It seems that Apple’s profit margins when it comes to subscription from Apple Music could have increased ever so slightly, thanks to a report from Bloomberg in which according to their sources, Apple has recently managed to strike up a new music deal with Warner, in which Apple will now pay the label a smaller percentage than they did before.
In fact the report goes on to add that this new deal with Warner could be used as a precedent for Apple to negotiate for similar deals with the other major labels, with Sony being next. Now some might be wondering why on earth would Warner accept a smaller percentage compared to what other streaming platforms are paying it? Or even what Apple was paying them before?
According to the report, it seems that this is because unlike other music service providers, Apple Music has no free listening tier, and that even during the free 3-month trial period, Apple will still pay royalties to musicians. It is because of this that the labels are apparently willing to give Apple a bit more leeway during the negotiations.
It is unclear if this smaller percentage of royalties paid to Warner could mean that Apple can now afford to reduce the price of Apple Music’s subscriptions, but considering that this means a higher profit margin, we doubt that will be happening, but hey, one can hope, right?