iPhone maker Apple (NASDAQ:AAPL) has invested in UnitedMasters, a music distribution company that lets musicians bypass traditional record labels.
Musicians who distribute their music through UnitedMasters keep ownership of their master recordings and pay either a yearly fee or 10% of their royalties to the company for distributing their songs.
Silicon Valley-based Apple led a funding round that values UnitedMasters at $350 million U.S.
Musicians are increasingly taking ownership of their work. Popular singer/songwriters such as Taylor Swift and Anita Baker have publicized their fights with record labels over their master recordings. Artists once needed major publishing labels — which typically demand ownership of master recordings — to build a fan base.
However, with the rise of social media, record labels no longer play as significant a role in the music industry. Increasingly, musicians are taking their songs directly to consumers through websites such as YouTube.
The funding round creates a partnership between UnitedMasters and Apple. As streaming services, including Apple’s, compete for subscribers, they are cutting more favorable deals with artists who attract users to platforms.
Spotify announced a project earlier this week to detail how it pays musicians following online pressure to do so. The deal with UnitedMasters is about "empowering creators," Apple said in a news release.
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