Apple wants to convince music labels to end the free streaming tiers of major streaming services. The company plans to start with Spotify. Out of the 60 million people using Spotify, only 15 million use the premium, paid service.
Apple has been trying to use its power to end all free streaming services. This move would put the company in a prime position to grab the discarded free users when Apple’s streaming service becomes available in the near future. It is slated to roll out in June, according to Billboard, but that is not entirely set in stone.
Writer Jordan Weissmann for Slate Magazine says that “music labels still own a significant financial stake in Spotify, which makes it seem a tad, well, unlikely that they’d try to even the playing field at all for Apple.”
However, the news comes before the relaunch of Beats. The point of these backdoor plans is to lower the price of streaming services from the standard of $9.99 to $7.99 when Apple launches its own.
Over the years, Apple has lost revenue due to the popularity of the free streaming options out there. People are not interested in buying from iTunes when the same music is available for free elsewhere.
These backdoor negotiations have attracted the attention of the Department of Justice because of possible violations of anti-trust laws. Apple reportedly has had a history of strong-arming companies for its own interest during the Steve Jobs era. In the past, Apple wanted to raise e-book prices in an attempt to compete with Amazon.
We can only wait and see if any federal action will happen to Apple or if Spotify retaliates.
