Apple wants to simplify payment of musical royalties; Spotify could be the big loser

The war between Apple and Spotify to be continued. While the leader of the streaming musical tried to carry out public attacks, Ma (who currently has half of Spotify's subscribers preferred to act behind the scenes.

Both the The New York Times as for Billboard managed to get their hands on a proposal sent by Apple Copyright Royalty Board (something like the Copyright Commission) from the United States in which Ma tries to simplify the payment of royalties connected to streaming of music.

Apple Music running on an iPad

The Cupertino firm’s idea is to convince the three federal judges who oversee this matter in the U.S. that services should pay 9.1 cents for every 100 times a song is played or $ 0.00091 per streaming. Briefly, every 100 times a song was played on Apple Music, Spotify or TIDAL to name just a few examples of services would be equivalent to royalties generated by selling a song on the iTunes Store. Such a formula would replace all the bureaucracy that currently exists in this business model.

Simplifying something has everything to do with the core of Apple, but here, it seems that the shot has a certain destination. This is because, if the idea is accepted, it would make life very difficult for Spotify's free business model (based on advertising). Currently, onlending from Spotify (and other services such as YouTube itself) is governed by complex calculations of percentages over revenue between 10.5% and 12%; but as these free advertising-based services don't generate a lot of revenue, the pass-through ends up being low. In Apple's proposal this simply would not exist as the values ​​would be fixed (the royalties paid by Spotify would be the same in the free and paid versions).

It is worth making it clear, however, that Apple and other industry giants do not pay royalties for major record labels taking into account this legal fee set by the Copyright Royalty Board. In such cases, everything is negotiated directly between the parties. The amount fixed by the commission used, yes, for payments of royalties The publishers which cannot be traded directly. Still, if Apple's proposal is approved, it will undoubtedly shape these future direct negotiations.

But none of that for now. The proposal will still be analyzed by the judges and, if accepted, will be valid from 2018 to 2022. Others, however (such as Spotify, Google, Pandora, Amazon and the Recording Industry Association of America), must also submit their proposals to be analyzed.

(via MacRumors, The Verge)