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Apple reportedly low-balls record companies, wants royalties to be half of Pandora’s rates

Published Mar 7th, 2013 6:09PM EST
Apple Record Company Royalty

Apple (AAPL) didn’t get to be the world’s most valuable tech company by paying other companies premiums for their products and services. The New York Post reports that Apple has once again taken its hard-bargaining approach to the recording industry, as unnamed sources claim that the company wants to pay record labels just $0.06 per every 100 songs users stream over its yet-to-be-announced music-streaming service. To get some perspective on just how cheap this is, consider that Pandora pays double this rate at $0.12 per 100 songs and that Spotify pays around $0.35 per 100 songs. Of course, neither of those companies has the enormous clout of Apple, which the Post’s sources acknowledge “could tap a whole new revenue stream for them” with its own music service. All the same, it would be surprising if the record companies in the end agreed to accept half of what the current lowest payer on the market is offering.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.