Apple in talks with music labels to reduce Beats Music streaming fees, report says
According to a report on Thursday, Apple is in talks with major music labels over content licensing price cuts to be applied to Beats Music, which could result in subscription fee drops some time next year.
Citing people familiar with the talks, Re/code reports talks are in very early stages, but Apple is requesting a "new set of rights and features" from music labels ahead of a Beats Music refresh some time in 2015.
While details of the new feature set remain unknown, the publication says Apple is pushing for lower content licensing fees that would allow Beats to charge less than the current $10 per month going rate.
The music industry has been opposed to releasing content to for-pay streaming services like Spotify, but market shifts toward free streaming options have proven difficult for the sector. As noted by Re/code, digital download sales are going the way of the CD, while streaming music revenue is up. Due to the nature of streaming platforms, it is unclear whether the dip in downloads can be attributed to free streaming or subscription services.
A rumor earlier this month claimed Apple was planning to shut down Beats Music and roll the service into iTunes Radio. But the speculation was quickly debunked by Apple spokesman Tom Neumayr, who said the company has no such plans. Neumayr did not comment on the possibility of a rebranding, which some say could happen in the coming months.
Citing people familiar with the talks, Re/code reports talks are in very early stages, but Apple is requesting a "new set of rights and features" from music labels ahead of a Beats Music refresh some time in 2015.
While details of the new feature set remain unknown, the publication says Apple is pushing for lower content licensing fees that would allow Beats to charge less than the current $10 per month going rate.
The music industry has been opposed to releasing content to for-pay streaming services like Spotify, but market shifts toward free streaming options have proven difficult for the sector. As noted by Re/code, digital download sales are going the way of the CD, while streaming music revenue is up. Due to the nature of streaming platforms, it is unclear whether the dip in downloads can be attributed to free streaming or subscription services.
A rumor earlier this month claimed Apple was planning to shut down Beats Music and roll the service into iTunes Radio. But the speculation was quickly debunked by Apple spokesman Tom Neumayr, who said the company has no such plans. Neumayr did not comment on the possibility of a rebranding, which some say could happen in the coming months.
Comments
Artists are basically giving their work away.
I'm flabbergasted that I'm still waiting for iTunes Radio. It must be over a year now…
As long as it maintains that Beats logo, I will not even preview it.
As long as it maintains that Beats logo, I will not even preview it.
I'm flabbergasted that pazuzu failed to follow the clear rules of this thread.
I'm flabbergasted that pazuzu failing to follow the rules of the thread didn't prevent them from being reinstated immediately following their post.
I'm flabbergasted that you think his post history would lead to a conclusion of reading compression.
I think the goal should be to include it with iTunes Match.
Goodbye Spotify, for us, if that happens.
I would love to try out the $3Billion algorithm but only if it comes under the iTunes mantle.
I would love to try out the $3Billion algorithm but only if it comes under the iTunes mantle.
What an arbitrary self imposed limitation. I am flabbergasted.
I'm flabbergasted Apple is supposedly trying to undercut artists even more. sounds like BS.
Artists are basically giving their work away.
I'm flabbergasted that you think they are trying to undercut the artists when it's the labels who take the majority of the cut anyway. The artists have been hurting for several years.
I would love to try out the $3Billion algorithm but only if it comes under the iTunes mantle.
What an arbitrary self imposed limitation. I am flabbergasted.
I'm flabbergasted by your disloyalty to the iTunes brand.
Wait what
While the three major record companies are so desperate for any revenue, they may be browbeaten into agreeing to lower streaming fees (although I think this would be largely controlled by Sound Exchange, not the labels) if they thought total revenue would increase, the record industry is dying and they're not going to want to take any cuts.
The only areas that are growing are vinyl (but that's from such a small base that it's still insignificant) and streaming. Downloading has declined.
If we take the 2014 1st half numbers and double them to compare them to full year 2013, Sound Exchange revenues are up 10%, paid subscriptions are up 18% and on-demand ad supported streaming is up 50%, but those three categories combined were still only $1.438 billion in 2013 and $860 million for the first half of 2014. Album and single downloads are down about 11% from last year. CDs are down 32%.
The U.S. record industry as a whole (physical and virtual) peaked in 1999 at $14.585 billion at list prices (over $20 billion in 2014 dollars). In 2013, it was just under $7 billion. For the first half of 2014, it's only $3.19 billion.
If you're a record company executive and you know that Apple probably vastly overpaid for Beats, why would you be willing to take a cut in streaming fees? They should have figured out how to make money from Beats before they agreed to pay the price they paid.
I'm flabbergasted that you spelled compression for comprehension.