Apple Music Renews Licensing Deal With Warner Music

Emma McIntyre/Getty Images for Apple
A general view of atmosphere as seen at Apple Music Launch Party Carpool Karaoke: The Series with James Corden on Aug. 7, 2017 in West Hollywood, Calif.

Apple Music has renewed its licensing deal with Warner Music Group in a move that reduces the tech giant's royalty payment commitments to the major as it continues to aggressively build its user base, sources confirm with Billboard. The deal ensures the WMG catalog -- which includes such pop superstars as Ed Sheeran and Bruno Mars -- will continue to stream on Apple Music and be available to download on iTunes.

Apple is said to be nearing a similar deal with Sony Music, though terms with Universal Music could take longer, according to a Bloomberg report. Spotify, Apple's chief rival in the streaming space, has secured licensing pacts with all three majors and the indie rights agency Merlin, paving the way for it to go public.

Apple Music is seeking similar reductions as Spotify has in how much it pays rights holders, though it still pays more than rivals. When it launched in 2015, Apple Music agreed to pay labels 58 percent of its revenue. According to Bloomberg, Apple is now trying to bring that figure down to 55 percent for its label partners -- that's the same rate Spotify has been paying, though theirs is going to down to 52 percent, as part of newly struck terms, sources say.

With this arrangement, Warner Music becomes the first major label to secure rights deals with the big three in digital music: Spotify, Google's YouTube and Apple Music.

In June, Apple announced its music service had 27 million subscribers. A month later, Spotify quietly updated its paid subscriber count to 60 million.