August 27, 2013

Apple Takes 30 Percent of In-App Subscriptions

Have you ever wondered how much of the money you spend on streaming music goes to the company itself?  First, let’s look at the people who need to be paid out along the lines.  First and foremost, there are the artists – these are the content makers who really make the product that each company is selling.  Without them, the company has nothing and IS nothing.  One step up from the actual musicians themselves is the record labels that control how their music is distributed.  Naturally, they take a large chunk of their money in exchange for putting them on the scene and on the internet.

Right above them are the handlers who mediate between a record label and a streaming service like Spotify or Pandora.  These guys aren’t necessary, but there is an advantage to using them.  They actually do some scout work to see which service(s) will offer the most bang for the buck.  Finally, at the very top there are the streaming services like Apple who run these companies.  Would you be shocked to learn that they take a whopping 30% of funds from subscribers?  They might pay out to record labels, but they certainly have no problem reaping in the profits as well.