Indie labels are reportedly criticizing – and signaling their openness to pursuing legal action against – Apple Music’s royalty bump for works made available in spatial audio.
This and a number of additional reports were set in motion by Digital Music News’ October of 2023 exclusive about the change at Apple Music. Multiple months passed before different outlets confirmed our coverage, and at least at the outset, these subsequent reports largely lacked fresh information.
In any event, as we noted the better part of four months back, Apple Music is now paying “a higher royalty value” for spatial audio tracks. Late January saw Billboard elaborate that eligible works would benefit from an up to 10 percent boost on the recorded-royalties side.
But rather than deriving from a separate fund, these heightened Apple Music spatial audio payments are being bankrolled by the core royalties pot under the service’s pro-rata model. As the mentioned indie labels see it, the system is transferring compensation from them (as well as other non-major-label players and artists) to today’s biggest-name companies and acts, who are best positioned to release in spatial audio.
(Estimates have attached a $1,000-per-track ballpark expenditure to mixing in spatial audio. Less frequently discussed but decidedly important are related distribution fees. “Artists can add a Dolby Atmos version of their mix per track for $26.99 each – it will be available on supported devices and streaming services including Apple Music and TIDAL,” reads a relevant page on DistroKid’s website.)
As initially highlighted, Apple’s effort to incentivize spatial audio releases (which remain a cornerstone of its business model and wider hardware-software ecosystem) is reportedly eliciting pushback from the likes of Beggars Group, Secretly Group, and Partisan Records.
According to the Financial Times, these companies recently “expressed concerns about Apple’s policy,” with an anonymous “senior executive at a large independent record company” spelling out the belief that the approach will “‘benefit the biggest player, Universal, because they’re the ones with the resources to invest in that.’”
Meanwhile, unnamed sources also indicated that Apple’s financial assistance in covering some costs associated with certain spatial audio projects won’t solve the problem – especially when it comes to multi-thousand-track back catalogs.
And with different parties yet having questioned the actual artistic worth of spatial audio, execs intend to try and coordinate with Apple to secure the sought policy changes. Should the undertaking fail to bring about the desired result, the professionals “would explore legal or regulatory options,” according this time to “people familiar with the matter.”