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Apple Asking Music Labels to Cut Prices on Music Streaming Subscriptions

Thursday October 2, 2014 4:52 pm PDT by Husain Sumra
beatsApple is asking music labels to cut prices on music streaming subscription services so that it can offer its new, revamped Beats Music service for less than $10 a month, reports Re/code. The Cupertino company is also looking to add new features to the service.
Sources say 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.
Apple isn't planning on overhauling Beats Music until next year, and discussions with music labels are in early stages. In late September, it was rumored that Apple was planning on introducing a revamped Beats Music in early February, presumably timed to debut alongside the Grammy Awards on February 8.

The company has tried to undercut competitors with music rates before, trying to pay half the royalty rate that Pandora paid while in negotiations for what would become iTunes Radio in early 2013.

Re/code notes that music executives were once worried about streaming services cannibalizing CD music sales but eventually agreed to deals with streaming services, which some music industry observers feel is priced too high as the market for consumers who want to pay $10 a month to stream music is limited. In August, a report from Midia Research suggested only 25 percent of consumers pay $10 for music every three months.

Tags: Beats Music, Apple Music Guide
[ 215 comments ]


Top Rated Comments

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farewelwilliams
59 months ago
"ok Apple, sure."

*goes to artists*

"hey umm..you guys will now get nothing. kthx"
Rating: 25 Votes
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kwikdeth
59 months ago
the race to the bottom accelerates. its a wonder anyone even tries to make a living on music anymore.
Rating: 24 Votes
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KieranDotW
59 months ago
It still boggles my mind when people justify illegal downloading because of how much money the label takes. Sure it's bad, but I'd rather have the artist get something than literally nothing.
Rating: 23 Votes
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Moonlight
59 months ago
The idea of Music labels is so antiquated. Music creators shouldn't need labels anymore. They are worthless middlemen.
Rating: 22 Votes
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gate5blues
59 months ago
Streaming Model Screws Artists

Honestly, most streaming services are already only paying artists just more than 1 penny a play... That means you as a listener would have to listen to that song 70 times to give the artist even close to the 70 cents they make on 99 cent download today.

Take a look at your iTunes play count for the most popular song in your library and you'll get a good idea of why this is bad for the artists... and ultimately the Listener and Apple (if they aren't paying artists well).

I know many artists who are starting to shun the streaming model for services such as BandCamp and are ultimately making more money because of it...

Apple, please don't undercut artists. Pay them what they are worth and value the arts.
Rating: 18 Votes
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subsonix
59 months ago

The idea of Music labels is so antiquated. Music creators shouldn't need labels anymore. They are worthless middlemen.


You underestimate the work, skill and money needed to successfully record and launch an artist. You may be a great artist, but suck at the administrative part, having someone taking care of that for you enables you to concentrate on exactly what you are good at.
Rating: 18 Votes
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RockSpider
59 months ago
I sometimes wonder why I really dislike Apple and then this.
Rating: 15 Votes
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Moshe1010
59 months ago
Spotify > anything Apple would ever try to make.
Rating: 14 Votes
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vartanarsen
59 months ago
Whatever happened to buying a god damn song, organizing it on your iTunes library, and then syncing it with your iPod Classic?
Rating: 10 Votes
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69Mustang
59 months ago
Serious question, not snark.

What's stopping Apple from charging less for Beats Music right now? :confused:

Because the way this looks to me is pretty crappy and greedy as hell.

Snark starts now.

:apple: to Music Labels: "Hey buds, can you do us a favor and lower your prices?"

ML to :apple:: "Uhhh, whaaaa? Why would we do that?"

:apple: to ML: "Oh we want to maintain our absurdly high profit margin. If you lower your profit, you can pay artists less too. That way you break even. We, on the other hand, look like a hero to our users since we got the subscription cost lowered for our Beats Music. Since you'll be lowering our cost we can still maintain our lovely, lovely margins. In the end, don't we all want to see us continue to add to the obscene stockpile of cash we have?

ML to :apple:: "You do realize the only party that benefits from this is you, right?

:apple:: :)
Rating: 10 Votes

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