April 20, 2024

Media Decoder: Deals Move Apple Closer to Streaming Music

Apple has nearly completed its negotiations with the major music publishers over rights for a new cloud music service.

Of the four big publishers, two have signed deals with Apple, and the others will most likely complete their deals in coming days, according to several people involved in the talks.

The agreements will allow Apple to unveil the service at its five-day Worldwide Developers Conference in San Francisco, which begins Monday.

Universal Music Publishing and Sony/ATV, a joint venture between Sony and the estate of Michael Jackson, have completed their deals, these people said. They spoke on condition of anonymity because the deals are confidential.

The publishing division of EMI and Warner/Chappell, owned by the Warner Music Group, are still in talks.

Apple, as well as the labels and publishers, declined to comment.

Publishers, which represent songwriters and control the music and lyrics underlying songs — as opposed to recordings — have been Apple’s last hurdle in setting up its new service, which will allow users to store music files on remote servers and stream or download them over the Internet.

Apple recently closed its deals with the four major record labels. The labels also own the major publishers, but they are operated as separate divisions and sometimes have divergent interests.

Amazon and Google recently introduced cloud music services, but without special licenses from the labels and publishers.

With those licenses, Apple’s system would have some advantages, like being able to instantly scan a user’s iTunes library and match the songs to a master library on Apple’s own servers; with the services of Amazon and Google, users must upload each song, which can take many hours.

In addition, Apple’s service is expected to have features like streaming songs in high-quality audio, even if the version a customer owns is lower quality.

To offer those additional functions, Apple needs licenses from music publishers, because the creation and matching of a master audio library is considered a reproduction, and therefore the owner of the music is owed a royalty. (With the services of Amazon and Google, the music file is treated as a backup, with each user’s songs stored separately.)

On Tuesday, Apple announced that it would be unveiling a program called iCloud at the conference next week, describing it only as a “cloud services offering.”

Analysts and media executives have said that iCloud may offer cloud storage for an array of media, including music, video and photos.

According to several people involved or briefed on the talks, revenue from subscriptions to the service would be divided among Apple, the publishers and the labels, but exactly how that money would be split was unclear. Apple generally keeps 30 percent of such revenue. The publishers had been offered 10.5 percent but were able to negotiate their rate up to 12 percent, these people said.

Whether the 1.5 percent difference would come out of Apple’s share or the labels’ share for the recordings was not known. But the deals are also said to be short-term, and may be superseded when the Copyright Royalty Board, a federal panel, next sets digital royalty rates, a decision that is expected in the next two years.

Article source: http://feeds.nytimes.com/click.phdo?i=0085d1ca3b5c80f78173f36d9d9853ee

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