Wednesday, October 22, 2014

Apple Asks Labels For Discount

Beats Music image
Artists, bands and songwriters are complaining about what they're making from streaming services, but new negotiations by Apple and the major labels might have a big bearing on future royalties.

While $10 a month seems to be the going rate for most interactive streaming services like Spotify (Pandora charges $5, but it's non-interactive), Apple thinks that's too much. The company would like to lower that to $5 per month for Beats Music, but says it can only do so with a new licensing deal with the majors.

A new economic model could go either way for artists. If subscriptions increase, as analysts (including me) predict, then artists will make more money than they are now, and some cases, a lot more. Apple thinks that a lower price would accelerate growth, but it would also mean that subscriptions would have to at least double to just stay even.

This might sound far-fetched on the surface, but the fact of the matter is that there's only around 20 million paying subscribers globally for all services at the moment, so doubling the growth seems like a no-brainer.

That said, the general thought is that we'll reach 100 million subscribes with a few years anyway, and that's with the current model of $10 per month.

Then again, apple has more than 500 million credit cards on file on their iTunes stores worldwide. It seems like they're pretty sure that they can do some steep conversion at that lower $5 price. Hard to say which is the better way to go right now, but getting the labels to give in on this is certainly going to be an uphill climb.


Peax said...

Well I guess even if there will be 100 million subscribers it´ll only do good to those who are famous enough. I think to devaluate music is not the right way to go, It´ll be hell for indie artist because they gotta raise more fans to listen to their music because their music is not "worth" enough. This will just lead to a public oppinion that music should be free, it´ll be a consumptional item that gets compared to tv or the internet itself and we´re at a point were you could almost say that if this artist costs more then..., well… F him there are 30 other artists that just sound like him why pay more for his music? we measure things not just of their meaning or quality but subconsciously also of off their price, because capitalism is how most of this world works, so why devaluate our own product? music is great and one of the most important arts today so please don´t make it worse for those who don´t have the good fortune of a major label doing most of the work for them. oh and don´t tell me you only make money from shows and merch because that´s a cause of the mistakes made earlier in this business and doesn´t mean it can´t be fixed said...

To demean and so egregiously disrespect the total amount of blood, sweat and tears of cooperative work that goes into the creation, recording, production and marketing of just one song by selling it for a paltry .99 cents is a slap in the face to creative artists, musicians, etc. everywhere.

It just proves how ridiculous the modern music business has become and succumbed to stooping so low, never able to catch up from giant past mistakes on not capitalizing from digital music in the first place years ago.

Napster was the writing on the wall and the music business dropped the ball...


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