Apple May Cut Beats Music Subscription Price

Marc Hogan

By Marc Hogan

Lead News Writer
on 10.03.14 in News

Listeners might soon be able to pay less for on-demand music streaming. Apple is negotiating with major labels for an overhaul of its Beats Music service that would allow for a price lower than the current $10 a month, reports Re/code, citing unnamed sources. Such a deal would potentially shake up the on-demand streaming landscape, where services such as Rhapsody and Spotify also generally abide by the $9.99 price point.

The talks are still preliminary, and Apple doesn’t have the Beats Music revamp penciled in as happening until next year, according to Re/code‘s sources. What’s more, convincing the labels to accept a lower price might not be easy, considering executives were slow to embrace subscriptions due to concerns they would eat into sales. In the first half of this year, though, growth in revenue from streaming services, including online radio, helped offset a decline in CD and download sales. (A Beats rep didn’t immediately respond to Wondering Sound’s request for comment.)

Apple’s next plan for the music business has been the subject of much speculation. U2′s Bono recently told Time about what it described as a “new digital music format in the works” from the iPhone maker, though Billboard later reported this didn’t refer to a new file format such as Neil Young’s Pono. Apple announced its deal for Beats Music and Beats Electronics this summer. Last month, Apple told Re/code a Techcrunch report it would shut down Beats was “not true,” but the Apple spokesperson didn’t elaborate.

As Billboard notes, if Apple may be the only streaming provider that could pull off such a price cut. Apple’s sheer size and its employment of music mogul Jimmy Iovine through the Beats deal give it clout. And its $164 billion cash pile would make it easier for it to wait out the price drop until it became profitable, which streaming services so far essentially aren’t. Meanwhile, Google‘s long-awaited YouTube music subscription, which has put the search giant in conflict with some indie labels, could be another competitor.

Whatever eventually gets confirmed, the idea that Apple might want to try to do for streaming what its iTunes Store did for downloads is hardly out of the question.