Apple may undercut prices for music streaming subscriptions

Users may soon be streaming their favorite songs for less than $10 a month, if Apple has its way.

Technology news site Re/code reported yesterday that Apple is negotiating with music labels to sell streaming subscriptions for less than the $10 monthly rate that has been the norm. The price structure is being discussed at the deal table along with a host of rights and features that Apple would like to secure for when it revamps Beats, according to Re/code. The Beats makeover is targeted for early next year, Re/code added.

Just what Apple plans to do with Beats – the hip music company best known for its oversize headphones – has been the source of much speculation in the Valley since the $3 billion deal closed earlier this year. Apple shot down a TechCrunch report that the Beats Music streaming service would be shuttered, but other sources tell Re/Code that the company may tinker with the brand.

A lower price may help Apple gain traction as a late entrant to the music streaming field, where companies like Spotify and Rhapsody already have a strong footing. Although music labels may be reluctant to erode their price points, analyst Mike McGuire of Gartner told SiliconBeat that iTunes will give Apple leverage in negotiations. The company already has hundreds of millions of credit cards on file through the service.

“That’s the tradeoff Apple is asking labels to make,” McGuire said. “There’s the potential of tapping into this huge base of users.”

While companies like Spotify and Rhapsody have captured early adopters, the convenience of iTunes could pave the way for a streaming subscription that appeals to the masses, McGuire said.

“It’s not about trying to steal from Spotify but enlarging the market,” he said.

Apple is reportedly looking to revamp the music streaming service it bought when it acquired Beats (AP). 

 

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