Apple's iTunes Radio Terms With Record Labels Revealed

The Wall Street Journal is reporting that Apple sent its iTunes Radio terms to independent record labels last week and the paper was able to review a copy of the contract. It dictates that Apple will pay record labels both in royalties on individual song plays, as well as how much advertising Apple is able to sell.

During iTunes Radio’s first year, Apple will pay a label 0.13 cents each time a song is played, as well as 15% of net advertising revenue, proportionate to a given label’s share of the music played on iTunes. In the second year, that bumps up to 0.14 cents per listen, plus 19% of ad revenue.

That's compared to the 0.12 cents -- $0.0012 -- that Pandora pays labels per play, although the paper says Apple will be paying publishers more than twice as much in royalties than Pandora. For streaming music, publishers and record labels are paid independently.

There are also restrictions in place that allow Apple to not pay royalties. Some song plays are unpaid if they are already in a listener's iTunes library or part of an album they own, tracks selected by iTunes for special promotion, or if listeners skip a song before the 20 second mark. However, Apple can only avoid royalties for two songs per hour per user.

itunes radio
And while these terms were sent out to independent music labels, the WSJ claims they are similar to the terms major labels like Universal Music Group and Warner Music have signed.

Apple doesn't expect iTunes Radio to generate much ad revenue, but hopes it will drive iTunes sales and help sell more iPhones, iPods and other Apple hardware. The company does hope it can help grow the iAd mobile advertising platform.

Finally, the paper says the terms include "several references to terms for the use of music in talk, weather, sports and news programming" on iTunes Radio and that Apple wouldn't have to pay royalties on music snippets used in those types of programming.

The WSJ believes it is "unlikely Apple will invest much in creating such programming, given that it has long shied from creating its own content".

The details offer a look into the terms long debated in the negotiation process between Apple and music labels. Apple reportedly agreed to higher royalty rates in early April, and then signed deals with the major labels in time to announce the new service at the Worldwide Developers Conference in early June.

Top Rated Comments

singhjeet29 Avatar
102 months ago
Still don't see a point in Apple duplicating what Pandora already does so well.

Also, can someone please take iAd out back and shoot it?

...
Apple doesn't expect iTunes Radio to generate much ad revenue, but hopes it will drive iTunes sales and help sell more iPhones, iPods and other Apple hardware. The company does hope it can help grow the iAd mobile advertising platform.

This will reach more people than Pandora has ever had, overnight. And the music industry wants that.
Score: 21 Votes (Like | Disagree)
imgonephishin Avatar
102 months ago
Everytime someone plays a song on these phony radio/spotify services, the artist makes about a cent.
That's pretty impressive given that the streaming companies are only paying the labels about one tenth of one cent per song.

Why not just pay for your music.
And who are you to tell other people how they would like to listen to their music? If people prefer listening to streaming radio, they'll do so. Markets will respond and the contracts will be hammered out. It's just the way the world works.
Score: 15 Votes (Like | Disagree)
Sky Blue Avatar
102 months ago
i like iTunes Radio, much easier to use than Pandora. No ads for iTunes Match customers too!
Score: 15 Votes (Like | Disagree)
basesloaded190 Avatar
102 months ago
Why not just pay for your music. Everytime someone plays a song on these phony radio/spotify services, the artist makes about a cent.
Some one will definitely find a way to remove the ads.

Or we could all go back to stealing music if you'd like?
Score: 8 Votes (Like | Disagree)
ZeRoLiMiT Avatar
102 months ago
Apple is not getting as much as Pandora but how many people will switch to iTunes radio for $25.00 a year for iTunes Match + iTunes Radio or pay $4.00 a month for pandora? I bet A LOT of people are going to switch I know I did and a lot of people I know will be doing the same.
Score: 5 Votes (Like | Disagree)
levitynyc Avatar
102 months ago
Still don't see a point in Apple duplicating what Pandora already does so well.

Also, can someone please take iAd out back and shoot it?
Score: 5 Votes (Like | Disagree)

Top Stories

flat imac 3d 3 teal

Reliable Leaker Hints Redesigned Colorful iMac to Debut at 'Spring Loaded' Event

Saturday April 17, 2021 4:43 am PDT by
Reliable leaker known as l0vetodream has hinted that Apple may debut its rumored redesigned and colorful iMac at its "Spring Loaded" event on Tuesday, April 20. In a tweet, the leaker posted an image of Apple's logo used for marketing the upcoming event and an image of the retro rainbow Apple logo alongside the colorful lineup of G3 iMacs. Apple leaker Jon Prosser previously reported that...
third gen Apple pencil leaked video

Video of Alleged Third-Generation Apple Pencil Leaks Ahead of Apple Event

Friday April 16, 2021 6:13 am PDT by
A video purporting to be of the third-generation Apple Pencil has today been shared online, showing a glossy finish that mirrors previous leaks. New ✏️ ready to 🚢 #AppleEvent @TommyBo50387266 pic.twitter.com/s4RCDwDi5M— 漢尼斯·拉斯納 🇨🇳 (@ileakeer) April 16, 2021 The brief video from Twitter account @ileakeer, spotted by 9to5Mac, shows an Apple Pencil with a glossy finish much like the...
important battery message iphone 11

Some iPhone 11 Users Seeing Increased Battery Health Percentages After iOS 14.5 Recalibration Process

Friday April 16, 2021 6:32 am PDT by
In the sixth beta of iOS 14.5, Apple introduced a recalibration process for the battery health reporting system on the iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max to address inaccurate battery health estimates for some users. Apple said this process might take a few weeks to be completed, and now that two weeks have passed since the sixth beta of iOS 14.5 was released, some users are...
apple event particularly innovative article

Gurman: Apple's 'Spring Loaded' Event Won't Feature Anything 'Particularly Innovative'

Thursday April 15, 2021 1:30 am PDT by
Bloomberg's highly-respected Mark Gurman says that he expects nothing "particularly innovative" or "extraordinary" to launch at Apple's "Spring Loaded" event next week, Tuesday, April 20. Gurman made the remarks during an interview for Bloomberg Technology, in which he reaffirmed that Apple will launch a new 11-inch and 12.9-inch iPad Pro, with the higher-end model featuring a brand new...
Top Stories 57 Feature

Top Stories: Apple Event Next Tuesday, Mini-LED iPad Pro, iPhone Rumors

Saturday April 17, 2021 6:00 am PDT by
It feels like we've been waiting forever for new Apple products, but the wait is almost over as Apple has announced a media event for next Tuesday, so make sure to tune into MacRumors for full coverage of everything Apple announces. While that was the big news this week, we also got some new details on Apple's iPhone plans for 2022 and 2023 courtesy of analyst Ming-Chi Kuo, and we also saw...
apple event spring loaded

Apple's 'Spring Loaded' Event Officially Announced for Tuesday, April 20

Tuesday April 13, 2021 9:04 am PDT by
Following an overnight leak by Siri, Apple today officially announced that it will be holding a special "Spring Loaded" event on Tuesday, April 20 at 10:00 a.m. Pacific Time at the Steve Jobs Theater on the Apple Park campus in Cupertino, California. As with all of Apple's 2020 events, the April 2021 event will be a digital-only gathering with no members of the media invited to attend in...
maxresdefault

Hands-On With Anker's MagSafe-Compatible Battery Pack

Thursday April 15, 2021 9:39 am PDT by
Anker, a company known for its range of accessories designed for Apple products, recently came out with one of the first MagSafe-compatible battery packs, so we thought we'd check it out to see how it compares to a standard battery pack. Subscribe to the MacRumors YouTube channel for more videos. Design wise, Anker's power bank looks like a typical battery pack, but it has magnets built in...
iphone 13 pro max cads eap

iPhone 13 Series CAD Leaks Reveal Larger Camera Dimensions

Friday April 16, 2021 1:53 am PDT by
Information and alleged CADs of the upcoming iPhone 13 series, shared in a video from EverythingApplePro, indicates that Apple plans to make this year's iPhone camera module significantly bigger, likely to make way for larger sensors and sensor-shift stabilization. According to the CADs shared in the video, the iPhone 13 mini, Pro, and Pro Max camera module will all be a "perfect square."...
jaguar car homekit

User Adds Car to HomeKit for In-App Controls and Automations, Showing Future Potential

Thursday April 15, 2021 6:17 am PDT by
Blogger Siobhán Ellis has successfully integrated their electric car into their Apple HomeKit setup, adding in-app toggles for door locking, climate control, and more. The setup, which is outlined in detail on the blog Practical HomeKit, allows multiple elements of a Jaguar I-Pace electric vehicle to be monitored, controlled, and automated using the Home app. Using a HomeBridge plugin for ...
siir apple event april 20

Siri Reveals Apple Event Planned for Tuesday, April 20

Tuesday April 13, 2021 12:04 am PDT by
Siri has apparently prematurely revealed that Apple plans to hold an event on Tuesday, April 20, where the company is expected to reveal brand new iPad Pro models and possibly its long-awaited AirTags trackers. Subscribe to the MacRumors YouTube channel for more videos. Upon being asked "When is the next Apple Event," Siri is currently responding with, "The special event is on Tuesday, April...