Image: Apple
Apple's recent initiative to provide higher royalties to artists embracing spatial audio has stirred discontent among indie labels. Critics argue that this move may divert potential earnings from smaller labels to larger companies with greater financial resources. The Financial Times reported that Apple began offering a 10 percent increase in royalties for artists releasing spatial audio tracks on Apple Music last month. However, the additional compensation is sourced from the same fixed pool of funds used to remunerate artists who do not adopt the spatial audio format.
Spatial audio, created using Dolby Atmos technology, incurs an estimated additional cost of around US$1,000 (around CA$1,348) per song, according to industry executives interviewed by FT. Extrapolating this cost to entire albums reveals a substantial financial burden, especially considering the extensive back catalogue of albums that many labels maintain. The Financial Times consulted with executives from prominent labels such as Beggars Group, Secretly, and Partisan Records, home to artists like Vampire Weekend and Phoebe Bridgers. In response to these concerns, the affected labels plan to engage with Apple, hoping to negotiate a more favourable arrangement.