Apple pushing music labels to kill free Spotify streaming ahead of ‘iTunes Music’ launch

“Apple has been using its considerable power in the music industry to stop the music labels from renewing Spotify’s license to stream music through its free tier,” Micah Singleton reports for The Verge.

“Spotify currently has 60 million listeners, but only 15 million of them are paid users. Getting the music labels to kill the freemium tiers from Spotify and others could put Apple in prime position to grab a large swath of new users when it launches its own streaming service, which is widely expected to feature a considerable amount of exclusive content,” Singleton reports. “‘All the way up to Tim Cook, these guys are cutthroat,’ one music industry source said.”

“Sources also indicated that Apple offered to pay YouTube’s music licensing fee to Universal Music Group if the label stopped allowing its songs on YouTube,” Singleton reports. “Apple is seemingly trying to clear a path before its streaming service launches, which is expected to debut at WWDC in June.”

Read more in the full article here.

MacDailyNews Take: Why would the music industry, if they think music has value, let it stream for free in exchange for a few advertising pennies from music streaming companies? Why shortchange themselves? Freemium music only devalues music. It’s the opposite of what an intelligent music industry should want.

Related articles:
U.S. feds weigh investigation of Apple’s forthcoming ‘iTunes Music’ streaming service – April 7, 2015
EU regulators already probing Apple’s music streaming plans in Europe – April 2, 2015
Apple’s ‘iTunes Music’ streaming service to cost $9.99/month, no free tier; iTunes Radio to get makeover – March 26, 2015
With iTunes Music, Apple wants to help music labels roll back the tide of free digital music – March 6, 2015

16 Comments

  1. A) this article is BS – pure hearsay.
    B) f*&$% Spotify – try spending $50k to record an album and see how much you like giving away songs for free or for .0001 cents on Spotify. It is depressing and it is not sustainable. Artists cannot eat when spotify gives away their work for free.

    1. Hmm, you shouldn’t blame Spotify.
      1. The artists give away their souls when they sign with a label.
      2. The labels give away their souls, seeking the mega/mondo/gargantuan hit machines instead of gradually developing a WIDE variety of talents and styles.
      3. Then Spotify, Amazon, Pandora come along and give away their souls trying to implement the classic business plan of “whatever we give away with profits, we’ll make up on volume–eventually.”

      Spotify can only sell what the stone-age-thinking record execs allow them to sell. Why they bought into these streaming deals is beyond me but why ANYONE thinks consumers will buy into these music subscription services is even more beyond me.

      1. You’re generalizing, and all this “record labels & record label execs are evil” thinking has been used a billion times to justify theft and the destruction of the music industry. Fact is, artists aren’t all unwitting saps who sign their souls to soul-sucking evil record labels. You may disagree with how some labels go about their business and develop artists, but that doesn’t justify painting the entire industry with a broad brush. So sick of this line of thinking.

    1. my thought exactly.

      even as an apple stock owner, who appreciates the dividends and growth in stock value, this just seems too much like something microsoft would do.

      capitalism works best when there is competition, not when a behemoth overpowers other competitors. we have seen way too many episodes of consolidation and strong-arming the competition in many other fields and industries, and by and large it has not worked out to the benefit of the consuming public, which despite the fact that i am an apple shareholder, i still view my role as a consumer as much more important.

    2. I think that if any of this rumor is true, the music industry probably didn’t need much convincing to drop these services. Ad revenue from free music is probably tiny compared to what the music industry would like it to be. Apple likely just handed the music execs the viable alternative and business strategy they needed to replace their lowest revenue streams.

    3. I hope this isn’t true, because it sounds like it’s asking for a lawsuit. Not even saying Apple would be in the wrong, but they last thing they need is another Denise Cote climbing up their butt.

      ——RM

  2. Why would they let it stream for free and get the royalties when it’s played? I don’t know… why do they do it for radio? It’s the same concept. I pay for Spotify, but even if I didn’t, if I stream songs I already own (which I’ve done) they’re getting money they wouldn’t have gotten otherwise. I think your take is silly.

  3. The big difference from SPOTIFY and services like RIDO, PANDORA or even traditional radio is designed so that it is RANDOM PLAY. You don’t decide what song to play and you certainly don’t get to play it over and over and over again. SPOTIFY and YOUTUBE doesn’t put those safeguards in place. In fact I pleaded that both SPOTIFY and YouTube stop the stream if you play the song 3 times for free and redirect you to buy it. Why milk it to nothing? If listen to it often, than buy it.

  4. Telling someone how to run their business, isn’t specifically wrong, if it’s a matter of advice.

    Convincing them, likewise is not wrong.

    Compelling them, with goodies, or in a power play, is immoral. Both Intel and Microsoft got into trouble, for that.

    I am going to take the stance that the author is wrong, a little bit. Apple may have offered some advice or stated they will not adopt a certain business model, as long as others offer a similar service for free.

    But until otherwise proven, I am going to consider, strong arm tactics are not in play. However if Apple does not enter the arena, they will loose the fight one way or another. I am willing to pay for services, in spite of Spotify’s freemium solution, but Apple has to come up with a subscription model that makes sense for me. They certainly won’t get paid subs higher than 10%, as long as the likes of Spotify’s free service exists.

    iTunes radio, free, makes sense, as it’s a form of advertisement. They have to offer the tracks for sale, then the playback is tax deductible.

    If you can add the tracks to your own library, then it’s a subscription service, without incentive to buy the tracks. In this model, they loose their deduction.

    I think, Spotify is unsustainable, and artists are pissed… Apple can’t or doesn’t want that.

  5. The largest Company by market cap with loads of cash in reserve and huge turnover quarter after quarter surely would not resort to screwing customers now will they. If this is true, Apple is not only killing competition but killing the music industry. The revenue will not change as only a few percentage of the free users will ever switch to the paid model. Its a stupid move all the way from the moment they decided to put up $3 billion dollars for a stupid head phone company.

  6. If the state of the current iTunes Radio with iTunes Match is any indication of how their streaming service is going to be, I rather give my money to spotify or pandora. It will take years for Apple to catch up to the quality of streams their competition had and I rather wait.

Leave a Reply to gcaptain5 Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.