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Apple's latest move shows streaming is the main way we listen to music (AAPL)
Apple aims to reduce the revenue cut music labels receive from Apple Music, which is currently 58%
Apple aims to reduce the revenue cut music labels receive from Apple Music, which is currently 58%, according to Bloomberg.
Apple is in talks with Sony Music, Warner Music, and Universal Music — which own the rights to most of Apple Music's songs — as current contracts are expiring soon. Here’s why the news is important:
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Music streaming companies could leverage their scale and the overall consumer shift to music streaming in negotiations with labels. As of December 2016, Apple Music had 20 million subscribers. This is lower than Spotify, which last announced 50 million paid subscribers in March. However, both Apple Music and Spotify account for a large percentage of record labels’ royalties, which makes it increasingly difficult for labels to walk away.
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