iTunes Radio: Apple to Pay Higher Royalties Than Pandora, Also looks to Smaller Labels

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Apple’s iTunes Radio is on its way to release with iOS 7. The Cupertino company is making sure it can reach out to both listeners and labels by increasing royalties, and making friends with the independent labels.

According to the Wall Street Journal, Apple plans to pay labels 13 cents for each song play, plus 15 percent of advertising revenue, which it says will be proportionate to each label’s share of music played. This amount will increase to 14 cents per listen, and 19 percent ad revenue. The journal says that Pandora pays 12 cents per play.

Here’s some more on that:

Apple won’t have to pay royalties for some performances of songs that are already in listeners’ iTunes libraries, or songs that might be on an album that a listener owns just part of. Similarly, “Heat Seeker” tracks selected by iTunes for special promotions, are also exempted. Apple also doesn’t have to pay for songs listeners skip before 20 seconds have elapsed. The company only gets to avoid paying royalties for two songs per hour for any given user.

Interestingly, independent labels will be treated similarly to the bigger labels, giving them more reason to join, and meaning that listeners of less mainstream music will also have something that appeals to them.

 

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