to be expensive coming from apple. While pandora is still free for mobile. I'm interested into hearing more but pandora is already pretty good.

2. Hemlocke unregistered

Doubtful. Apple gets you when you buy. That is their business model. Google gets you when they sell your identity into advertising indentured servitude. That's their model.

4. tedkord

Posts: 17454; Member since: Jun 17, 2009

Ha. No, Apple doesn't sell your info. Nope. Not at all. No data collected. What color is the sky in your world?

5. Hemlocke unregistered

Yes, because we have all seen how many times Apple has been penalized by governments and sued by individuals over their shady privacy practices.

6. biophone

Posts: 1994; Member since: Jun 15, 2011

Apple has never given out free music before. They always charged for itunes. If they are paying for the music I don't think they will just pass it along for free.

13. maier9900

Posts: 272; Member since: Dec 17, 2011

Pandora is free for mobile and desktop... i mean free eveywhere!!

15. biophone

Posts: 1994; Member since: Jun 15, 2011

Desktop is limited now though or soon to be

3. Xolar

Posts: 57; Member since: Apr 02, 2013

hooray! bring more innovations Apple! beat the s**t out of the other companies!

7. xperiaDROID

Posts: 5629; Member since: Mar 08, 2013

Oh wait, Tim Cook is still smiling......... :D

8. Hemlocke unregistered

Why wouldn't he be smiling? iOS keeps grabbing smartphone market share and profit, while Android has continued to decline since early 2012.

11. xperiaDROID

Posts: 5629; Member since: Mar 08, 2013

Yup, and Android needs to keep it up!

9. jcpwn2004

Posts: 314; Member since: Jan 18, 2012

what a surprise, apple nickle and diming all the profit they can. I wish the record labels would just tell them to screw off.

12. Timmehor

Posts: 599; Member since: Mar 09, 2013

Because those record labels are dealing with one of the largest technology companies in the world, who wouldn't turn that down?!

14. maier9900

Posts: 272; Member since: Dec 17, 2011

very well said!!!

10. sprockkets

Posts: 1612; Member since: Jan 16, 2012

Make it easier to buy the music? Isn't it already linked as it is to itunes and amazon in pandora?

17. InspectorGadget80 unregistered

And you cant keep the songs u purchase

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