Monday, June 3, 2013

Looking at song broadcast fees

I was just reading that Apple is reportedly aiming to pay 6 cents per 100 songs streamed in their new iRadio service.

If we look at a national broadcaster, such as the UK's BBC Radio 1, it is known that they pay approximately £18 per minute for a song being played.  Assuming 1 million people listen, that's £0.00186 per person per minute.  Apple is reportedly paying 6 cents per 100 songs streamed...  So, that's ($0.06 / 100) $0.0006 per song, and assuming a song is 3 minutes, that's $0.0002 per person per minute.

Even taking into account the foreign exchange rate between pounds and dollars, that is still a hefty drop in profits.  However, I think that far more people will listen on their devices than they will using traditional radio.

I think this may end up a win-win for both the record companies and Apple.