Apple is in dispute with major record labels again, this time over the pricing of its yet-to-be-announced music streaming service.
The company is said to be preparing a relaunch of iTunes that incorporates and rebrands the Beats Music subscription service.
However, according to a new Billboard report, Apple is running into opposition with regard to the pricing of this new streaming component.
The report claims that “labels are standing firm on pricing,” and are unwilling to stoop to the $7.99 fixed monthly charge that Apple wants to make.
The music industry’s firm stance has apparently led Apple to back down over these plans, and reinstate a standard $9.99 charge. That’s the same monthly fee as services such as Spotify charge for unlimited music access, robbing Apple of a vital differentiating factor.
Of course, Apple could always set a lower price anyway and absorb the loss in a bid to get an advantage, but that’s not generally how the cash-rich company operates.
Of course, one other area that Apple could look to for differentiation is exclusive content, but again, industry sources claim that this will cost the company considerably.
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Apple’s biggest bargaining chip here could be the sheer volume of paying customers it should be able to attract. For all Spotify’s strengths, its 15 million subscribers figure is seen as a fairly low number, with far more people opting to use its limited free service.
One thing Apple can do better than any other company is to convince its customers to splash additional cash. Apple might be struggling to get its music subscription service off the ground, but Spotify’s position at the head of this fledgling market is far from unassailable.