Apple reportedly backs down in push to lower relaunched Beats Music service prices
As it continues to negotiate with music labels on a rumored Beats Music relaunch, Apple has reportedly surrendered on one of its key initiatives: lowering the cost of the rebooted service to $8 per month.
Industry sources quoted by Billboard say that the labels have held firm on wanting a $10 price tag, the amount currently charged by Beats Music and by Apple's main rival in streaming music, Spotify. If Apple were to go ahead with a price cut, it would have to absorb the losses.
Just this week Re/code indicated that Apple was still hoping to hit the $8 mark. Both the Billboard and Re/code sources have, however, agreed that Apple will not offer an ad-supported free tier least beyond an initial trial period.
The Billboard sources also support the claim that Apple is working to secure exclusives from musicians and labels. These could help lure listeners, but one source comments that the company may have to pay high sums to make it happen.
"Apple is one of the biggest companies in the world," the person said. "If they want exclusive content, they're going to have to get out the checkbook."
Details of the upcoming relaunch -- including a date or even what the service will be called -- have so far remained shrouded. It's commonly expected that Beats Music will be rebranded under the iTunes label, and offer on-demand access to music on the iTunes Store. Some rumors have hinted that like Beats Music the service will have a presence on Android, a platform Apple has usually avoided and frequently attacked via marketing and lawsuits.
Industry sources quoted by Billboard say that the labels have held firm on wanting a $10 price tag, the amount currently charged by Beats Music and by Apple's main rival in streaming music, Spotify. If Apple were to go ahead with a price cut, it would have to absorb the losses.
Just this week Re/code indicated that Apple was still hoping to hit the $8 mark. Both the Billboard and Re/code sources have, however, agreed that Apple will not offer an ad-supported free tier least beyond an initial trial period.
The Billboard sources also support the claim that Apple is working to secure exclusives from musicians and labels. These could help lure listeners, but one source comments that the company may have to pay high sums to make it happen.
"Apple is one of the biggest companies in the world," the person said. "If they want exclusive content, they're going to have to get out the checkbook."
Details of the upcoming relaunch -- including a date or even what the service will be called -- have so far remained shrouded. It's commonly expected that Beats Music will be rebranded under the iTunes label, and offer on-demand access to music on the iTunes Store. Some rumors have hinted that like Beats Music the service will have a presence on Android, a platform Apple has usually avoided and frequently attacked via marketing and lawsuits.
Comments
Apple is in a unique position to introduce a transparent, flat structure, where the money from the subscriber goes directly to only the artists that the user is listening to each month. Not mysteriously disappear into a big hole.
A user pays $10, listening to two favourite albums and a bunch of popular playlists, and a few favourite songs. The money should be divided proportionally straight to them. Fair and square.
Price cut? They nuts? Even less for the artists? I don't care about the labels. I care about the artists. What if the artists pressured Apple? Not the labels.
Apple is in a unique position to introduce a transparent, flat structure, where the money from the subscriber goes directly to only the artists that the user is listening to each month. Not mysteriously disappear into a big hole.
A user pays $10, listening to two favourite albums and a bunch of popular playlists, and a few favourite songs. The money should be divided proportionally straight to them. Fair and square.
No, Apple is not in a position to directly pay artists, for a bunch of reasons, not least of which is because the artists no longer 'own' their work [for the VAST majority of artists]. The labels do. And there is nothing Apple can do about that. There's also the various mandatory licensing organizations mandated by law/regulations.
If there is any industry that defines regulatory capture, it is the audio/visual industry.
The only way Apple 'gets around' the labels would be to for Apple to become a label themselves and sign the artists directly.
No, Apple is not in a position to directly pay artists, for a bunch of reasons, not least of which is because the artists no longer 'own' their work [for the VAST majority of artists]. The labels do. And there is nothing Apple can do about that. There's also the various mandatory licensing organizations mandated by law/regulations.
If there is any industry that defines regulatory capture, it is the audio/visual industry.
The only way Apple 'gets around' the labels would be to for Apple to become a label themselves and sign the artists directly.
Well.. perhaps I wasn't clear. Of course, any artist managed by a management, not owning the master, that has inked a sucky, or generous deal with a label etc. is going to have to split the revenue according to the contract/ law and regulations. This was not my point. (Although I think most artists should think hard about going 100% indie. There's much more to gain there for 99% of the artists that are not the size of Beyoncé.)
My point is, follow the money. If I pay $10 one month, and just listen to one song, once. Where does my $10 bucks go? I can guarantee it doesn't go to that song, and the right holders of that song. The money is GONE forever. This structure must be changed. And Apple is in the position to making this distribution a lot more fair.
Well.. perhaps I wasn't clear. Of course, any artist managed by a management, not owning the master, that has inked a sucky, or generous deal with a label etc. is going to have to split the revenue according to the contract/ law and regulations. This was not my point. (Although I think most artists should think hard about going 100% indie. There's much more to gain there for 99% of the artists that are not the size of Beyoncé.)
My point is, follow the money. If I pay $10 one month, and just listen to one song, once. Where does my $10 bucks go? I can guarantee it doesn't go to that song, and the right holders of that song. The money is GONE forever. This structure must be changed. And Apple is in the position to making this distribution a lot more fair.
No, they aren't. Because the big labels control the vast majority of music, and in particular the "popular" songs of the day, so Apple HAS to have a deal with them, otherwise only a small group of people will bother with paying for Apple's service. And those labels will force the distribution to be fair only for them.
If anything, Apple's deal will already be more 'fair' for the artists because right now, the other monthly services have been forced to give up significant portions of equity in their companies to the major labels in return for the privilege of being able to license their music. So the labels can get bargained down in licensing fee's [which they 'share' with their artists], while actually making a bundle of money via dividends from the services which they don't share with their artists [total conflict of interest, and probably illegal, but nobodies going to do anything about it].
I believe Apple is trying to "become the music industry". Many sources have reported that Apple is both scouting for talents and artists, and expressed interest in offering their own music. Whether they succeed is yet to be seen.
I think the most important today is to recognise the underground, the indies. This is where music comes from. They are the future, and the acceptance, and interest in independent music of all genres is becoming more and more substantial. I can't see Apple fully embracing the indies, but if they figure it out, I think they have the power to take down YouTube for music.
This service shouldn't be any less than $15.
Apple should do what they do with everything else, charge more but deliver a BETTER product.
I think that if Apple charge $10 a month or more, they will have a tiny audience. Most people simply don't spend that on music. I think the average is something like two albums a year. $5 might see a take-up of note.
If they only do a streaming service, I wouldn't be interested. If they give the option to buy for a reduced fee, then great.