Apple paid record labels up to $50 million each for iCloud streaming

Fri, Jun 3, 2011


News keeps trickling in about Apple’s upcoming iCloud music service, with the latest report coming via the New York Post which relays that Apple paid the four music labels upwards of $150 million in order to get them on board with its planned streaming service. Earlier this week, Apple finally got Universal to sign on with iCloud after having already shored up deals with the other 3 big record companies.

The Cupertino, Calif., tech giant has agreed to pay the labels between $25 million to $50 million each, as an incentive to get on board, depending on how many tracks consumers are storing.

The size of the advance payments have been a major hold-up for Google, which had been negotiating with the music companies and now will likely have to pony up higher fees to get a rival cloud service into action, said music industry sources.

The report also states that Apple was finally able to secure licensing deals with music publishers as well, thereby eliminating all hurdles for iCloud to get off the ground next week. Reports surfaced yesterday claiming that iCloud will debut as a free service in the beginning only to become a $25 annual subscription service thereafter. As a quick refresher, the iCloud service will enable users to stream purchased iTunes content from Apple’s servers down to any iOS device. It remains to be seen if this applies to previously purchased iTunes content or only content purchased after a certain date. Also unclear is whether or not user uploaded music will be eligible for iCloud’s streaming service.


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