Apple had reportedly been working on an all-encompassing subscription for its users that would bundle access to Apple Music, Apple TV+ and News+ under a single payment. The date floating around was 2020 but the music industry may derail these plans.
The company secured deals that extend over many years with a multitude of record labels such as Universal Music, Sony Music and Warner Music. The company thus continues to stream popular artists for its users. This includes huge names such as Taylor Swift, Mariah Carey, Kendrick Lamar and Blake Shelton. However for the company to club its services, certain economic agreements have to be included in these contracts.
The absence of these agreements circumvents Apple Music from being bundled with other services. A proposal for these agreements has been put forward by the company but negotiations are still in motion.
Apple has secured similar deals in other sectors, such as media for its News+ service, however things are a bit different when it comes to music labels. In the case of magazine and newspaper publishers, the deal would mean less amount of money per subscriber than they currently receive. Apple presently charges $9.99 per month for News+. 50% of this revenue once collected is distributed among all publishers that are part of this service according to how much of their content is read and engaged with.
Music labels may be anxious about something similar. Apple Music splits 71.5% of its revenue among its record labels in the U.S. A combined subscription may lead to a fluctuation in this arrangement which is why the two sides of the discussion are yet to settle on the details of the combined subscription.
Streaming services like Apple Music regularly renegotiate multiyear contracts to hash out streaming rights and royalty agreements. While Apple Music has secured multiyear agreements with a host of record labels, locking down contracts has proved to be a challenge for its competitor Spotify. Still “locked” in licencing talks with multiple labels, the company’s high stake negotiations with record labels are still in motion.
Spotify boasts of 124 Million paid subscribers worldwide in comparison to Apple Music’s subscriber count of 64 Million. Apple Music however, remains dominant in the U.S. The service sector of a company which has been labelled a revenue driver, has raked Apple up to $46.3 Billion, up from less than $30 billion in 2017.