Now Apple wants to reduce royalty rate it pays record labels

Last year, MBW broke the news that Spotify was trying to negotiate the royalty rate it paid record labels down from 55% of revenue closer towards 50%.

After two years of negotiations, the streaming platform finally reached a new long-term licensing deal with Universal Music Group in April.

Universal agreed to a smaller revenue share – believed to be around 52% – but Spotify in turn agreed to be pegged to subscriber growth targets, as well as offering other benefits.

To put that into context, 1% of Spotify’s revenue last year equated to approximately €29m ($33m) – so an industry-wide dip from a 55% to a 52% rev share would prospectively save Spotify somewhere near $100m annually.

Now Apple is believed to be on a similar mission.

Source: www.musicbusinessworldwide.com

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