F*&k It: Here’s the Entire iTunes Radio & iTunes Store Contract…

Here’s the complete, non-negotiable contract Apple has been mailing independent labels and artists ahead of the iTunes Radio launch.  It offers complete details on iTunes Store payouts, iTunes Radio per-play rates, and seems to confirm earlier information about forced tying between the iTunes Store and iTunes Radio.  It even delves into specifics about what iTunes Radio will look like.

Just scroll up and down (and enjoy).

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37 Responses

  1. JTV
    JTV

    That’s how it goes usually, yes.

    Message from Apple: updated deal terms are available, click here -> click, done

    There’s no possible discussion / negotiation anyway so…

    Reply
  2. Visitor
    Visitor

    Good for Apple. The music industry practically handed them a music download monopoly on a stick. It has been a while since they abused it and showed music industry execs what it is like to be sacked by the monopoly you helped create.

    Reply
  3. David
    David

    Well, I only skimmed the contract, but as far as I can make out, the iRadio provisions don’t require record companies or artists to agree to anything that is not covered by the statutory licencing system in the United States. Also, the royalty rates proposed are slightly better than those which can be imposed under the statutory system (e.g. those paid by Pandora). If this is right, then Apple is really doing nothing to complain about. They are not abusing their market dominance in the download market to extort agreement to the iRadio service, because they don’t need agreement anyway. (Correct me if I have misunderstood.) The position may be more complicated outside the United States, but I guess that is a secondary issue.

    Reply
    • Correction
      Correction

      David, you’re incorrect. The statutory system requires substantially higher rates: $.0021 per performance in 2012 and they increase each year. So Pandora’s rates are 50% higher than those paid in this deal. What’s more, the service Pandora offers is limited by the rules that govern non-interactive services. We don’t know what iTunes Radio is really going to look like, but the contract allows iTunes to provide on-demand service, like Spotify.

      So iTunes pays lower rates for more flexibility. And for those of you folks who cheer apple for socking it to the industry, remember that the deal you are looking at is for indie labels, not the majors. The indies are getting screwed, and the money they’re being screwed out of is lining the pockets of the majors & apple alike.

      This is how monopolies operate.

      Reply
  4. Visitor
    Visitor

    “the contract allows iTunes to provide on-demand service, like Spotify”

    Where did you see that?

    The only remotely related info I could find (p 42) doesn’t seem to support what you’re saying:

    Skipping: Listeners may be permitted to skip forward up to 6 performances per channel or station in any one hour period.

    …and:

    No rewinding, backward skipping or re-starting will be permitted.

    Reply
  5. Visitor
    Visitor

    True but he’s right that Pandora’s license is far more restrictive (like it limits how many songs from the same artist can be played).

    Reply
    • Visitor
      Visitor

      Not relevant — this is what matters:

      1) Is iTunes Radio mandatory for iTunes artists?

      2) Is iTunes Radio on-demand?

      The jury still seems to be out on #1, but the answer to #2 seems to be no.

      Reply
  6. Visitor
    Visitor

    Nothing how Apple pays less royalties than Pandora? The reality distortion field is strong with this one…

    Reply
  7. Steven Corn (BFM)
    Steven Corn (BFM)

    you need to look at 3(b) called “minimum radio royalty service royalties”. it details floors that make the rates better than pandora. I admit it’s a complex read. but it’s all there.

    Reply
  8. Visitor
    Visitor

    By more you mean 61% less?

    It’s also worth noting that Apple intends to pay the labels directly instead of through SoundExchange, and who knows how much money will actually make it to the artists from there.

    You’ll need to stop spinning this as a good thing.

    Reply
    • David
      David

      Are you sure $.0022 is the rate fixed by the Court? I’ve read in several sources that Pandora pay $.0011 per stream, and I thought that was the fixed rate.

      Reply
      • Jason S
        Jason S

        Pandora is on the Pureplay deal which is half of the regular CRB rates so Pandora is not paying the $0.0021.

        Reply
  9. PanScrewdYa
    PanScrewdYa

    Pandora was given a gift of 50% off the statutory rate until 2015…to help them get off the ground.

    …looks like it wasn’t a good idea, as no good deed goes unpunished…

    Reply
  10. braccinocorto
    braccinocorto

    Actually, in the Apple agreement there’s even a quota coming from the advertising, that sould be added to the per play quota.

    So you can’t compare as you don’t know how much it will be.

    Maybe (most likely) it will be lower than the difference, but you can’t say it in advance.

    Reply
  11. Rusty H
    Rusty H

    Pandora operates under the Pureplay Agreement, not the statutory rate. They’re paying about half the statutory rate now, it goes up a penny a year. I recall it only lasts until 2016 and then has to be renegotiated.

    RATES

    2013 RATE (Syndicated/Bundled/Subscription Services): $0.0022 per performance (per play, per listener; definition on page 88). (Rate Summary, 2011-2015: 2011: $0.0017 (per performance); 2012: $0.0020; 2013: $0.0022; 2014: $0.0023; 2015: $0.0025)

    2013 RATE (Other Services): The greater of 25% of Gross Revenues or $0.00120 per performance. (Rate Summary, 2011: $0.00102 (per performance); 2012: $0.00110; 2013: $0.00120; 2014: $0.00130; 2015: $0.00140)

    2013 MINIMUM FEE: $25,000, due January 31, recoupable to monthly liability.

    http://soundexchangeforms.wordpress.com/2012/12/17/2013-pureplay-webcaster-wsa/

    Reply
  12. JTV Digital
    JTV Digital

    There’s nothing new in the fact that Apple dictate their rules.

    And believe it or not, big labels don’t negotiate the terms that much, they just bend over, it’s Apple, 60% of their digital income….

    Reply
  13. hold on
    hold on

    So, wait, the iTunes distributors will sign this contract and that’s all? No interaction with the artists? No talks with composers, songwriters? Nothing?!

    DMN mentioned AWAL here and they didn’t even bother to respond. So, they silently accept that Apple is their master and they just silently go on with it.

    What the hell happened to the music BUSINESS?

    Seriously. Someone explain this to me.

    Reply
  14. JTV Digital
    JTV Digital

    No interaction with the artists?

    No since there is no direct contractual relationship between artists and digital music retailers.

    Distribution deals are made between artists and their distributor.

    (or in case the artist is signed with a label, between the artist and the label, where the deal includes various things including distribution)

    Then distributors deal directly (or indirectly) with retailers.

    JTV Digital | digital music distribution

    @JTVDigital

    Reply
  15. Vsitor
    Vsitor

    If you are an artist with your own label you can have a direct contract with itunes if you meet an undisclosed sales threshold. I know a few.

    Reply
  16. JTV Digital
    JTV Digital

    Yes, but not any more.

    Or on some very rare occasions only.

    At the beginning Apple signed quite a lot of direct deals but since these direct contractual relationships are un-manageable they now only rely on major/big indie labels and distributors to supply them with new content.

    (For example, in Europe they don’t even sign any new aggregator deals)

    JTV Digital | digital music distribution

    contact us to get 10% off on your Songtrust account

    Reply
  17. hey waiter
    hey waiter

    that’s right! because music sells itself.

    We should get 100% of the gross revenue of everything even remotely associated with music. and that gross revenue should be shared evenly with every artist so that people that make crap music like Beyonce and Justin Bieber Timberlake don’t get to live like queens while I have to go get the fat guy at table 6 another coke. I have been working really hard at my kazoo for the past six months and it is about time that all my hard work pays off.

    Reply
  18. TS
    TS

    Eliminate the middle man, that’s what I would like to see happen. With digital music, the artists do not need the music labels nor the distributors. Sell your music just like apps on the App Store, let the artists set the price and give Apple a standard cut.

    This would break down the enormous barriers for an artist to gain entry to the business and provide the rest of us with even more great music.

    Reply
  19. JTV Digital
    JTV Digital

    No.

    To get his music to iTunes an artist needs to:

    a) Get signed with a record label, the record label handling the distribution

    OR

    b) Go through a digital music distributor

    There are no direct deals made between iTunes and individual artists.

    JTV Digital | digital music distribution

    @JTVDigital

    Reply
  20. Funn Networks
    Funn Networks

    That’s actually part of our plan (i.e.: direct communications etc)! Beside’s finally paying much more.. The state of streaming is a joke. It’s about time to ramp i up.

    Reply
  21. Speedlight
    Speedlight

    I agree. They need to allow the individual to market themselves and remove the middle-man.

    CD Replication | CD Duplication

    Reply
  22. Drainage
    Drainage

    Thanks to the major labels for suuuccccckkkiing it all up.

    Drainage! Drainage, Eli, you boy. Drained dry. I’m so sorry. Here, if you have a milkshake, and I have a milkshake, and I have a straw. There it is, that’s a straw, you see? You watching?. And my straw reaches acroooooooss the room, and starts to drink your milkshake… I… drink… your… milkshake!–

    Movie: There Will Be Blood

    That’s whats up. They suck up all the gold and leave us mingling with the cents.

    OUR SPONSORS

    Reply

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