Apple Secures Streaming Deal with Warner Music Group for Apple Music at a Lower Rate Than Before

BY Rajesh Pandey

Published 7 Sep 2017

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Apple has reached a new deal with Warner Music Group where it has been able to secure a lower streaming rate than before. Apple’s music streaming agreement with most major labels is on the verge of a renew and it is trying to secure a lower streaming rate than before with them.

The Cupertino company is hoping to pay music labels a smaller percentage of total Apple Music subscription sale than it did the first time around.

Warner will provide Apple a catalog spanning Ed Sheeran, the Red Hot Chili Peppers and Bruno Mars for both iTunes, the online store, and Apple Music, the streaming service. Apple plans to pay record labels a smaller percentage of sales from Apple Music subscribers than it did under its first deal for the streaming service, the people said, asking not to be identified discussing private information.

The company had so far been reported to pay around 58 percent of sales to music labels, which was higher than what Spotify was paying. After Spotify managed to secure a lower rate this year in its agreement of around 52 percent, the Cupertino company is following suit with a reduced rate of 55 percent. The number can go even lower if Apple is able to meet subscription targets. Apple Music so far has around 27 million subscribers.

Apple has already secured a deal at a lower rate with Warner Music Group, with the catalog including Ed Sheeran, Bruno Mars, and the Red Hot Chili Peppers. It is also on the verge of finalizing a deal with Sony Music Entertainment, while a deal with Universal Music Group is further off.

Incidentally, Warner Music Group is the only major record label to have secured streaming deals with three major streaming services: Apple Music, Google’s YouTube, and Spotify. Other labels only have deals with Spotify so far.

[Via Bloomberg]