Apple in talks with music labels to reduce Beats Music streaming fees, report says

Posted:
in General Discussion edited October 2014
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.
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Comments

  • Reply 1 of 22
    macvictamacvicta Posts: 346member
    I'm flabbergasted that I still can't subscibe to Beats through my iTunes account.
  • Reply 2 of 22
    I'm flabbergasted that I'm still waiting for iTunes Radio. It must be over a year now…
  • Reply 3 of 22
    dimmokdimmok Posts: 359member
    I'm flabbergasted I can't seem to figure how to add family members to my 14.99/mo plan …even following all instructions to a tee.
  • Reply 4 of 22
    I'm flabbergasted that spotify is available in my country and on 50+ others but iTunes radio and beats are limited to 3 or 4 countries.
  • Reply 5 of 22
    calicali Posts: 3,495member
    I'm flabbergasted Apple is supposedly trying to undercut artists even more. sounds like BS.

    Artists are basically giving their work away.
  • Reply 6 of 22
    pazuzupazuzu Posts: 1,728member
    Quote:

    Originally Posted by Benjamin Frost View Post



    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. 

  • Reply 7 of 22
    arlorarlor Posts: 490member
    Quote:

    Originally Posted by pazuzu View Post

     

    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.

  • Reply 8 of 22
    arlor wrote: »
    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.
  • Reply 9 of 22
    solipsismxsolipsismx Posts: 19,566member
    arlor wrote: »
    I'm flabbergasted that pazuzu failed to follow the clear rules of this thread.

    I'm flabbergasted that you think his post history would lead to a conclusion of reading compression.
  • Reply 10 of 22
    I'm just flabbergasted
  • Reply 11 of 22



    I think the goal should be to include it with iTunes Match.

     

    Goodbye Spotify, for us, if that happens.

  • Reply 12 of 22
    pazuzupazuzu Posts: 1,728member
    applezilla wrote: »

    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.
  • Reply 13 of 22
    paxmanpaxman Posts: 4,594member
    Quote:

    Originally Posted by pazuzu View Post





    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.

  • Reply 14 of 22
    Quote:

    Originally Posted by cali View Post



    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.

  • Reply 15 of 22
    Quote:

    Originally Posted by paxman View Post

     
    Quote:
    Originally Posted by pazuzu View Post





    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.

  • Reply 16 of 22
    I'm flabby and gassy

    Wait what
  • Reply 17 of 22
    zoetmbzoetmb Posts: 2,419member

    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.

  • Reply 18 of 22
    zoetmb wrote: »
    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.
    SoundExchange only collects/control fees from Internet radio. Beats Music is not Internet radio. Jimmy Iovine always expected Apple to buy him out and he is responsible for those Beats Music fees. Apple might be trying to reduce the monthly subscription to $8 or lower, hence they require to pay lower streaming fees. I won't invest my music catalog in these services because it is mostly a race to the bottom in the valuation of music.
  • Reply 19 of 22
    Hope these talks get killed quick. If Apple wants to make Beats successful they need to have artists on their side by paying out fairly. Spotify already dominates the global streaming market. Most of these services pay indies the same rates or (more often) lower rates than major labels -- and those rates are already quite low.
  • Reply 20 of 22
    dasanman69dasanman69 Posts: 12,976member
    solipsismx wrote: »
    I'm flabbergasted that you think his post history would lead to a conclusion of reading compression.

    I'm flabbergasted that you spelled compression for comprehension.
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