Apple has partnered with Warner Music Group resulting in Apple Music paying a smaller percentage of revenue than earlier when it was launched in 2015.
With the rise in on-demand music, music rights holders are ok with receiving lower rates as long as services like Apple Music continue to sign up subscribers.
Currently Apple pays record labels 58% of its sales and plans to drop this rate to 55% this year.
Further reductions could be witnessed if subscriptions continue to grow at a rapid pace.
Apple also plans to strike a similar deal with Sony Music Entertainment.