Higher Royalties for Spatial Audio: How Apple Boosts Spatial Audio with Its Latest Incentives

Updated: January, 23

Streaming is one of the most lucrative markets in the music industry. In 2020, the IFPI reported that music streaming generated $13.4 billion, representing 62.1% of all recorded music revenue for that year, and by 2032, the market share growth is expected to reach $108.04 billion. Streaming services keep coming up with new features and offerings all the time to outplay the competitors and target new audiences. Spotify spends millions on podcasting and audiobooks, while Tidal earns fans' trust and attracts artists with its latest artist-centric initiatives like Tidal Collabs.

Apple, which is among the top players on the streaming field, is gaining the spotlight with its latest move. After the company introduced Dolby Atmos to Apple Music in 2021, it's now gearing up to boost the royalties for artists and labels who embrace spatial audio in their tracks. According to a recent Bloomberg report, Apple is about to give musicians extra weight in royalty calculations starting January 2024. The idea is that artists will get higher royalties for uploading tracks in spatial audio even if listeners don't choose the Atmos version of a song as long as it's available in that format.

Updated: In January, following the Bloomberg report from December 2023 which we refer to above, Apple Music highlighted its commitment to recognising the efforts of artists producing higher-quality content through spatial audio technology, as reported by Music Business Worldwide. January's monthly payments will witness an up to 10% increase in royalties for tracks featuring spatial audio.

For Apple, the push for spatial audio is not just about delivering a killer listening experience. Apple's strategy aims to nudge artists and labels to jump on the Dolby Atmos bandwagon, even for older tracks.

Not everyone is happy about the incentive, though, as the push stimulated by money might end up in a plethora of low-quality tracks proudly labelled with "spatial audio" or "Dolby Atmos." And, at the end of the day, not every single track sounds better in spatial audio; let's be honest.

Diving deeper into the tech pool, spatial audio with Dolby Atmos makes your ears feel like they're at a live performance, surrounded by sound from every direction. And listeners are getting on board. More than half of Apple Music's subscribers engaged with Spatial Audio features by early 2022, signaling a growing appreciation for this technology. The portion of spatial audio listeners in the beginning of 2023 was more than 80%, as Apple shared.

In May 2021, Apple and Amazon started offering high-quality streaming music to subscribers at no extra cost, setting the stage for what seems like a logical progression—rewarding those who embrace spatial audio. But Apple's commitment extends beyond royalties. Lossless audio streaming was introduced, covering the entire Apple Music catalog of over 75 million songs. Playlists like "Made for Spatial Audio" and others were curated to showcase the technology, offering listeners a guided tour of what spatial audio can bring to the musical table.

To complement these efforts, Apple has been proactive in educating music enthusiasts about the benefits of spatial audio. From dedicated guides on Apple Music to roundtable discussions featuring top sound engineers, the goal is clear—create an informed and engaged user base.

Another way to give spatial audio a boom and push hardware sales is this tech twist that occurred earlier this year—Apple's hardware, including AirPods and the HomePod, now supports Atmos playback. The idea is simple. Apple strived to create a seamless connection between the software and hardware and provide you with a music experience that goes beyond the digital level.

It's worth noting that Apple isn't the only player in town. While Amazon Music offers spatial audio supported by Dolby Atmos at no extra cost, Spotify is yet to jump on the bandwagon.