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While others chose to walk away from negotiations (Google) or ignore them completely (Amazon), it appears that Apple was successful at getting the record labels on board for its new iCloud service -- but at what cost?
AppleInsider is reporting that Apple’s forthcoming iCloud service may have been a costly one -- and not just for the hardware and software required to run it. According to The New York Post, three separate sources claim that Cupertino paid out “more than $100 million, and as high as $150 million” to the major music labels to get them on board. That works out to between $25 million and $50 million each, according to the website.
So what did Apple get for their dough? Apparently, not all that much in the short term, with the payment viewed “as an incentive to get on board, depending on how many tracks consumers are storing.” The iCloud service is widely believed to initially be free to users who have purchased tracks from iTunes, and possibly $25 per year later on.
"The music companies will divide the fee with Apple, with the tech firm taking a 30 percent cut, 12 percent going to music publishers, and the rest to the labels to divide with their artists," The New York Post report revealed.
According to numerous reports, Apple finally got the last major record label, Universal Music Group, on board for iCloud, which the company finally outed in their own press release on Tuesday, as well as in banners currently being installed at Moscone West in San Francisco for the Monday, June 6 keynote at WWDC 2011, where the service will be officially unveiled.
Follow this article’s author, J.R. Bookwalter on Twitter
(Image courtesy of T-gaap.com)