Apple’s much rumored iTunes Radio a.k.a “iRadio” service was unveiled at WWDC 2013. The company’s licensing terms with record labels for the new music streaming service have now been detailed in a new report.
The Wall Street Journal reports that Apple has sent out a copy of these terms to independent record labels, and it has been able to obtain one such copy. While Apple’s licensing terms with major record labels like Sony and Warner Music aren’t exactly the same, they’re said to be somewhat identical to the terms for independent labels.
According to the report, Apple will pay independent labels 0.13 cents every time a song is played in the first year of iTunes Radio. The labels will also get 15 percent of net advertising revenue, proportionate to how frequently that label’s music is played on the service. In iTunes Radio’s second year, Apple will pay independent labels 0.14 cents per listen and 19 percent of the net advertising revenue. To put things in perspective, Pandora pays 0.12 cents to labels each time a song is played, this comparison is apt because there are quite a few similarities in Pandora and Apple’s nascent music streaming service.
Apple is also reportedly paying twice in royalties to publishers than Pandora. As far as the major labels are concerned, their terms are apparently similar to these, save for the fact that they are expected to receive cash advances against future royalties. Apple won’t have to pay labels anything if a user skips a song before it hits 20 seconds, it won’t pay royalties for songs that are already in a user’s iTunes library, though only two songs per hour are eligible for this.
Apple itself has decline to comment whether these are indeed the licensing terms it has agreed upon with major and independent music labels.