Apple might be preparing a heart-to-heart conversation with its music content providers — the record labels.
Apple has reportedly reached out to major labels in an effort to negotiate licensing changes that will let it reduce the monthly subscription price of Beats Music. The deal currently costs $10 a month (excluding discounts to some AT&T wireless customers), which is par for the course in an on-demand online listening platform.
Convincing labels that a lower price point is in their best interest might be an uphill battle. Rhapsody, Spotify, and other streaming libraries had to overcome worries within the music industry that these subscription plans would eat into more traditional music sales. As those sales numbers continue to fall, labels might need some airtight financial reassurance to agree with any changes that could accelerate consumer migration from ownership of music to music subscriptions.
But if any company has a track record of working with record labels to reshape the music industry, it is Apple. No small struggle ensued 11 years ago, when Apple opened the iTunes Music Store, persuading labels to combat piracy by giving consumers a legal way to download single tracks. For the labels, at first, the plan was the lesser of two evils.
Is Apple’s argument that a lower price point will make up the revenue difference by attracting more subscribers? Or does it have some more elaborate scheme in mind with how Beats Music will rebrand into a product that labels, artists, and listeners can get behind? As always, Apple is keeping the details of its plans under wraps.