IMPALA invites Apple to discuss alternatives to coupling spatial and royalties

27 February 2024 - Press release

 

Over the last few weeks, IMPALA has been gathering views on Apple’s proposal to apply a 10% stream rate uplift for music available in spatial audio, in a move which will have negative consequences for parts of the industry, particularly for independent labels and their artists.

The boost in royalties, as already highlighted in the press, is less accessible to independents. This can be due to the upfront costs involved when recording new tracks and having to remix already released repertoire. Some may also choose not to use this format, simply as a creative choice. With Apple's revenue pool being finite, a multiplier for spatially-enabled plays inevitably translates to diminished earnings for those unable to access it, which compounds the impact on independents.

IMPALA welcomes efforts to grow the debate about how to reform the streaming market. However, the rationale for this particular reform should have nothing to do with revenue allocation. While we understand that enhanced formats aim to be for the benefit of the fans, it should not result in reducing the rates for tracks not released in a specific format. 

IMPALA invites Apple to discuss alternative ways, rather than unilaterally introducing significant changes, resulting in the redirection of revenues from independents to be redistributed among the major players. This is a delicate issue given the market power generally of Apple, as well as the majors and the fact that it disproportionately affects emerging and less-streamed artists, niche genres, smaller markets, and less mainstream languages. This goes in opposition to IMPALA's own streaming recommendations which seek to grow revenues overall and end dilution, as well as promote diversity within the streaming ecosystem.

IMPALA’s Executive Chair Helen Smith commented: “We support moves by services to recognise sound quality in a way that is objectively fair and sustainable. Our invitation to Apple on this proposal is to look at alternative ways to achieve this rather than linking it to streaming reform. We look forward to our board meeting next month at Apple's emblematic office in Battersea. We also refer again to IMPALA’s 10-point plan to reform the current royalty allocation models to ensure fairness and sustainability for all artists, accelerate revenues and promote a broader diversity of emerging talent. Our plan also recognises the untapped commercial potential in smaller markets, particularly within Europe, and has proposed initiatives to unlock this potential and promote cultural and linguistic diversity within the streaming landscape.”

Mark Kitcatt, Chair of IMPALA’s streaming reform group and CEO of Everlasting Records and Popstock Distribuciones added: “Changes to the streaming ecosystem are now being pushed out by the global streaming services which dominate the landscape. IMPALA started this discussion three years ago, and we appreciate Apple’s efforts to improve sound quality. We would like to explore other ways of achieving this. For us this is simply not a streaming reform issue. If Apple remains committed to adjusting revenue allocations, let's explore other options together.”