Apple's rebranded Beats Music service won't have free subscription tier - report
When Apple launches a rebranded Beats Music later this year, the streaming service may not have an ad-supported free tier, according to a new report, citing sources who allegedly spoke with Apple's Eddy Cue and Beats co-founder Jimmy Iovine.
Major record labels are reportedly unhappy at the prevalence of free music available from sources like Spotify and YouTube. To win their favor, Apple has been telling labels it can help them "get behind a paywall," the sources explained to Re/code.
That means that beyond a trial period, Apple's rebranded Beats Music service will demand a paid subscription, just as it does in its current form.
To keep the public interested, Apple is said to be angling for high-profile artist exclusives. These would only be temporary, simply delaying when services like Spotify would get them. The company is also still pushing to have a monthly fee under $10, possibly around $8.
Both Spotify and the current incarnation of Beats Music charge $10 per month. Going lower poses the risk of both Apple and the record labels losing money, but Apple's argument has been that a cheaper price will draw in more subscribers.
Industry sources reportedly said that Universal Music Group CEO Lucian Grainge has been especially vocal about paywalls. The label is currently renegotiating its deal with Spotify, and said to be pushing the service to change its business model, which offers ad-supported free music while prodding people to become paid subscribers. The executive was once an early backer of Spotify, but now contends that the service is hurting downloads at storefronts like iTunes without generating enough paid customers of its own.
Spotify's communications and public policy head, Jonathan Prince, countered that 12 percent of former iTunes customers have joined Spotify, and that 40 percent of those people have become Spotify Premium subscribers, according to Re/code.
"The great majority of our users are not coming from iTunes," Prince said. "We're bringing people into the ecosystem who haven't been paying for music."
It's still uncertain how and when Apple will relaunch Beats Music. The company is believed to be mired in negotiations, and likely to forego an announcement at Monday's Apple Watch event. Instead, a debut could happen at June's Worldwide Developers Conference.
Apple is hoping its acquisition and forthcoming rebranding of Beats Music could help offset slumping music sales on the iTunes Store. The addition of Beats Music to the iTunes lineup will allow Apple to enter the subscription music service market, where the growth is currently occurring.
Apple acquired Beats Music last year as part of a $3 billion deal that also included the Beats headphones business. A rebranding of the service would bring it more tightly in line with the rest of the iTunes service lineup.
Major record labels are reportedly unhappy at the prevalence of free music available from sources like Spotify and YouTube. To win their favor, Apple has been telling labels it can help them "get behind a paywall," the sources explained to Re/code.
That means that beyond a trial period, Apple's rebranded Beats Music service will demand a paid subscription, just as it does in its current form.
To keep the public interested, Apple is said to be angling for high-profile artist exclusives. These would only be temporary, simply delaying when services like Spotify would get them. The company is also still pushing to have a monthly fee under $10, possibly around $8.
Both Spotify and the current incarnation of Beats Music charge $10 per month. Going lower poses the risk of both Apple and the record labels losing money, but Apple's argument has been that a cheaper price will draw in more subscribers.
Industry sources reportedly said that Universal Music Group CEO Lucian Grainge has been especially vocal about paywalls. The label is currently renegotiating its deal with Spotify, and said to be pushing the service to change its business model, which offers ad-supported free music while prodding people to become paid subscribers. The executive was once an early backer of Spotify, but now contends that the service is hurting downloads at storefronts like iTunes without generating enough paid customers of its own.
Spotify's communications and public policy head, Jonathan Prince, countered that 12 percent of former iTunes customers have joined Spotify, and that 40 percent of those people have become Spotify Premium subscribers, according to Re/code.
"The great majority of our users are not coming from iTunes," Prince said. "We're bringing people into the ecosystem who haven't been paying for music."
It's still uncertain how and when Apple will relaunch Beats Music. The company is believed to be mired in negotiations, and likely to forego an announcement at Monday's Apple Watch event. Instead, a debut could happen at June's Worldwide Developers Conference.
Apple is hoping its acquisition and forthcoming rebranding of Beats Music could help offset slumping music sales on the iTunes Store. The addition of Beats Music to the iTunes lineup will allow Apple to enter the subscription music service market, where the growth is currently occurring.
Apple acquired Beats Music last year as part of a $3 billion deal that also included the Beats headphones business. A rebranding of the service would bring it more tightly in line with the rest of the iTunes service lineup.
Comments
Fixed.
Thanks to Google for ruining another industry.
I'm telling you Apple really needs to hamstring Google before they ruin everything great and replace it with cheap POS that pushes ads to us 24 hours a day. Apple needs to enter search to weaken Google.
Apple needs to continue doing what they're doing. Ensuring nothing BUT search is a revenue generator for Googs, and then continue to hammer on the privacy and data mining so that Google as a whole loses customers. Then change the default browser option in Safari, continue to use Bing as the backend for Siri and Spotlight, etc.
PING and iTunes Radio (USA only..) wasnt exactly much of a friend to the music industry was it?
Freetards are the Internet’s homeless population. Very little incentive for Apple to have an ad-supported free tier as these cheapskates won’t spend money on anything they don’t absolutely have to. I will willingly pay for a WELL-curated streaming service that produces the music I like to listen to.
As far as I am concerned the 'free' tier is basically, well here's a novelty, 'buying*' the music on the iTunes store as you do now.. Seems fair enough. Apple adds a service, they can sell it. Why they should need to offer a free tier is beyond me. They know how to market without pushing up the price for everybody else (which is what happens if you end up with a free tier - they're subsidised by definition). Will help them reduce from 10 to 8 dollars per month.
[*it's defined as a Service not a Good, as per European Court of Justice ruling yesterday, but that's another story]
Can't imagine why I would pay for this. iTunes Radio works great for me and the ads are infrequent and unobtrusive.
Just wish it was available in a browser so I didn't have to use a computer with iTunes installed. Can't put it on my work computer.
http://techcrunch.com/2014/11/12/youtube-music-key-subscription-service/
Apple's iRadio on the other hand debuted as free. Yeah, must be all Google's fault for charging for their music services rather than giving them away. :rolleyes:
YouTube is the real problem as far as the labels are concerned. As I understand it, most kids use YouTube to search for and listen to music.
That's certainly what my kids do. They don't have portable music devices, so contra TS they're not ripping songs off it. Why rip when you can stream?
Alternative to what? Theft?
Apple's iRadio on the other hand debuted as free. Yeah, must be all Google's fault for charging for their music services rather than giving them away.
What's iRadio? Never heard of it.
iTunes Radio, on the other hand, has a paid category that comes with iTunes Match. There's also the fact that it's the most integrated buying experience possible.
Why are you here, anyway? We don't need Mountain View's position.
YouTube pays royalties too, even on the "free" service. A tiny bit of research on your part would have shown that. In fact Google has paid out over a $B in song royalties in just the last couple of years. So while users of the free version of Youtube may not pay, Google certainly does.
http://www.rollingstone.com/music/news/youtubes-billion-dollar-payout-provide-new-revenue-for-musicians-20140205
And the ad-free YouTube Music is NOT free as you'd also have noted if you'd read the link I posted earlier. I'll post it again for you as I know you prefer to know the facts about things instead of listening to FUD.
http://techcrunch.com/2014/11/12/youtube-music-key-subscription-service/
a
It would be nice if the "music industry" started signing musicians instead of "stars" and put out music I wanted to buy.
I buy a few things on iTunes here and there -- mostly songs my son or I are learning for our music lessons/"bands" we play in or for the daughter's music lessons. Most of which I would never have bought otherwise. (And no I don't use streaming services, free or otherwise).
I did buy the Beatles boxed set and probably will get Yes's latest from last year.
And some Joe Bonamassa was bought as a DVD (due to YouTube by the way, where I first saw it)
Apple is really going to have to offer something very special if streaming is going to work out for them. There are so many good services out there already, Spotify still overall, the best apparently, that I fear this exercise in music distribution is going to ultimately fail for them, with billions of Dollars down the drain as a result...maybe high-resolution audio streaming across all of Apple's global markets from day one would help, but very unlikely to happen. I still think they overpaid big time for Beats.
YouTube has replaced Napster, essentially.
YouTubeGoogle should be sued out of existence by artists.
Artists, not labels. They should form a mega-union, pool millions of dollars for lawyers, and strike.
Apple is really going to have to offer something very special if streaming is going to work out for them. There are so many good services out there already, Spotify still overall, the best apparently, that I fear this exercise in music distribution is going to ultimately fail for them, with billions of Dollars down the drain as a result...maybe high-resolution audio streaming across all of Apple's global markets from day one would help, but very unlikely to happen. I still think they overpaid big time for Beats.
They didn't overpay for Beats. Even if you're ONLY looking at their headphone business, it's an EXTREMELY profitable one, and they would make the money back on that in short order and have an extra revenue generator. I expect sales to increase further now that they're being pushed in Apple Stores. They also got the streaming service, and some very high profile and experienced people. Apple paid what it believed this stuff is worth, and as Tim has said again and again, they bought Beats for what it could not, not what it currently is.
You're absolutely correct IMHO. I think the Beats buy may turn out to be a bargain.
Alternative to what? Theft?
GoogleAndroidYouTube is about nothing but getting things free/cheap and only giving up your data privacy, location, and identity to the highest and lowest bidder, i.e. the Mountain View Ad Company's real customer, ad spammers.