Related Articles
Apple
If at first you don’t succeed, try, try again.
Ahead of an expected relaunch next month of the Beats Music streaming service, Apple is pushing labels to choke off free streaming options at competitors like Spotify, according to the Verge. The Department of Justice, the main US competition watchdog agency, is interviewing music executives about the practices, the report said, citing unnamed sources.
Apple has been grappling to find a competitive edge in subscription music streaming, a format that it resisted for years while startups like Spotify took the lead. Now that digital downloads are declining because of streaming’s growth, Apple needs to catch up. Its other attempts to get special treatment from labels have fallen flat, but a push to limit free options comes as the music industry has begun to question them. Services like Spotify have pitched free tiers as the gateway for people to pay for subscriptions, but labels and artists are unhappy with the degree people listen without paying by sitting through ads.
Apple didn’t immediately respond to messages seeking comment.
The maker of Macs and iPhones is expected to relaunch the Beats Music service — which it acquired last year in a $3 billion deal for its headphones- making parent — in June as a subscription music service deeply integrated into its iTunes store and mobile operating system, iOS. To give Beats an edge, the company earlier angled to offer a cheaper subscription rate than the industry standard of $10 a month, to no avail. It sought high-profile exclusives for its service, prompting Europe’s competition body to start probing Apple’s practices as well.
The Verge report also said Apple offered to pay YouTube’s music licensing fee to Universal Music Group if the label stopped allowing its songs on YouTube. Universal Music Group is the world’s biggest music label, and Google’s video site YouTube is the biggest free streaming service on the Internet.
Spotify, which had 15 million paid members and 60 million active users as of January, is the biggest subscription streaming service.
Internet radio offerings like Pandora pay royalties largely through a statutory license rather than direct deals with labels. Apple negotiations wouldn’t affect those free listening options.
