Apple Music on iOS 10, with Senior VP Eddy Cue. (credit: Andrew Cunningham)
Changes may be coming to Apple Music, but for record labels rather than subscribers.

According to a Bloomberg report, Apple may be looking to reduce how much it pays to record labels whose music populates the company’s music-streaming service. Labels’ deals with Apple expire in the coming weeks, and Apple may be looking to lower the percentage it pays to those labels with the hopes that any reduction will be offset by a consistent rise in subscriptions.
According to a person familiar with the matter, the deals that are set to expire soon will likely be extended even if Apple and the labels can’t agree on new terms.

But Apple might try to renegotiate thanks to renewed hope in the music industry due to the popularity of paid streaming. Bloomberg’s report states the recording industry grew 5.9 percent last year worldwide mostly due to paid music-subscription services like Apple Music and Spotify.
Spotify recently renegotiated its rate with labels to 52 percent from 55 percent, but those numbers are tied to “certain guarantees of subscriber growth.” When Apple Music debuted about two years ago, the company initially overpaid labels to stifle anxiety that the new subscription service would overshadow iTunes, which has been a big source of revenue for record labels for years.

Apple Music’s growth to the second-largest music streaming service hasn’t hurt labels’ revenue from iTunes much, but labels still clearly want to be careful with their streaming commitments going forward.
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