“Not A Revenue Issue” — IMPALA Invites Apple to Discuss Alternatives to Coupling Spatial & Royalties

Photo Credit: Alex Kalinin

IMPALA is seeking to have a conversation with Apple over its plan to offer a 10% boost in royalties for music available in spatial audio. Here’s the latest.

IMPALA says the boost in royalties for spatial audio only makes music streaming less accessible for independent labels and their artists. That’s because there are more upfront costs involved in recording new tracks or remixing already released repertoire. Some artists may choose not to use the format as a creative choice—but feel pigeon-holed into accepting it for higher royalty payment.

“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 told Digital Music News.

The organization says it welcomes efforts to grow the debate about how to reform the streaming market. But it wants to revisit the 10% uplift for spatial audio, arguing that it should have nothing to do with revenue allocation. “While we understand that enhanced formats aim to be for the benefit of fans, it should not result in reducing the rates for tracks not released in a specific format,” IMPALA says.

To that end, IMPALA is inviting Apple to discuss alternative ways, rather than unilaterally introducing significant changes. The group call it a delicate issue given Apple’s market power and the fact that it disproportionately affects emerging and less-streamed artists, niche genres, smaller markets, and less mainstream languages. IMPALA says Apple’s plans go against its own streaming recommendations which seek to grow revenues overall and end dilution—while promoting diversity within the streaming ecosystem.

“We support moves by services to recognize sound quality in a way that is objectively fair and sustainable,” says IMPALA Chief Executive Chair Helen Smith. “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 recognizes 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.”

IMPALA was first established in 2000 and now represents more than 6,000 independent music companies. 99% of Europe’s music companies are small, micro, and medium-sized businesses and self-releasing artists. Known as the independents, they produce more than 80% of all new releases and account for 80% of the sector’s jobs.

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