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Apple is still planning a major revamp of its music services, an effort that’s being led by Nine Inch Nails front man Trent Reznor, according to a report Wednesday by The New York Times.
The effort would reportedly include a long-expected subscription music-streaming service developed in cooperation with the brains behind Beats, the streaming service and maker of high-end headphones Apple acquired last year for $3 billion. The new Apple streaming service would incorporate some of characteristics as the Beats Music app, including curated playlists and a more vivid visual appeal, sources described as familiar with the matter told the Times.
Apple did not immediately respond to a request for comment.
Ever since Apple closed its deal for Beats in August, market watchers have been wondering about Apple’s plans. So far, it’s done little publicly with Beats besides pushing the music service with current iTunes customers and promoting Beats headphones in Apple Stores. And thus far, iTunes and Beats have remained separate, though several reports say that will change this year.
While Apple hasn’t spoken publicly about its streaming-music plans, the much-discussed app revamp was first revealed in a Financial Times report late last year, which said that as early as 2015 the company planned to load the subscription music service it obtained from Beats into the iOS operating system powering iPhones and iPads. It was thought that by preloading the service on to its devices, Apple would gain an edge in promoting its own offer over the competition, which includes Spotify and Rhapsody. A subscription music service would represent a new revenue stream and further lock customers into Apple’s ecosystem.
Reznor, the chief creative officer for Beats, hinted at the work he was doing at Apple late last year in an interview with Billboard magazine.
“I am on the side of streaming music, and I think the right streaming service could solve everybody’s problems,” Reznor told Billboard. “Ownership is waning. Everybody is comfortable with the cloud — your documents, who knows where they are? They are there when you need them. That idea that I’ve got my records on the shelf doesn’t feel as important even to me as it used to. I just think we haven’t quite hit the right formula yet.”
Apple recently tried and failed to persuade the record labels to lower their licensing fees and make it possible to offer a subscription streaming-music plan to consumers for $8 a month. That subscription cost would have been cheaper than the $9.99-a-month plans offered by Spotify, Rdio, Rhapsody and Google, but more expensive than Pandora’s premium, ad-free plan, which costs $4.99 each month.
Streaming music has gained considerable traction with consumers, generating more revenue last year than CD sales. According to data on music sales from the Recording Industry Association of America, sales in the US from streaming music were $1.87 billion in 2014, while CD sales were $1.85 billion. Streaming revenue — which includes earnings by companies like subscription services like Spotify and Apple’s Beats Music, radio-like services such as Pandora and Sirius XM, and ad-supported operations like Vevo, YouTube and free versions of Spotify — jumped 29 percent last year, while CD revenue dropped 12.7 percent.
