Apple Raises iTunes Wholesale Payout for Independents

Apple recently raised its wholesale payout on iTunes Music Store downloads to seventy cents per song, offering parity between independent and major labels.

The increase first came to light in a letter sent by Derek Sivers, CEO of independent retailer CD Baby. While different wholesale figures have been floating around since the beginning of the iTunes Music Store launch, one lawyer actively negotiating iTunes deals indicated to Digital Music News that the 70 cents rate falls in line with current major label payouts. That makes the increase a very strong nod to the independent artist community, and will likely attract a larger catalog. Meanwhile, consumer pricing will not change, with each a-la-carte download continuing at 99-cents each.

The move comes after some remarkable accomplishments from the Apple camp. The iTunes Music Store recently crossed the half-a-billion mark, far outdistancing any other competitor in the space. But the big story for Apple is on the hardware end, with the company shifting over 6 million iPods in the last quarter alone. That makes the wholesale increase a savvy competitive move, with the iTunes Music Store essentially a loss-leader for iPod sales. Meanwhile, Apple continues to display its ability to set technological trends, evidenced by a huge increase in podcast subscriptions following the release of iTunes 4.9. The 70 cent payout includes publishing costs, according to the legal source.

Report by news analyst Michael Bloom.