Apple Boosts Royalties For Artists And Labels To Boost Adoption Of Spatial-Audio Technology
Portfolio Pulse from Benzinga Neuro
Apple Inc. (AAPL) is reportedly planning to increase royalty payouts to artists and labels using its spatial audio technology, which is mixed with Dolby Atmos. This incentive is designed to encourage the adoption of the technology and could lead to increased sales of Apple's Atmos-supported hardware. Amazon Music (AMZN) also offers spatial audio at no extra cost, while Spotify (SPOT) does not provide this format. Apple's move aligns with the trend of offering high-quality streaming music without additional fees, initiated by Apple and Amazon in May 2021.
December 12, 2023 | 10:27 am
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Spotify does not currently offer spatial audio, which could put it at a competitive disadvantage as Apple incentivizes artists to adopt the technology, potentially affecting Spotify's market position.
Spotify's lack of spatial audio offering could become a more significant competitive disadvantage as Apple incentivizes artists to use the technology. This could lead to a shift in artist and consumer preference towards platforms that support spatial audio, potentially impacting Spotify's market share and relevance in the streaming industry.
CONFIDENCE 75
IMPORTANCE 65
RELEVANCE 70
NEUTRAL IMPACT
Amazon Music's existing offer of spatial audio at no extra cost may face increased competition from Apple's new royalty incentive program, potentially impacting subscriber preferences.
While Amazon Music already offers spatial audio without additional fees, Apple's move to increase royalties for artists using spatial audio could make Apple Music a more attractive platform for artists and users. This might lead to a competitive response from Amazon or affect user preferences, but the direct short-term impact on Amazon's stock is uncertain.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Apple's plan to increase royalties for artists using spatial audio could incentivize more artists to adopt the technology, potentially increasing Apple Music subscriptions and sales of compatible hardware like AirPods and HomePod.
Apple's decision to increase royalties for artists using spatial audio is likely to have a positive impact on the company's music service and hardware sales. As artists and labels are incentivized to produce more Atmos-mixed music, user engagement with Apple Music may increase, potentially leading to higher subscription numbers. Additionally, the promotion of Atmos-compatible hardware could drive sales of AirPods and HomePods.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 90