Apple’s announcement regarding the acquisition of Beats came at a time when it was being rumored that the company was in talks with major music labels for a new music streaming service. When it purchased Beats, Apple got Beats Music as well, a relatively new streaming service that was launched prior to the acquisition. Recently there has been speculation about the future of this service, with some reports even claiming that Apple will kill it, and there’s a new report today suggesting Apple may relaunch Beats Music with a significant price cut.
The industry standard subscription fee hovers around $10 as far as music streaming services are concerned. Even Beats Music started out at the $9.99 per month price point. Looks like Apple wants to undercut all rivals by offering a significantly cheaper option.
Re/code reports that Apple is looking to relaunch Beats Music with subscription fee set at $5 per month, certainly a new territory for a service of this sort. Information relayed to the scribe by “people who’ve heard the pitch second hand,” Apple is arguing for this price cut with music labels because its best iTunes customers spend $60 a year on music downloads, which works out to $5 per month.
Apple may be on to something here but this puts music labels in a dilemma. They can’t agree for price cuts that are exclusive to Apple. Other streaming service providers won’t like that and would want a piece of the pie as well.
So either Apple will end up bringing down subscription fees across the entire market or its ambitious plan to bring Beats Music down to $5 per month won’t get much traction.
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