Apple wants to pay artists more, which could hurt Spotify

Now that it seems that iPhone sales have reached their peak, although they should not stop innovating in their smartphone, Apple is focusing a significant part of its resources on its services. The App Store or Apple Music are two of those services that help the people of Cupertino maintain their profits and that is one of the reasons why they bet so much on Apple Music. The last movement was a proposal to artists to charge more for reproductions of its contents.

The proposal, submitted to the US Copyright Royalty Board, as we read on Billboard, calls for a simplified way to pay songwriters and music publishers whose content is streamed. Undoubtedly, the change would benefit artists, publishers and labels, but it is not certain that it will be positive for Spotifya service that has many users who do not pay for it and which depends, in part, on the advertising that these users listen to.

Artists would be the main beneficiaries of Apple's proposal

Under the current system, companies that offer a streaming music service they pay songwriters and publishers between 10.5% and 12% of their earnings in what Billboard calls a “complex formula.” The money is divided into plays and mechanical royalties, then paid to publishers and « collecting societies. » Apple's proposal is that artists, record labels and music publishers charge 9.1 cents per 100 views, which would practically be like buying a song. The problem is that other services such as the aforementioned Spotify or YouTube would also have to pay these fees, forcing them to change their business model to be able to pay artists.

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Apple and other streaming content providers do not have to pay publishers the legal fees set by the Royalty Commission because they can negotiate their own deals, but negotiations between publishers and streaming services would begin at some point different if the apple proposal it becomes the norm.

Is it good for users? Certainly not. Or not at first. If something avoid competition, users have no options and neither services nor prices will improve. What is clear is that if the proposal becomes reality, the most affected are users who do not pay for any streaming music service. Are you among them?