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Publishers hold up Apple’s streaming launch plans

By | Published on Thursday 23 May 2013

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The music publishers are still holding out for a better deal from Apple’s planned streaming service, or so says The Verge, which might further delay any launch, even if the Sony record company follows Universal Music’s lead and licenses the tech giant its recordings catalogue for the long anticipated streaming venture.

There were reports last October that it was Sony’s music publishing business, Sony/ATV, that had raised the most concerns about Apple’s move into the streaming space, and especially the rates it was proposing to pay, which were less than those paid by existing streaming music providers, mainly on the basis that the Apple streaming platform would also upsell downloads. In its negotiations with the record companies it’s thought Apple eventually increased its offer, but it’s not known if that has happened on the publishing side.

The Verge reckons that BMG, one of the bigger independents in the music publishing domain, is now also pushing for better rates for the publishers. It adds that this is part of a general trend on the songs side of the industry, where music publishing execs are getting increasingly tetchy about how much more money is paid to the owners of sound recording rights than to the owners of song rights, a discrepancy inherited from the CD age but which, some publishers say, makes less sense as you move into digital, and especially streaming.

As previously reported, to date the music publishers have licensed many of their digital rights in many territories via their collecting societies, whereas the record companies have tended to do direct deals, which usually results in higher advances and royalty rates, especially for the big rights owners. But both Sony/ATV and Universal Music Publishing are now taking back some of their digital rights, especially in the US, and that can only mean they are looking for better rates.

Of course whether the digital service providers, even Apple, can afford to pay any more to rights owners overall is debatable, especially in the streaming domain where profit margins are already very tight. Which might result in that glorious situation where the royalty pot remains the same, but publishers and record labels get to argue about their respective share of the loot, which is always fun to watch, especially given how many music rights companies own both sound recoding and music publishing businesses, meaning they are basically arguing with themselves.

But what does this mean for Apple and that service which people like to dub iRadio? Well, insiders seem to think none of this will stop the service launching, but could further delay a launch date, making any big announcement at next month’s Apple’s Worldwide Developers Conference unlikely.

The Verge quotes one music industry exec thus: “Apple should have anticipated that it might run into trouble with the publishers. In September 2010, Apple was set to roll out 90 second song samples at one of the company’s media events but had to shelve them at the last minute. The National Music Publishers’ Association got wind of the deal and sent Apple a nasty note informing managers that if it went live without licenses it would be violating their rights. Apple’s longer song samples finally made their debut three months later. If that kind of delay happens again, an iRadio launch next month at Apple’s WWDC seems unlikely”.



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