Warner

Apple's iRadio to reportedly pay Warner Music a royalty rate the same, or higher, than Pandora

Monday, June 3, 2013 - 11:40am

Apple has reportedly taken a step closer to launching its online radio service, by securing licenses from both label group Warner Music and music publisher Warner Chappell. Some observers are still looking for a launch at WWDC (Worldwide Developers Conference), which begins June 10. Earlier reports had indicated that Apple already had a deal with WMG (see RAIN here).

CNet's Paul Sloan writes today, "The deals reached so far offer far better economics for the music labels and publishers than what they get from Pandora, the product that most closely resembles iRadio."

CNet's sources say Apple -- which had been rumored to be getting a discount -- will pay labels and performers the same per-stream rate as Pandora (currently either $.00120 per song per listener or 25% of gross revenue, whichever is higher; more here). Interestingly, Billboard writes, "The agreement with Warner calls for Apple to compensate the company at higher rates than what is currently paid by most Internet radio services such as Pandora... around 0.16 cents ($.00160), similar to the rate Universal Music Group received."

The new service will net publishers "more than twice the ad share revenue they currently receive from Pandora," says CNet. The New York Times writes, "Publishers... paid about 4% of Pandora’s revenue... want as much as 10% from Apple."

Apple apparently will also share ad revenue with labels, and promises a more seemless way to purchase music via iTunes.

Notably, Apple will supposedly be allowed to enable listeners to "rewind" songs (prohibited by the DMCA's statutory license and all current SoundExchange licenses with various classes of webcasters -- see RAIN's royalty round-up here).

Among major labels and publishers, Apple still needs to secure deals with Universal's music publishing arm (the company already has an agreement with Universal Music Group) and both Sony Music and Sony/ATV (publishing) (more in RAIN here).

Read more in CNet here, The New York Times here,  and in Billboard here.

Apple's "iRadio" stalled yet again on royalties

Friday, May 10, 2013 - 12:45pm

The Financial Times reports that Apple's development of its "iRadio" streaming service are caught up by rights negotiations yet again, this time with Sony Music.

Apple reportedly has reached and agreement with Universal Music, and is close to a deal with Warner Music, leaving only Sony among the "big three" label groups.

Though Apple won't verify any details, or that they're even developing such a product, the Financial Times reports:

"These people said that Apple had first offered a royalty of about 6 cents for every 100 tracks it streams, but had raised this to about 12.5 cents, in line with the rate paid by internet-radio service Pandora. But it was unclear whether Universal had accepted the 12.5 cent rate, and other labels are thought to be pushing for better terms."

The paper's sources also suggest Apple has offered to pay for music rights on a per-track royalty, an ad revenue share, and a guaranteed minimum. Read the Financial Times' coverage here.

Warner Music Group made $54 million from streaming services last quarter

Thursday, August 9, 2012 - 1:20pm

Internet radio and on-demand streaming services contributed about $54 million -- or 25% -- of Warner Music Group's recorded music division's digital revenue last quarter. That reportedly amounts to about 8% of Warner’s total revenue for that period, reports AllThingsDigital. (Note, this revenue does not include the licensing paid by cloud/locker services from Apple and Amazon.)

"What’s more encouraging for Warner — and presumably, the rest of the big labels — is that streaming revenue is growing quickly, but doesn’t seem to be cutting into traditional digital sales from outlets like iTunes," writes Peter Kafka. "Just as encouraging: Warner says that after you net out the effect of currency fluctuations, the increase in digital sales was bigger than the decrease in physical sales."

Dare we to even imagine that streaming services like Internet radio might have a promotional benefit to the copyright owners?

Read more in AllThingsDigital here.

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