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Apple Music label agreements revealed

by Jacob Kleinman | June 15, 2015June 15, 2015 6:00 pm PDT

Apple Music won’t actually launch for a couple more weeks, but a new report reveals how the Cupertino company plans to share its profits with the music industry. Speaking to Re/code, Apple exec Robert Kondrk confirmed the firm will pass 71.5 percent of its subscription fees in the U.S. along to record labels.

Outside of America that number changes slightly, though the global average payout is somewhere around 73 percent. As for Apple Music’s free three-month trial, record labels won’t make any money off those first three months. It’s also unclear how much the company will pay for free streaming through iTunes Radio and its new Beats 1 station.

By comparison, Spotify says it pays roughly 70 percent royalties back to record labels for every stream, regardless of whether it comes from a paying customer or not. Apple offers a slightly better deal though, and Spotify’s free streaming service has never been much of a moneymaker anyway. Instead, it mostly serves as a way to bring in new customers who may eventually switch over to the paid version.

With Apple Music set to launch at the end of the month, it won’t be long before Spotify has a tough new competitor to deal with. The Swedish streaming giant is also expected to lower its family deal prices to match Apple, though there’s no word on when that will actually happen.

Re/code

Jacob Kleinman

Jacob Kleinman has been working as a journalist online and in print since he arrived at Wesleyan University in 2007. After graduating, he took a...

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