Apple Inc. (NASDAQ:AAPL) is still haggling with record labels with hardly days left for the WWDC (World Wide Developers Conference) where it plans to launch a new music streaming service. The labels are trying to obtain better rates than the existing ones they have with Spotify, a rival streaming service, as per sources privy to the negotiations.
Both parties desire to clinch a deal prior to Apple’s June 8, 2015 WWDC in San Francisco, according to sources requesting anonymity. The upsurge of streaming music and TV has upped the ante for media firms. Record labels and TV networks are attempting to clinch deals in order to get a sizable portion of that growth. Apple’s vision is to be the entertainment sector’s numero uno partner ahead of the likes of Netflix, Inc. (NASDAQ:NFLX), Spotify and others.
The music labels get 55% of Spotify’s monthly $9.99 subscription fee while publishers get around 15%. Labels are looking at around 60% as far as the deal with Apple is concerned. Apple revolutionized the music industry over a decade back by hawking individual songs online. Also it was instrumental in many artists achieving stardom by leveraging its Itune service and having them participate in promotions and commercials.
Earlier there was speculation that Apple was looking towards an agreement to offer a streaming music services for $7.99 a month for subscribers. However, record labels opposed the move forcing Apple to relent.
There are rumors Apple is pushing music labels to stop offering licenses for freemium tiers provided by Spotify and miscellaneous music services. The industry giant is not interested in provide a free tier along its new streaming service. As a result the European Commission as well as the US Department of Justice have Apple under the scanner.
Other plans of Apple include providing exclusive stuff such as behind the scenes videos from recording sessions. Artists will have dedicated pages to showcase videos, music and other stuff without charge. The artists and labels will be compensated by Apple for the songs they disburse.
Sources: bloomberg, macrumors
