Report: Apple Sides With Music Labels, Thinks Free Streaming Service Tiers Are Bad

Last year, Apple acquired Beats, a company that makes two things that go nicely with media players and smartphones: high-end headphones and a subscription-based music streaming service. While they’re happy to offer a free trial and will be reportedly be pushing the Beats Music app to iDevice users in the future, Apple will not follow competitor Spotify’s lead in offering a free, ad-supported tier.

This report comes from technology site Re/Code, and makes sense. Beats currently doesn’t offer a free version of its subscription, except for a two-week free trial for new users. That won’t change when Apple pushes the Beats app to users’ devices like so many U2 albums.

While people seem to enjoy streaming music for free on services like Spotify or by watching music videos on YouTube, two groups of stakeholders don’t care for this business model very much: musicians and record label executives. We probably could have expected that. Taylor Swift notably pulled all of her music from Spotify after releasing her latest album, and Re/Code quotes industry executives who are against the idea of free streaming. Lucian Grainge of Universal Music Group apparently believes that Spotify is the reason why users aren’t paying for as many downloads as they used to, yet the amount that labels get paid from streaming services hasn’t caught up to make the difference. About 12% of people who used to buy and listen to music through iTunes now stream through Spotify, and less than half of them have paid subscriptions.

Apple media leaders apparently agree, and have been making this argument around the industry.

Big Music Labels Want to Make Free Music Hard to Get, and Apple Says They’re Right [Re/Code]

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