Apple’s ongoing campaign to expand into new markets has reached another major milestone, following reports of a lucrative deal between Apple and Warner Music Group.
According to Bloomberg, Apple has signed a song deal with Warner Music that has secured the digital giant a catalogue that includes songs from some of the biggest names in music, including Ed Sheeran, Bruno Mars, and the Red Hot Chili Peppers – rejoice Apple Music users! This news comes shortly after the announcement of a similar deal with Spotify. Apple’s signing of this songs deal represents its first agreement with one of music’s major since it launched its streaming service in 2015.
Similar to the Spotify deal, Apple is said to be negotiating a lower percentage of sales with record producers. In the past the company had to pay labels a 58% share, but this has reportedly now been reduced to 55%. This comes as something of an about turn from major labels, who have have expressed their dissatisfaction regarding royalties received from digital companies such as YouTube in the past. In light of digital’s meteoric growth, however, large digital firms have simply become too powerful and influential to ignore.
Growing sales that have come as a result of streaming is undoubtedly a key factor behind why major record labels have decided to discuss music licensing deals with Facebook for user-generated video recordings. Following the Warner Music Group deal.
In a fast-changing marketplace, digital technology giants and music rights holders are collaborating on the development of a framework around which groups can share the benefits from on-demand streaming. Major labels – the holders of music rights – are increasingly willing to accept lower royalties and a smaller share of sales, on the condition that digital platforms continue to expand their subscriber base.
Apple could well target Sony Music Enterprises next, which is of course the home of Elvis, Michael Jackson and Justin Timberlake.