After the launch of the Apple Music, in mid-2015, the trend is that Apple's user base will stop buying music from the iTunes Store and start subscribing to its music service. streaming of music. Not surprisingly, since then, without offering any free business model (based on advertising) in the service, the company already collects more than 20 million users. It is natural, then, that over the months Apple wants to renegotiate its agreements with record companies in order to balance these finances: the more subscribers playing music, the lower the individual amount passed on by Apple to its partners since the amount, of generally speaking, it increases.
That's exactly what Apple has done now with the Warner Music Group, as informed by Bloomberg. This is the first agreement signed after the birth of Apple Music with the musical group. Also according to the vehicle, Apple also pushed the WMG for a reduction after Spotify achieved a tariff reduction earlier this year.
Apple until then paid 58% of royalties, a rate higher than that of Spotify historically, Apple has always paid more for publishers than your biggest rival. Now, however, Apple pays 55%, a percentage that could decrease even more if the company manages to reach a certain goal of subscribers. Even with the reduction, the numbers are better than those of Spotify comparatively, the Swedish service was paying royalties about 55% over the amount collected from its paid subscribers; in renegotiation, this percentage dropped to 52% (although the rate cut depends on the performance of certain performance metrics).
Sony Music Entertainment, owner of the second largest record company, is also negotiating a new deal with Ma; the company's conversations with Universal Music Group are a little further away and there is no agreement to be sealed at least not yet, but these new contracts will undoubtedly serve as a basis for future conversation.