Apple In Talks To Relaunch Beats Music Streaming Service For $5 Per Month
Don't look now, but we might be on the verge of a price war in the streaming music space. Music labels probably won't let that happen to the degree that we'd like, though if Apple is successful in relaunching its Beats Music subscription service at $5 per month as it reportedly wants to do, labels and music artists will feel the pressure from competing services like Spotify to follow suit.
News of what Apple is trying to do comes just hours after Spotify announced a new family plan starting at $14.99 per month for two users. Each additional user runs another $5 per month for their own Premium plan (a $9.99 value), and you can have up to five users total, billed together but each with their own account and song preferences to manage.
According to Recode and the people it spoke with who have "heard the pitch secondhand," Apple is trying to convince music labels for deeper price cuts. The end goal is to be able to offer a Beats Music subscription for $5 per month, which is half of what it costs today.
Why might the labels bite? Apple points out that its best iTunes buyers spend roughly $60 per year on downloaded music, which works out to $5 per month. If Apple could offer a Beats Music subscription for that price, it stands to reason that its download customers would switch over to the streaming model, thereby generating the same amount of revenue for music labels. That kind of discount could also attract a whole bunch of new subscribers, so in the end, music labels stand to gain even more money.
It all makes sense in theory, but convincing labels of the logic might prove tricky even for Apple.
News of what Apple is trying to do comes just hours after Spotify announced a new family plan starting at $14.99 per month for two users. Each additional user runs another $5 per month for their own Premium plan (a $9.99 value), and you can have up to five users total, billed together but each with their own account and song preferences to manage.
According to Recode and the people it spoke with who have "heard the pitch secondhand," Apple is trying to convince music labels for deeper price cuts. The end goal is to be able to offer a Beats Music subscription for $5 per month, which is half of what it costs today.
Why might the labels bite? Apple points out that its best iTunes buyers spend roughly $60 per year on downloaded music, which works out to $5 per month. If Apple could offer a Beats Music subscription for that price, it stands to reason that its download customers would switch over to the streaming model, thereby generating the same amount of revenue for music labels. That kind of discount could also attract a whole bunch of new subscribers, so in the end, music labels stand to gain even more money.
It all makes sense in theory, but convincing labels of the logic might prove tricky even for Apple.
