Monday, October 6, 2014

Report: Apple Wants Price Concessions From Music Labels

Apple thinks that price for music subscription services is too high.

Re/Code is reporting Apple is talking to the big music labels about a new set of rights and features it would like to include in a revamped version of the Beats Music service it bought earlier this year. Among the things Apple wants is a new pricing structure that would allow it to sell the service for less than the $10 level it’s at now.

Discussions are in their early stages, sources say, and Apple isn’t planning on overhauling Beats Music until next year. Last month, Apple said a TechCrunch report that the company was planning to “shut down” Beats was not true. But people familiar with the company’s thinking said it might alter the service over time.

Getting the labels to sign off on a price cut will require some work on Apple’s part. After initially resisting the notion of subscriptions, in part because they worried all-you-can-eat services would cut down on CD and download sales, music executives eventually agreed to let services like Rhapsody, Spotify and most recently Beats offer all-you-can-stream services for $10 a month.

Now download sales are indeed dropping, while revenue from streaming services is picking up. But it’s unclear how much of the download decline should be attributed to subscription services like Spotify and Beats, and how much of it stems from the use of free services like YouTube, Pandora and even Apple’s own iTunes Radio.

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