APPLE WANTS LABELS TO TAKE A SMALLER BITE (REPORT)

First Spotify, now Apple. Like its chief rival, Apple is seeking a decrease in the percentage of revenue it pays the labels, Bloomberg reported Wednesday, sourcing people familiar with the matter.

The labels’ initial deal with Apple, which launched Apple Music two years ago, runs out at the end of June, the anniversary of the premium service’s launch, and the parties are presently engaged in talks.

Under Apple’s current deal, labels take a 58% cut of revenue from Apple Music subscriptions. Spotify, by contrast, pays out 55% and recently made a deal to reduce the rate to 52% should it hit certain growth targets. According to the sources, the labels are open to a reduction in Apple’s rate—provided it, too, grows its subscriber base.

The current deals with Apple are likely to remain in effect until the parties agree on new terms.