Apple is in talks with record labels to lower the cost of music streaming, according to Recode’s Peter Kafka.
Apple is reportedly looking to market a streaming service — likely an overhauled version of Beats Music — for less than $US10 a month.
Kafka’s report said the Apple talks, led by SVP Eddy Cue, are in the early stages. But history suggests there’s reason to believe Apple will be successful in these negotiations.
Steve Jobs had similar discussions with the record companies before iTunes debuted and popularised the a la carte version of music buying we’ve become accustomed to.
Jobs faced resistance from record labels, but they eventually relented. The same may happen in this instance.
Apple also recently had success in negotiating partnerships with credit card issuers for its payment platform, Apple Pay.
Cue’s discussions with the record labels may use a similar framework. Partnering with Apple would allow those labels to develop a new revenue source as CD sales plummet.
Even the model popularised by iTunes is widely acknowledged to be outdated.
The popular streaming music services like Spotify, Rdio, and Rhapsody all charge $US10 per month for unlimited music streaming. Beats Music charges the same, but has far fewer subscribers since it only launched this year. Cutting the price could be Apple’s way of getting people to switch over from a competing service.