In order to reduce the fees paid at Apple Music, the tech titan has announced its first major licensing deal with a big time music label since Apple launched its streaming music service two years ago.
According to a new report from Bloomberg, the Cupertino giant recently managed to strike a deal with Warner, in which Apple will reportedly pay a lower percentage of sales from Apple Music subscribers than its previous rate. Until now, it’s been paying a 58 percent share to labels, which it’s now slashing to 55 percent.
Although labels have been to quick to voice their anger regarding low royalties from the likes of YouTube, it seems they simply can’t ignore digital services. Especially when they’re seeing growing sales thanks to streams. That may explain why record companies are now talking to Facebook about music licensing deals for user-generated video. Next up for Apple is Sony Music Entertainment, reads the report.
Warner Music Group is the first major music company to reach new, long-term deals with all three of the biggest players in music, Apple, YouTube and Spotify. Universal and Sony have agreements with Spotify, but have yet to sign new deals with YouTube and Apple.
Since its debut in June of 2015, Apple Music has seen steady growth, undoubtedly giving the company an upper hand when negotiating new deals with labels. As of June 2017, the streaming service had 27 million paying subscribers.