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The big labels won’t let Apple make a cheaper music streaming service

How does a music streaming service distinguish itself from the multitude of similar services out there? All of the other service have roughly the same catalog of songs and roughly the same features all at the industry standard price of $9.99/month. Apple’s plan was to make its own music streaming service fat cheaper than the rest, with the initial goal being $4.99/month before pressure from the record industry brought that number up to $7.99/month. Now it looks like even that is too low for the record industry and Apple’s service will stick with the standard $9.99/month. 

A renewed focus on the value of music comes as a transition point for the record business. Rob Wells, Universal Music Group’s president of digital who brokered deals with “freemium” services like Spotify, left the company in late February. Now the company is rethinking the value of unlimited free streaming, according to a label source. At the same time, Apple’s upcoming subscription service, slated for a June launch according to an industry source and media reports, will forego the freemium model for a paid-only approach. It’s an approach Beats Music co-founder Jimmy Iovine, an executive at Apple since the acquisition of Beats Electronics, has consistently favored. Negotiatons for Apple’s upcoming subscription service are evidence labels are standing firm on pricing. Industry sources say Apple has backed down from its effort to lower monthly pricing for its subscription service to $7.99 from $9.99. Apple would have to absorb the loss if it sets a price lower than the standard $9.99.

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