Apple Music licensing, explained: Why most Beats 1 shows won’t be podcasts

Wondering why you have to make do with playlists over listening to the full St Vincent's Mixtape archive? Here's the deal.

I've been getting this question a lot lately, so I figured I'd take some time and go into more depth on Beats 1 and how that relates to Apple Music.

Apple Music is divided up into a couple different musical experiences: streaming live radio from Beats 1, the music you can stream and save from the Apple Music catalog, and music you've purchased from iTunses.

Though each feature is (theoretically) seamlessly integrated into the Music app and iTunes app for users, the licensing on the back-end is far more complicated: Each service has a different catalog of music it can play, which makes transitioning between them a bit tricky. When you listen to a show live on Beats 1, you're listening to a catalog of music covered by Apple's radio agreements; when you play back any post-show content on Connect, it's all covered under the Apple Music licensing agreement, which has access to a different subset of albums and songs.

In short: Music rights are a sticky widget. Internet radio rights are different from on-demand streaming rights and purchased rights, and all of this contributes to why you can't just download a podcast of a past Beats 1 show. On top of that, even with the complicated web of deals Apple has concocted, a podcast of a past show just may not be a good user experience.

Want to know more? Here's the deal.

Apple Music Royalties 101

Let's talk terminology

To save you all from falling down a rabbit hole when it comes to music rights, here are a few key things to know.

1. Music rights are made up of two things: composition rights (the right to record and distribute recordings of copyrighted song lyrics), and performance rights (the right to distribute recordings of copyrighted songs). Apple has to license both of these to be able to play or sell a track on Beats 1, Apple Music, or iTunes.

2. Atop that, Apple is licensing several different types of music rights for Apple Music: Downloadable/purchasable music rights (iTunes Store), online live radio rights (Beats 1), and streaming rental rights (Apple Music catalog).

3. Each set of rights results in access to a different music catalog, in part due to the way these licenses work.

Radio

To play a song on internet radio, Apple likely has contracted with performance rights organizations (PROs) like SoundExchange, ASCAP, BMI, and SESAC; this gives them blanket licenses for the songs they play on Beats 1.

In return for Apple paying yearly fees to the PROs for composition rights and set royalties per track for the recordings (something like $0.0025 per stream per listener, according to Sound Exchange), Beats 1 can serve up any recording from the PRO catalogs—whether the specific rights-holder likes it or not. (This is called a statutory license, and is available for any "noninteractive" digital music service—AKA, something where you don't get to choose your songs or see what's coming next.)

For example, Neil Young may rail against internet streaming, but Apple can still play his music on Beats 1 because Young's catalog is covered under PRO licenses.

But these blanket PRO licenses only cover live performance rights (or, in English, a song playing on internet radio). When it comes to listening to that song on-demand or downloading it for offline use, we get into a whole different ballgame.

Streaming

Unlike radio rights, Apple has to negotiate with the record companies directly when it comes to buying, downloading, or listening to a song on-demand. And if a record company or rights-holder doesn't like the deal Apple is presenting, they can say no, and those songs won't be on Apple Music. (I'll note that rights-holders can only prohibit recordings of a song under the streaming model; compositions are covered under statutory licensing, which means Apple is free to offer cover versions of a song for streaming or download—after paying the record company a fee.)

Remember Taylor Swift's impassioned post from last month? That was all about streaming rights.

Not being a record company executive, I have no idea what Apple and the labels have in place for proper compensation, but it's likely these deals involve paying for music per-play, with possibly additional money going to the rights-holders if the track is locally downloaded. We do have a little information about Apple Music's revenue split, courtesy Apple executive Robert Kondrk; he told Re/code that Apple is paying out 71.5-73 percent of Apple Music's subscription revenue to labels.

Purchasing

Apple has had its third set of rights—purchased downloads—for quite awhile now; these are the rights that allow Apple to sell tracks and albums on the iTunes Store.

The financials for these rights are fairly public: Songs are priced at a certain amount, and Apple pays rights-holders 70 percent of that, keeping the remaining 30 percent for itself.

Why you can't play most Beats 1 shows on-demand

Now that we've broken down exactly what Apple's paying for, where, here's my guess as to why you can't play full Beats 1 shows on-demand from Connect, and instead have to settle for playlists.

First: As we explained above, Beats 1's licenses mean that it has access to some songs that Apple Music doesn't. (You can actually see this in action while listening to Beats 1: If you're unable to favorite or download certain songs, chances are Apple doesn't have that track available in its streaming catalog.) As a result, if a DJ played any of those songs while on the air, it would have to be snipped from any later downloadable copy of the broadcast.

Additionally, Beats 1 doesn't offer an "explicit" option for its radio station, opting solely to play "clean" versions of songs. This has nothing to do with the FCC—the U.S. government body doesn't, to my knowledge, have legal authority to impose fines for indecent or profane content online—but it's still a hurdle for users who'd prefer to listen to the explicit versions from a particular show.

Finally, were Apple to make a full show available as one single track, there's currently no way to see which song is playing when, or to skip to the appropriate track you want to listen to. Not only is this bad for usability—you wouldn't be able to heart songs you liked from a past broadcast the way you can from a DJ's playlists—but it's probably more overhead for Apple to figure out royalties.

There's actually a great example of this in Connect right now: Beats 1's weekend One Mixes, where a prominent DJ comes in and mixes a few dozen songs together. Unlike every other show, One Mix is presented in full for download, and shows up on your device (when either played or downloaded) as "One Mix: [artist]" with no individual tracks broken out. It's a good listen, and I'm glad it exists as a whole track—like Girl Talk, mixes are more about the mix than the individual songs—but I'm not sure I'd want this sort of option for every single show on Beats 1.

Do we need a solution?

The thing is, I'm actually not opposed to playlist versions of shows: This way, it's easy to skip songs from past broadcasts I'm not into, or add tunes I love to my library. It also offers those who hate the "DJ talk-over" a chance to listen to the music in its unadulterated form.

But I'm bummed to miss the in-betweens in shows like Elton John's Rocket Hour, St Vincent's Mixtape Delivery Service, and Joshua Homme's Alligator Hour. Don't get me wrong, I'm glad that we can listen to St Vincent's entire interview with Piper in one clip, but I'd much rather hear the 45-second segments placed in-between songs in the playlist, as was originally aired.

If Apple could figure out a way to integrate those custom Connect content-recordings of interviews and non-music segments from shows into the song lists, I suspect most of the complaints we hear now about playlists vs whole-show podcasts would go away.

Of course, that just leaves a hundred other Apple Music problems to complain about. But hey, one down...

[Many, many, many thanks to professor Bill D Herman for helping me make sense of the over-complicated world of music rights, licensing, and One Mix legality.]