(Bloomberg) — Just days before Apple Inc. plans to reveal a music streaming service, the company is still negotiating with record labels over terms.
The labels are pushing to get a larger chunk of revenue than they receive under their current deals with Spotify Ltd., a competing streaming service, people familiar with the negotiations said. Both sides want to complete a deal before Apple’s June 8 annual event in San Francisco for more than 5,000 developers, according to the people, who asked not to be named because the talks are continuing.
The rapid rise of streaming music and television has raised the stakes for media companies, as record labels and TV networks try to forge deals that ensure they share in that growth. Apple wants to remain the entertainment industry’s most important partner despite the popularity of services like Spotify, Netflix Inc. and others.
“Who is going to get the majority share of the profit from the content?” said Tamara Gaffney, principal of Adobe Digital Index, which analyzes consumers digital media consumption. “Apple has always wanted to get a lot of the share and they’re now in a negotiating situation with content manufacturers who want more of the share for themselves — it’s a really tough space.”
In talks with Apple, the music labels are seeking a benchmark for negotiations with other services, including Spotify. The labels take 55 percent of Spotify’s monthly $9.99 rate, and publishers take about 15 percent. Labels are pushing for closer to 60 percent from Apple, the people said.
Apple also has been in talks with broadcasters ABC, CBS and Fox to be part of a Web-based service that would include about 25 channels, people have said. Those negotiations are moving slowly and Apple TV announcements aren’t expected at next week’s conference, people familiar with the plans said.
