iTunes Contract Details

There are still a few missing details, but CDBaby posted the notes of a private meeting with Apple on web, so now we know most of what there is to know about Apple's deals with the labels for the iTunes Music Store. Of course, Apple ordered the notes off of the web, but alternative sources exist.

So we know a few things:

1. More than 75% of the available songs have sold at least once.
2. 90% of sales come from 1-click downloads. (These people obviously don't have kids!)
3. Songs over seven minutes long are not available for individual download.(This doesn't seem right, I'll investigate)
4. There is no upfront fee or advance.
5. All sales are reported to SoundScan on a per-track basis.
6. There is no direct pay-for-play, ever. Not even banner ads.
7. Top seller lists are only for last 24 hours.
8. Labels may not sell album-only tracks.
9. There are no outbound links.
10. Contracts are for three years.
11. Apple pays monthly.
12. Searches return up to 250 songs per artist.
13. Labels do the work of encoding. (But Apple picks the 30 second samples.)

It's a reseller arrangement, so Apple keeps their amount and cuts a check for the rest to the label. Rumors have Apple's take at $.35 per track, so each track sold is $.65 to the label to split up however their own contracts with the artists work.

Great stuff.

Article Author: Phillip Winn

Phillip Winn was the Chief Geek for Blogcritics, and a blogger since 1995. He may currently be found and followed as @pwinn on Twitter.

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