Apple is offering independent musicians a non-negotiable royalty rate of $0.0013 per stream on iTunes Radio, according to Digital Music News. Apple will also offer a 15 percent share of net advertising revenue for the first year; in subsequent years, the rate rises to $0.0014 plus a 19 percent share of net advertising revenues. iTunes Radio was announced earlier this month.
iTunes Radio will also allow listeners up to six song skips each hour, provided they skip within the first 20 seconds of a song. This also allows Apple to not pay for song skips. According to Billboard, the minimum royalty rate includes 45 percent of net advertising revenue plus $21.25 for each 1,000 listener hours in the first year and $22.25 for the remainder of the license agreement.
Also, Digital Music News reports Apple is threatening to punish iRadio holdouts by removing their music from the iTunes music store.
Below is a portion of the non-negotiable form contract sent to independent and non-major label artists:
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