After long speculation about how Apple will swing back to the front of the music game after ceding territory to streaming music upstarts, today we learned firmer details about the tech company’s own forthcoming streaming service, thanks to sources speaking to The New York Times. Unlike the popular streaming music service Spotify, Apple’s product will not include a free tier.
Apple will charge the streaming-industry-standard $10 per month, the Times reports, a strategic move to keep artists and studios happy and ensure revenue. Whether the artists themselves will get more revenue is unclear. That Spotify offers a limited free version was one of the major reasons for Taylor Swift and other artists’ very public departure from Spotify–Swift says allowing people to listen to music for free devalues musicians. So it is a smart move for Apple to go paid-only with its service. Wooing artists is one of the tentpole strategies that Fast Company writer Tyler Hayes recently speculated that Apple would use to close the gap with Spotify, which Apple could do by treating artists like app developers and providing them access to analytics and the ability to post music on their own.
Regardless, Apple is way late to the streaming game, likely out of complacency due to its dominance in the music downloading market. That dominance and subsequent revenue earned Apple power over studios, as the Times describes, back when $1-per-song was revolutionary. But Spotify has been consuming Apple’s share of the music market since launching in America in 2011, and Apple’s failure to get studios in on a cheaper monthly subscription game–according to the Times, it tried to launch at $8 a month instead of the industry-standard $10–means Apple doesn’t have the influence to get studios in line anymore, says the Times.
What Apple does have is Beats and the Beats streaming music service, which Apple bought for $3 billion last year, and Nine Inch Nails frontman Trent Reznor. Sources told the Times that the new iTunes app, which Reznor is designing with Beats cofounder Jimmy Iovine and a smattering of Apple and Beats employees, will feature Apple’s new streaming service within it. The streaming service itself will have a lot of the Beats Music streaming service’s DNA and is being tested within the development of a new iOS version, code name “Copper,” that is slated for release later this year.
While not considered a free tier of the new streaming service, iTunes Radio will remain free and will get an overhaul. Fast Company predicted that Apple would use iTunes Radio as a free beachhead to lead wary customers into purchases, perhaps even slipping in prompts for listeners to buy mini-packages to stream an artist’s oeuvre–but it looks like iTunes Radio and the unnamed streaming service will remain siloed. What may happen is that former BBC DJ Zane Lowe, who joined Apple last month, may spearhead an initiative to regionally target iTunes Radio listeners, says the Times.
At the end of the day, though, Apple–which made $183 billion in revenue last year–has the money to experiment with a streaming music service and little to lose if it fails.
[via The New York Times]