Apple Signs Deal With Universal Music Group for iCloud, Major Publishers Also on Board
By Ed Christman with Antony Bruno
As expected, Apple has signed the fourth major label — Universal Music Group — to a licensing deal for its new iCloud service, which is scheduled to be unveiled on Monday at its Worldwide Developer Conference, sources told Billboard today.
At the same time, Apple has also reach an accord with the four major music publishers licensing deals, sources said. The publishers nailed down a 12% of cloud revenue rate, while the major record labels are believed to be entitled to 58% of revenue, leaving Apple with the remaining 30%.
While sources said Universal and Sony Music Entertainment were asking for 60% of the revenue, they now suggest some sort of a comprise deal was reached at the last minute in order to accommodate the 12% of revenue royalty rate being paid to publishers.
Apple has yet to reach deals with the tens of thousands of independent publishers and labels. Sources say that it will offer indie publishers the same 12% rate it is paying the major publishers. However, Apple began negotiations with independent labels by offering that sector 53% of cloud revenue. Some indie label executives say they are pushing back on Apple to get a higher cut.
Meanwhile, a report in CNET has a few other tidbits of information:
– The music streaming will be announced Monday, but will not be immediately available (something Billboard.biz speculated on earlier today)
– Only music purchased from iTunes will be eligible for storage in the music locker initially, but music gained outside of iTunes may be supported sometime in the future. (A questionable decision if true: One benefit of a scan-and-match locker is that it would monetize pirated music through per-song streaming payments).