Independent Labels Challenge Apple Music’s Enhanced Spatial Audio Royalty System

Independent music labels, including Beggars Group, Secretly Group, and Partisan Records, are voicing concerns over Apple Music's new royalty payment structure for spatial audio content. They argue that this scheme unfairly disadvantages artists who cannot afford the additional cost of producing music in the spatial audio format.

The Economic Burden of Spatial Audio Production

Apple Music has introduced a system where artists producing tracks in spatial audio can earn bonuses of up to 10 percent. These spatial tracks will have a multiplier of 1.1 applied to their streaming counts when calculating royalty payouts from Apple’s subscription revenue pool. This effectively means that tracks without spatial audio will compete for a reduced share of the total payout.

Industry executives have highlighted the financial implications, noting that spatial audio production can add roughly $1,000 to the cost of recording each song. For a complete album, this amount can surge to about $10,000. Older music catalog updates to spatial audio could incur even higher costs. This disproportionately impacts independent artists who typically have lower production budgets.

The Implications for Independent Labels

The new payout policy could potentially widen the gap between major and independent music labels. Big players like Universal Music Group are better equipped to absorb the costs of producing spatial audio content. In contrast, independent labels and their artists might struggle to upgrade their productions, thus missing out on the higher royalty payouts.

Apple has made significant investments to promote spatial audio and its hardware supports this immersive listening experience. While other streaming services like Amazon and Tidal also offer spatial audio, Spotify currently does not.

Record labels such as Beggars Group, which represents high-profile artists like Adele, along with Secretly Group and Partisan Records, have a vested interest in ensuring a level playing field for all artists on digital platforms, regardless of their recording budget.

Apple, SpatialAudio, Royalties