Re/code:
Here are the real numbers, according to Robert Kondrk, the Apple executive who negotiates music deals along with media boss Eddy Cue: In the U.S., Apple will pay music owners 71.5 percent of Apple Music’s subscription revenue. Outside the U.S., the number will fluctuate, but will average around 73 percent, he told Re/code in an interview. Executives at labels Apple is working with confirmed the figures.
Those totals include payments to the people who own the sound recordings Apple Music will play, as well as the people who own the publishing rights to songs’ underlying compositions. That doesn’t mean the money will necessarily go to the musicians who recorded or wrote the songs, since their payouts are governed by often-byzantine contracts with music labels and publishers.
No surprises here as the 70+% is pretty standard. What I’m curious to know is how much will those “basement musicians” Apple mentioned get? Apple talks of unsigned artists being able to get their music listened to on the service. If those artists get 70% of the revenue, it might generate significant money for them.
Thanks, I was wondering about this ever since I watched the keynote.
Streaming will eventually destroy the music business except for disposable pop music. The song du jour will survive. Anything else will wither away because there is no economically sustainable model for anything else.
That’s why Steve Jobs was so against it.
“If those artists get 70% of the revenue, it might generate significant money for them.”
Wouldn’t that allow for the opposite scenario of what you’re describing? Isn’t that the entire point of Beats radio? And the human-curated recommendations? Don’t those things all re-inforce diverse music sources and encourage alternative discoveries?
An early Spotify contract came out recently (I think as part of litigation). It is an interesting read (or at least to read about as it is pretty dense). With that said the basic premise of how the payout works is that at the end of each month, they look at the numbers of total plays (listens over 30 seconds) every song got and then they divide that into the total number of plays among all songs. That is the portion of the total payout each month that the royalty owners of the song gets. In the case of Spotify they do that twice, once for paid subscribers and once for free listeners. If that denominator gets large enough, I would imagine even for the small indie band a sliver of the pie of plays could be a nice check, but the key is getting the listens.
I think one area of potential future development would be to actually track the dollars on a customer by customer basis although I imagine that would just take a crazy amount of computing power (and for all we know this could be able Apple got some additional leverage). That would give some additional benefit to artists (or orchestras) who have longer songs (and don’t get as many plays) or those who aren’t necessarily pop where teens listen on replay multiple times per hour.
It seems that way at first, but there are too many artists and too few plays each. The one hope here could be Connect, where artists who work harder may be able to rise above the noise (as a good video can on YouTube). Sadly, the next step is usually sales. If the next step is just streaming, then the long tail gets longer, and we’re back at the end.