Apple Offers Indie Labels .13 Cents Per Play on iTunes Radio

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Apple is offering independent music labels US$0.0013 every time a song is played and 15 percent of advertising revenue if they sign contracts for its iTunes Radio music streaming service. The deal would give independent labels a better deal than they currently have through Pandora, and Apple's offer gets even better if they stick around for a second year.

Apple beats Pandora streaming deals for Indie record labelsApple beats Pandora streaming deals for Indie record labels

Second year deals include $0.014 per play and 19 percent of ad revenue. In comparison, Pandora gives record labels $0.0012 per play on its music streaming service.

As part of the deal, Apple won't have to pay royalties on some songs that are already in user's iTunes libraries, according to the Wall Street Journal, or for some songs that are in partial albums user's already own. Apple also won't have to pay royalties on tracks where listeners skip before hitting the 20 second mark, and tracks played as part of special promotions are royalty-free, too.

iTunes Radio is Apple's own online music streaming service. The company unveiled the service during the keynote presentation at its annual World Wide Developer Conference earlier this month. iTunes Radio will be free with ads, or ad-free for iTunes Match subscribers.

Sources also said the deals Apple is offering independent record labels are similar to the contracts the company signed with Sony Music Entertainment, Universal Music Group, and Warner Music Group.

Apple hasn't publicly confirmed the terms of the deals it is offering any of the record labels, but if the WSJ's sources are correct, it looks like Apple is aggressively trying to get more content on board before iOS 7 launches this fall.

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If Apple wants to seriously compete in the online music streaming game it needs to make agressive deals to have plenty of content for subscribers, and it looks like that's exactly what the company is doing.

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Huh. Where does Apple get that 13-14 cents per song?

It’s not from ad revenue, because they’re also giving a percentage of ad revenue.  According to Apple’s site, iTunes Radio is free and if you have iTunes Match (subscription service) then it’s ad free as well.

A Wall Street Journal article about these terms suggests it could be getting money from customers who are encouraged to buy more songs and from hardware sales.

So, iTunes Radio operates at a loss in order to sell more iTunes content and hardware?

Nathan Hart

The point of the article is still valid, because apple is paying them better than some other services, but…

It isn’t 13 cents per song. It is 0.13 cents per song. As in not a penny per play. Still a hundredth of a cent better than pandora, but much lower than 13 cents per song. Just wanted to point to a needed correction.


Most of the numbers in the article are off by a order of magnitude.

Apple is offering $0.0013 + percentage of ad revenue vs pandora’s $0.0012 per play.


The tweet I followed here is still missing the decimal point. I was pretty shocked when I saw the tweet; seemed like Apple was going to burn through some of its cash hoard to support indie music!


@ilikeimac - If you followed @MacObserver the tweet says “.13 cents.”

and who listens to indie music anyway? smile


@ctopher It still says “13 cents” (no decimal point), but they may eventually delete that tweet and tweet a correct one. Here’s the one I’m looking at. I even checked the page source to make sure I wasn’t the victim of some browser rendering bug.

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