Apple’s streaming music service is coming to a device near you at the end of this month, since it’s likely that there’s some kind of device with iTunes on it near you right now. Yet while Apple is promising musicians over 70% of the revenue from the service as royalties, that also means musicians will get around 70% of nothing for the first three months of Apple Music, since the service will be free to users.
Re/code reports that the royalty rate, which is divided between the publishers of songs and the owners of recordings, will vary according to customers’ geographic location: in the United States, it will be 71.5%, and averaging out slightly higher outside of the United States.
Apple will not have an ad-supported tier, as their main competitor Spotify does, which is part of the company’s sales pitch to music labels. They’re giving out slightly higher royalty rates to make up for the longer free trials, and making sure that music labels know that the service will be subscription-based only.
Will having their software on hundreds of millions of devices worldwide be enough to beat Spotify, which claims to have 20 million paying subscribers worldwide? We’ll find out at the end of September, when the first Apple Music free trials end.
Here’s What Happens to Your $10 After You Pay for a Month of Apple Music [Re/code]
by Laura Northrup via Consumerist