The royalties structure of Apple’s upcoming iTunes Radio service is becoming clearer: after months of rumours, there are now contracts being leaked to the industry press. Billboard reports that Apple’s licensing contract for independent labels explains that listeners will be able to skip up to six songs an hour if they do so within the first 20 seconds of the song, with Apple not paying any royalties on those skipped tracks. It also won’t pay labels for songs played to users who already own them in their iTunes cloud lockers, or for ‘Heat Seeker’ promotional tracks – although it’ll only skip royalties for up to two songs an hour per user. The report claims Apple will pay indie labels $0.0013 per song-play plus 15% of net advertising revenue in the first year, growing to $0.0014 per play and 19% of net ad revenues in later years. The Wall Street Journal has an interesting extra detail: Apple’s contracts also refer to using music in the background for news, weather and sports programming on iTunes Radio in the future. And for some more-scurrilous speculation, check Digital Music News‘ claim that Apple is threatening indie distributors that if songs are withheld from iTunes Radio, they’ll be booted off the iTunes Store.
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