You think artists complaining about streaming rates are bad? What about when labels, with their prime position a good bit further up the royalty distribution food chain, get offered a deal that makes them pull a sour milk face?
That is, according to rumours, what Amazon has tabled with its potential next move into streaming. Billboard has been leaked a number of the deal terms that were being proposed by the retailer, which it claims “shocked and disappointed” copyright owners. The deal is, apparently, based on a fixed pool of revenues and Amazon is brokering no space for negotiation. The indies are, Billboard says, being offered $5m between them (paid out pro rata to each label depending on how many plays their music accumulates) for a year, with the majors splitting up $25m between them.
Billboard reads the move as Amazon throwing its weight around, as it has done in the book sector – essential a philosophy of “Our way or the highway” translated into micropayments. The music service is understood to be part of a wider expansion of the Amazon Prime offering (its shipping service that charges an annual fee for swift deliver and discounted next-day delivery) where it will use music as an incentive to push through a price hike.
“They’re going to get another $20 or $40 for each Prime subscriber and are going to chip off $5 million to pay the indies, regardless of the number of subscribers and usage,” the owner of an unnamed independent label told Billboard. “That’s insane.”
The whole thing appears shrouded in uncertainty about if the service will ever launch and what form it could take. Some sources are saying Amazon is digging its heels in. Others say it is prepared to negotiate. Some say it will be based on music catalogues. Others say it will focus only on certain titles. Amazon, meanwhile, is not commenting.
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The problem with “throwing their weight around,” is that unlike books, the music side is pretty well covered…I’m sure the labels feel they can walk away from the table here because they don’t need Amazon when people have so many options out there already.
Amazon is likely not going to win this one especially with whatever Apple’s likely going to or has offered already.