Indie labels say Apple’s Spatial Audio royalties will take money away from them |

Feb 5, 2024

Independent record labels are not happy with Apple’s new royalties for spatial audio, as they say it will only benefit the biggest labels with more resources. The Beggars Group, Secretly Group, and Partisan Records, who happen to represent artists like Adele, Phoebe Bridgers, and Vampire Weekend, argue that it will take away potential earnings from them, told the Financial Times, because of how streaming payouts work.
Last month, Apple started offering artists extra royalties for putting out their music in Spatial Audio. Artists releasing tracks in Spatial Audio format will receive up to 10 percent of additional royalty, even if no one is listening to the Spatial Audio track. And this extra money comes out of the fixed pool of money that is designated for other artists.
Apple will pay artists based on pro-rata shares. For non-spatial audio tracks, the factor of distribution will be 1, while for other tracks, it will be 1.1. This means that non-spatial audio tracks will receive a smaller portion of the money compared to other tracks. So, while those offering music in Spatial Audio would earn more, those who don’t might see a reduction in their earnings.
“It’s literally going to take the money out of independent labels and their artists, to benefit the biggest companies in the marketplace,” said an executive at an independent record company.
The label executives told the Financial Times that producing songs in spatial audio costs $1,000 per song or $10,000 for an entire album. Updating older music could be even more expensive. A label’s back catalogue contains many albums, making the cost of a single album 10 times higher.
“It’s going to benefit the biggest player, Universal, because they’re the ones with the resources to invest in that. Whereas the independent sector . . . we’ve found it hard to justify the expense of creating spatial masters . . . we’re not in the business of chucking money just because Apple is saying you should be spending money on this,” they added.
Some executives doubt Spatial Audio’s artistic value, comparing it to a 3D Mona Lisa that Louvre visitors won’t prefer.
Since introducing Spatial Audio in 2021, Apple says that the number of songs available has grown by 5,000%. 80% of Daily Top 100 tracks last year were in Spatial Audio. 90% of Apple Music listeners have experienced it, with plays tripling in two years.
Indie labels are in talks with Apple over the new payout scheme, and may pursue legal action if negotiations with Apple fail to change the new policy, tell the sources.

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