Apple seems to be continuing to its endeavors to beat Spotify for the best music streaming position. The tech giant has recently proposed a simplified statutory licensing plan to the government.
Billboard reported that Apple has recently submitted a proposal to the U.S. Copyright Royalty Board to simplify the method of how music-streaming companies pay songwriters and publishers.
If this pushes through, though, it would certainly make it more expensive for Apple Music's rivals, Spotify and YouTube, to continue its free streaming option. Currently, songwriters and publishers are paid between 10.5 percent and 12 percent of their overall revenue.
The money collected is divided into public performance and mechanical royalties first then paid to where it should be paid. It was noted that negotiations between labels and other owners of recording copyrights are usually in their own terms.
Apparently, Apple's proposal suggests an "all-in" statutory rate that would be "fair, simple and transparent, unlike the incredibly complicated structure that currently exists." A rate of $0.00091 per interactive stream, or 9.1 cents per hundred plays, is recommended by the tech giant. This means that songwriting royalties for 100 streams would equal to one download.
According to 247 Wall St, Apple's recent proposal is "a shot straight at the heart of Spotify." The suggestion would mean that the Sweden-based streaming service would need to pay more in royalties than its current rate.
It is highly likely that Spotify would need to increase its monthly subscription rate from $9.99, which is similar to what Apple Music charges.
"Whether or not Apple makes a profit on Apple Music is not the point," the publication wrote. "Clearly Apple can use its enormous cash hoard and profits from iPhone sales to put some serious financial hurt on competitors."
Spotify recently slammed Apple for blocking a new version of its iPhone app, claiming that the tech giant is "causing grave harm to Spotify and its customers."
Apparently, Apple turned down the update due to "business model rules." The company has also demanded Spotify to use their billing system if the streaming service wants to use the app to get new customers and sell subscriptions.