Apple Music Spatial Audio Royalties Only Benefit the Biggest Companies, Say Indie Record Labels

Independent record labels have expressed concerns about Apple's plans to pay more money for songs recorded in Spatial Audio, claiming it will only benefit the biggest companies in the marketplace, reports the Financial Times.

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Last week, Apple announced royalty incentives to encourage music artists and record labels to publish tracks in Spatial Audio. Apple said it will pay up to 10% more in royalties for Spatial Audio, which uses Dolby Atmos technology to replicate an in-person music experience with sound coming from various directions around the listener.

Apple has said that over half of Apple Music subscribers use the feature, and that the bonus is a reward for artists delivering the content, and also compensation to recognize the additional time and effort required to mix in Dolby Atmos.

However, several independent labels told FT that the new incentive will effectively channel cash towards established megastars and away from other musicians who do not have the resources to compete.

"It's literally going to take the money out of independent labels and their artists, to benefit the biggest companies in the marketplace," said a senior executive at a large independent record company.

"It's going to benefit the biggest player, Universal, because they're the ones with the resources to invest in that. Whereas the independent sector . . . we've found it hard to justify the expense of creating spatial masters . . . we're not in the business of chucking money just because Apple is saying you should be spending money on this."

Another independent label told FT that the new deal will badly impact its revenues.

Producing music in Spatial Audio is not cheap. Executives say it costs an extra $1,000 per song, or roughly $10,000 per album, and going back to remaster older tracks can double the costs. Some record executives have also questioned the artistic value of Spatial Audio, with one executive likening it to "hanging a digital 3D version of the 'Mona Lisa' and expecting Louvre patrons to prefer it."

Indie labels say they hope to work with Apple to make changes to the new policy. If those negotiations fail, they would explore legal or regulatory options, said people familiar with the matter who spoke to FT.

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Top Rated Comments

ersan191 Avatar
19 weeks ago
It sounds like it's a bonus for doing something that costs more to produce, nobody is making them do it. They can just not do it and make the same money as before. Am I missing something here?
Score: 30 Votes (Like | Disagree)
neuropsychguy Avatar
19 weeks ago
How can it hurt the independent labels? Apple is not requiring all songs to be mastered in Spatial Audio. If so, that would hurt the independent labels. Apple is merely offering more money for Spatial Audio tracks. If songs are not in Spatial Audio, labels get paid the same rate as before. If the labels want those standard rates higher, negotiate with Apple. If it doesn't make financial sense to do Spatial Audio mastering, don't do it.

This boils down to you (a business) spending more time, effort, and money to get a higher reward. Just because that might be easier for larger labels (economies of scale) and they might see a benefit, doesn't mean that somehow hurts the smaller labels.

This is like someone who does not work overtime hours complaining that they're not getting paid overtime when other people working overtime are getting paid overtime. Something requires more time and effort (and possibly money) and Apple is providing higher compensation for that.

On the other hand, it is possible that long-term smaller labels might lose artists, if the artists are getting more money from the larger labels due to Spatial Audio. However, indie labels tend to pay artists better than the large labels, so this is unlikely to be an issue. That is unless the artist specifically wants tracks in Spatial Audio. In that case, the indie label could offer lower royalties for that artist due to the extra sound engineering costs.

It's a business. Figure it out.
Score: 14 Votes (Like | Disagree)
MrRom92 Avatar
19 weeks ago
As someone who has more insight than most into what actually goes on at both major and independent labels, as well as the top studios on the planet… Spatial Audio is not a scam in the same way certain other audio technologies are (looking at you, MQA) but it may as well be when you consider the tricks and loopholes that are being taken advantage of to provide something that only technically qualifies as “spatial audio” on paper.

Almost no recordings are legitimately mixed for these new Spatial Audio formats. A very, very small minority in the grand scheme of what is actually advertised and on offer. And in the end, the vast majority of it is still only listened to by consumers on stereo equipment anyway, in the end achieving nothing that couldn’t also have been achieved *better* by a standard, competently made stereo mix.

This is by and large a return to the “duophonic” / “electronically reprocessed” fake stereo records that were pushed on us in the 60’s. Time is a flat circle.
Score: 12 Votes (Like | Disagree)
jayducharme Avatar
19 weeks ago
with one executive likening it to "hanging a digital 3D version of the 'Mona Lisa' and expecting Louvre patrons to prefer it."
Smart executive.
Score: 9 Votes (Like | Disagree)
Timo_Existencia Avatar
19 weeks ago

...likening it to "hanging a digital 3D version of the 'Mona Lisa' and expecting Louvre patrons to prefer it."
No, this is like that indie label producer introducing the model for the Mona Lisa, and telling everyone that the painting is better than the person.

If those negotiations fail, they would explore legal or regulatory options, said people familiar with the matter who spoke to FT.
Oh please. So many victims in the world now. Apple has forwarded a technology that many people like, and has offered an incentive to artists to produce it. How is that incentive now an obligation to Apple? You want government to now dictate this aspect of business too?

Indie artists can't afford to record in the most expensive studios, can't pay the best session musicians, can't hire the best producers...should that all be legislated too?

This very whining attitude is very anti-indie, actually.
Score: 9 Votes (Like | Disagree)
matrix07 Avatar
19 weeks ago

It sounds like it's a bonus for doing something that costs more to produce, nobody is making them do it. They can just not do it and make the same money as before. Am I missing something here?
I believe they fear Apple promotion of Spatial Audio will put users to prefer to listen to that and since they can not afford to make their music SA they will get less royalties from less listening.

I mean, just makes music people love to listen. Problem solved. ??‍♂️
Score: 8 Votes (Like | Disagree)