Apple is offering indie labels and bands a chance to be heard through their iTunes Radio service, but are being pretty strict about how and what is being offered as far as payouts and perks. Billboard has obtained a copy of the licensing agreement that states Apple will pay labels $0.0013 per song plus 15% of net advertising revenue for the first year. In subsequent years, the royalty rate would increase to $0.0014 per song play plus 19% of net advertising revenue, while under the contract.
However, the minimum royalty rate will consist of 45% of net advertising revenue plus $21.25 for each 1,000 listener hours in the first year. That price slightly rises to $22.25 for the remainder of the licensing agreement. As sources indicate this agreement is similar to agreements with major labels, one major label source claims the first year royalty rate is $0.001325.
The document also states that Apple doesn’t have to pay for any indie content during the beta launch service which could last up to 120 days.
Apple will pay labels $0.0013 per song plus 15% of net advertising revenue for the first year.
There are several instances in which Apple doesn’t have to pay for content after the beta period. The service will allow listeners to skip up to six songs per hour if the user does so within the first 20 seconds of the song. Apple doesn’t have to pay for those skipped songs. Also, Apple isn’t required to pay labels should any two songs in a listener hour play from the listener’s matched-music in their cloud locker or a complete-my-album play. And, Apple will introduce heat-seeker play where Apple has agreed to promote the song on behalf of the labels which are also exempt from being paid.
And if that isn’t enough, Digital Music News is reporting that many sources are claiming that Apple is considering removing any artists from the iTunes Music Store if they do not agree to have their music streamed on iTunes Radio. No word if this is true.
Author: Buddy Iahn
Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites.