Apple today announced it has signed the fourth major recording label for its iCloud service, officially spelling trouble for Amazon and Google’s music streaming cloud services.
The Cupertino, Calif.-based company signed Universal Music Group to its upcoming iCloud music streaming service, joining Sony, EMI and Warner Music Group, which had previously agreed to similar deals.
Apple has agreed to pay up all four labels between $25 to 50 million $50 million in advanced payments as an incentive for the companies to license Apple’s iCloud for streaming.
The final hurdle for Apple and its iCloud service are the big four publishers, which represent songwriters and their music and lyrics. The company has signed Universal Music Publishing and Sony/ATV, while negotiations continue with EMI and Warner/Chappell. Both companies are expected to sign deals with Apple in the coming days.
Apple will reportedly divide its iCloud revenue between the record labels and publishers, retaining an estimated 30 percent, while record labels receive 58 percent, and publishers 12 percent.
Early reports state Apple’s cloud service will launch free of charge, but could eventually carry a yearly fee of $25. Customers can only stream music purchased through the iTunes store, but Apple is looking to include songs outside iTunes “sometime in the future.”
While Apple and the music industry share the spotlight in advance of Apple’s new venture, other companies trying to make a splash in the music streaming space, including Google and Amazon, may now have a difficult job if they refuse to give in to record labels for licensing rights.
Google Music and Amazon Cloud Player launched earlier this year without acquiring licensing rights. Without these rights, users of the services are forced to upload their own music to Google and Amazon servers, a process that, depending on the size of a library, is very time-consuming.
Apple’s customers will able to bypass that monotonous step, thanks to licensing rights, and be able to scan a music library and match the songs to master tracks on Apple’s server, allowing them to stream the songs to a device.
Music executives have supported Apple and their efforts to secure licensing rights in hopes that Apple will have the superior service and force both Amazon and Google to acquire the same rights. Music executives believe once consumers see the strength of Apple’s service, they won’t want rival products, forcing Amazon’s and Google’s hand to come knocking for agreements.
The iCloud service will be unveiled during Apple’s Worldwide Developers Conference in San Francisco.
- All publishers onboard for iCloud after tug-of-war deal (electronista.com)
- Apple Signs Deal With Universal for iCloud Music Service [REPORT] (mashable.com)
- Apple signs Universal Music as last major label to iCloud (geek.com)
- Apple iCloud Release Puts Music Streaming Startups In Spotlight (huffingtonpost.com)
- Apple iCloud $25/year tip insiders (slashgear.com)
- Apple Signs Universal Music For iCloud (slashgear.com)
- Apple lands Universal for iCloud, gets 30% revenue cut again (electronista.com)
- Major labels, music publishers lining up behind Apple’s iCloud (latimesblogs.latimes.com)
- Universal Said To Ink Music Deal With Apple Ahead Of iCloud Debut (paidcontent.org)
- iCloud: Apple’s Perfect Storm Against Dropbox, Google, and Amazon Cloud? (benzinga.com)