“Apple has opened exploratory talks with senior label executives about the possibility of launching an on-demand streaming service that would rival Spotify and Beats Music, according to three people familiar with the talks,” Ed Christman reports for Billboard. “Apple is also thinking about adding an iTunes App for Android phones.”
“The surprising discussions are part of a multi-pronged strategy to deal with the double-digit decline in U.S. download sales at Apple’s iTunes Music Store, the largest music retailer,” Christman reports. “Apple is considering a range of efforts to support the iTunes Store… But it’s the talks around on-demand subscription and the iTunes App for Android that will most intrigue label heads and the wider market. Apple founder Steve Jobs was widely known to have argued that fans would never subscribe for music. Moreover, up until now, iTunes has been committed to keeping the iTunes ecosystem closed off.”
“But now, nearly three years after Job’s death, iTunes has to consider the option because so far this year, U.S. digital album sales are down 13 percent for the week ended March 9, and digital track sales are down 11 percent from last year, according to Nielsen SoundScan,” Christman reports. “With iTunes accounting for more than 40% of U.S. recorded music revenue any decision it makes about its business model will have a significant impact on the labels’ business models. ‘They are feeling out some people at labels on thoughts about transitioning its customers from iTunes proper to a streaming service,’ says one major label source. ‘So when you buy a song for $1.29, and you put it in your library, iTunes might send an e-mail pointing out that for a total of, say, $8 a month you can access that song plus all the music in the iTunes store. It’s all in the ‘what if’ stage.'”
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