In light of Apple Music’s recent changes in royalty payouts, some independent record labels are pushing back against the streaming platform’s implementation of higher royalty shares for artists who utilize Spatial Audio.
The dispute between indie record labels and Apple Music revolves around the intricacies of the proposed royalty boost for tracks available in Spatial Audio, wherein the reported 10% increase is causing concern among indie labels as it seems to extract funds from a fixed pool, affecting those not participating in the immersive sound format. Beggars Group, Secretly, and Partisan Records express reservations, arguing that the model disproportionately benefits major players, potentially leading to a significant loss in revenue for independent labels.
Financial challenges have risen from this situation, with executives revealing that producing tracks in Spatial Audio incurs an additional cost of $1,000 per track or around $10,000 per album. For labels like Beggars, with an extensive catalog, this could amount to a substantial financial burden, prompting a reassessment of the proposed changes. Despite Apple’s reported assistance in covering some costs associated with Spatial Audio, indie label executives argue it falls short of addressing their concerns.
Currently, indie labels are now engaged in discussions with Apple –– seeking adjustments and amendments to the policy. If these negotiations prove unsuccessful, the possibility of exploring legal or regulatory avenues is on the table, according to sources familiar with the matter. The financial impact of producing tracks in Spatial Audio and concerns over a redistribution of funds have intensified the debate between indie labels and Apple, highlighting the challenges within the evolving landscape of streaming services and immersive audio technologies.