Apple has agreed to a new music licensing deal with Warner Music Group, according to a report from Bloomberg. The new multi-year agreement will allow Apple to pay Warner a smaller percentage of its streaming revenue than it agreed to when it launched Apple Music two years ago.
Apple’s original licensing deals for Apple Music had it paying labels roughly 58 percent of its streaming sales, a rate that was higher than Spotify at the time. The higher initial rate, sources say, was due to the labels’ fear of Apple Music cannibalizing the sales of iTunes — the music industry’s biggest money maker for years — but that hasn’t been the case thus far.
Spotify landed its own rate reduction in its label deals earlier this year, dropping from 55 percent of sales to 52 percent.
The negotiations between Apple and the music labels have been far from the contentious bargaining that took place between Spotify and the music labels during its renewal period, sources said. Apple’s licensing deals with the three major labels expired back in June, but a deal with Sony Music is expected to be completed soon, according to Bloomberg, and Universal Music Group isn’t that far behind. In comparison, it took Spotify around a year to renew its deals with the music industry.