In a move to promote its spatial audio technology, Apple Inc. (NASDAQ:AAPL) is reportedly planning to reward artists and record labels that utilize this technology with higher royalty payouts.
What Happened: As per a Bloomberg report published on Dec. 11, 2023, Apple has plans to assign extra significance to the streams of songs mixed with Dolby Atmos technology from next year. This could mean increased royalty payments for those artists who adopt the technology, developed by Dolby Laboratories Inc.
Artists can benefit from this policy even if listeners do not play the Atmos version of a song, as long as the song is available in that format. This new policy aims to motivate artists and labels to record and mix music using Atmos, even for older tracks.
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The prospect of a royalty increase can be quite enticing for established artists and labels, as mixing music in Atmos is affordable for them. Additionally, Apple’s hardware, such as AirPods and the HomePod, supports Atmos playback, which could potentially lead to increased sales of Apple’s hardware.
Apple, which introduced spatial audio to Apple Music in 2021, declined to comment on this development. It is important to note that Amazon Inc.‘s (NASDAQ:AMZN) Music app also provides spatial audio supported by Dolby Atmos at no extra cost, while Spotify Technology SA (NYSE:SPOT) does not offer this format.
Why It Matters: This move by Apple comes in the wake of a trend initiated by both Apple and Amazon Inc. back in May 2021. The two tech giants made high-quality streaming music available to their subscribers at no extra cost. Amazon Music announced the availability of its high-quality streaming tier, Amazon Music HD, for all eligible Amazon Music Unlimited subscribers free of charge. In light of this, Apple’s new policy to incentivize the use of spatial audio technology seems to be a logical step forward in enhancing the music experience for its users.
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