It was inevitable that other music streamers would seek reductions after Spotify negotiated lower royalty payments. Now, with it's own major label contracts just days away from expiring, Apple Music is also seeking to lower the share of revenue that it pays to rightsholders.
Apple Music is asking for a reduction in the percentage of revenue that it pays to labels and other rightsholders, sources tell Bloomberg. In negotiations to renew its contracts with the majors, which Hypebot has confirmed are currently underway, Apple is seeking royalty payments lower than the 58% of revenue that it currently pays.
Spotify recently reduced its revenue share from 55% to 52%. That would mean a 10% reduction in Apple Music payments, if Apple can, as they are demanding, match Spotify's new lower rate.
Labels Are Likely To Lower Payments
The major labels and Merlin, Hypebot has learned, are inclined to grant Apple Music a reduction, though not to as low as Spotify. Apple, after all has deeper corporate pockets, the labels argue.
But also driving these talks is a deep concern that, unless they also help other music streamers thrive, the labels will be left with a Spotify that, much like the original iTunes, is a too-powerful dominant player.