FTC Also Investigating Apple's Upcoming Music Streaming Service

MacRumors · May 5, 2015

The Federal Trade Commission is investigating Apple's efforts to set up deals with record labels as it prepares to launch its new music streaming service, a rebranded version of Beats Music, according to Bloomberg. This would make the FTC the third government body to look into the new music service after the U. S. Department of Justice and European Commission.

The FTC's investigators, still in the early stages, of their inquiry, are asking whether Apple's efforts will change the way music labels work with other streaming services, for example curtailing ad-supported music and pushing more songs into paid tiers of service at higher rates, according to one of the people.

A couple days ago, a report emerged that Apple was utilizing its power within the music industry to push record labels to stop licensing freemium tiers offered by Spotify and other music services. The Cupertino company also reportedly offered to pay YouTube's licensing fee to Universal Music Group if the label stopped allowing its music on the website, which is a popular destination for music videos.

The FTC is speaking to multiple record labels about Apple's practices. However, music-industry executives told Bloomberg that Apple has made no such demands. Similarly, the Department of Justice is also interviewing high-ranking music executives about Apple's practices. The European Commission is doing the same, concerned that Apple will use its size to force record labels to stop supporting freemium music tiers.

Apple's Beats-based music streaming service will reportedly launch in June at WWDC, though the company is still finalizing several streaming deals. It will reportedly be deeply integrated into iTunes for Mac and the stock music app for iPhone, iPad and iPod touch while apps will also be available for Apple TV and Android, and Apple is aiming to offer exclusive content in the hopes of drawing people from other services. Last month, the company seeded iOS 8.4 beta to developers with a redesigned Music app featuring a new MiniPlayer, a redesigned look for "Now Playing", and more.

Article Link: FTC Also Investigating Apple's Upcoming Music Streaming Service

christarp · May 5, 2015

Good. Apple, I love you guys, but after hearing about the shady deals.. Yeah I can't support that.

farewelwilliams · May 5, 2015

christarp said:
Good. Apple, I love you guys, but after hearing about the shady deals.. Yeah I can't support that.

it's a rumor.

Che Castro · May 5, 2015

Apple should buy FTC

OH WAIT

69Mustang · May 5, 2015

MacRumors said:
The Cupertino company also reportedly offered to pay YouTube's licensing fee to Universal Music Group if the label stopped allowing its music on the website, which is a popular destination for music videos.

Wow. I'm hoping this is not true. If it is, that's pretty freakin' foul. Hopefully this is just rumor with no substantiation. That's some old school MS bs right there.

elmateo487 · May 5, 2015

MacRumors said:
[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]

The FTC's investigators, still in the early stages, of their inquiry, are asking whether Apple's efforts will change the way music labels work with other streaming services, for example curtailing ad-supported music and pushing more songs into paid tiers of service at higher rates, according to one of the people.

The only, thing I thought, of while reading, this, is that something, is seriously wrong, with these commas.

viachicago22 · May 5, 2015

69Mustang said:
Wow. I'm hoping this is not true. If it is, that's pretty freakin' foul. Hopefully this is just rumor with no substantiation. That's some old school MS bs right there.

Yes it's a rumor but it's got to have at the very least a portion of truth to it. And it's not far fetched. But apple should be careful not to get evil and greedy less they suffer the same fate as Rome, er I mean Microsoft.

hobo.hopkins · May 5, 2015

elmateo487 said:
The only, thing I thought, of while reading, this, is that something, is seriously wrong, with these commas.

Glad I'm not the only one! It's bad enough to understand a run-on sentence without the gratuitous commas.

Investigations are fine and probably good when Apple wields as much power as they do in the music industry. What will be important is how much of what we've heard (e.g. anti-competitive deals) turns out to be genuine.

christarp · May 5, 2015

farewelwilliams said:
it's a rumor.

And it's one that should be investigated.

AdonisSMU · May 5, 2015

hobo.hopkins said:
Glad I'm not the only one! It's bad enough to understand a run-on sentence without the gratuitous commas.

Investigations are fine and probably good when Apple wields as much power as they do in the music industry. What will be important is how much of what we've heard (e.g. anti-competitive deals) turns out to be genuine.

The artists are starving on services like spotify which can't even turn a profit despite having a ton of marketshare and mindshare. Did anyone read the article? The part where it said labels have denied any wrong doing on Apple's part. Apple wanted to not use ad supported services because well...the ads dont support even the likes of Spotify which has many more people streaming on it than on iTunes radio.

ebouwman · May 5, 2015

69Mustang said:
Wow. I'm hoping this is not true. If it is, that's pretty freakin' foul. Hopefully this is just rumor with no substantiation. That's some old school MS bs right there.

It IS pretty foul, I agree.

Seriously disappointed with apple on this one. I don't really care for ****** practices like that. Taking content away from YouTube and other services will just mean a rise in pirating, not a rise in revenue for some ****** beats music service.

na1577 · May 5, 2015

Apple's rumored tactics sound a lot like the iBooks case—of which they were found guilty. Did they not learn their lesson?

The Barron · May 5, 2015

Big Whup

christarp said:
And it's one that should be investigated.

When all the dust settles, Apple will, as usual, prevail. Their legal department is deep, to say the least.

69Mustang · May 5, 2015

AdonisSMU said:
The artists are starving on services like spotify which can't even turn a profit despite having a ton of marketshare and mindshare. Did anyone read the article? The part where it said labels have denied any wrong doing on Apple's part. Apple wanted to not use ad supported services because well...the ads dont support even the likes of Spotify which has many more people streaming on it than on iTunes radio.

Yes, we all read the article. What else did you expect the labels to say? Same thing the book publishers said... until they didn't. Apple not wanting to use ad supported music is one thing, but trying to undermine other companies is something else altogether.

Nothing has been proven so it's all just speculation right now. I'll reserve judgement until I know more.

BruiserBear · May 5, 2015

christarp said:
And it's one that should be investigated.

Investigated, sure. But you said you can't support that, without even knowing what that is.

christarp · May 5, 2015

BruiserBear said:
Investigated, sure. But you said you can't support that, without even knowing what that is.

I can't support the shady deals they may or may not be doing. My support or lack of support is not effected by if they're conducting said deals or not.

hobo.hopkins · May 5, 2015

AdonisSMU said:
The artists are starving on services like spotify which can't even turn a profit despite having a ton of marketshare and mindshare. Did anyone read the article? The part where it said labels have denied any wrong doing on Apple's part. Apple wanted to not use ad supported services because well...the ads dont support even the likes of Spotify which has many more people streaming on it than on iTunes radio.

I did read the article. Your comment isn't really even relevant to my point; I'll repeat it: investigations are fine and probably good when Apple wields as much power as they do in the music industry.

Investigations are just that: investigations. They aren't damning. Surely you aren't suggesting that the government should simply accept what some music-industry executives told Bloomberg without doing their own review?

You're speculating as to what Apple wants to do or not do. We'll see when they announce their offerings and we'll likewise see after the FTC and DoJ have completed their investigations.

smorrissey · May 5, 2015

Bad Apple

ThisIsNotMe · May 5, 2015

How is that FTC investigation into Google/Yelp+MapQuest going?

Oh wait, thats right, the benefit of your chairman being a White House advisor and spending in the top of lobbying spending.

J.gerbes · May 5, 2015

Why can't Apple just be clean in their practices

MyopicPaideia · May 5, 2015

When you are as big as Apple, every move you make is going to be scrutinised. I'll pass judgement when the findings are published, and/or the music service actually launches/is allowed to launch.

jpn · May 5, 2015

there is so much about this story that tells us we need to wait (probably for months) before we can finally hear enough info (including from apple's perspective) in order for anybody to make a judgement.

the actions outlined in the rumor/article of course sound to be "predatory" (from a legal standpoint). but the nature of this leak's background is likely to have come from elements that support apple's competitors and not apple.

its of course very complicated and has parallels to iBooks.

in iBooks, Jobs was sure that the model in use by book publishers and amazon resulted in a fragmented industry that was not in the end good for the health of book publishing, and therefore in the end, also not good for consumers. i agree with that strategy (raising book prices to consumers) to elevate the book publishing industry as a whole. but in fact it is an illegal strategy in the way that apple went about it. the result is known: amazon won, the industry is hopelessly weak, there are less and less incentives to publish or take risk on marginal authors. and, the epub formats continue to not have real compatibility.
consumers have not benefitted from the US government enforced watchdog settlement.

so now this time with streaming: apple is again saying that for itself, and in general, the industry and concept itself to survive, that a monthly fee of USD 8 (or whatever it is) is not enough. and therefore apple would like to charge its customers USD 10 (for example).
this really makes me recall Jobs famous quote on camera to the question "why will publishers go with apple when it effectively raises prices to the customer" when he simply answered: "they just will" (or something very similar).

so now apple is trying the same approach with music streaming.

i happen to agree again with apple: with more and more adjustments to streaming flexibility, the streaming+++ model will be able to successfully break the "i want to own my music" mentality the more and more flexible the plans become and the more and more easier it becomes to play your music on any device you own at any time on demand.

i agree with apple that this kind of service is worth a premium. in the end, a slightly higher per month fee is acceptable if it has more added flexibility and usefulness to the consumer.

the question is: when apple is meeting with and negotiating with the music companies, in what way are they attempting to merely state their negotiating position and strategy, versus, trying to use their position within the music community (vis a vis iTunes store and download platform) to coerce music companies into buying into their vision.

this is where Mr. Eddie Cue again and again never fails to disappoint. He has not been successful for apple in any media related strategy during the past 5 years.

iTunes radio is a joke and limited. apple TV is a joke and limited. streaming has taken too long to get into action.

as a Beats-centric strategy evolves (as it is rumored), will the price that apple paid for it have been able to help apple evolve its music strategy into a long term viable new platform.

with Eddie in charge, I doubt it.

MyopicPaideia · May 5, 2015

AdonisSMU said:
The artists are starving on services like spotify which can't even turn a profit despite having a ton of marketshare and mindshare. Did anyone read the article? The part where it said labels have denied any wrong doing on Apple's part. Apple wanted to not use ad supported services because well...the ads dont support even the likes of Spotify which has many more people streaming on it than on iTunes radio.

To be fair, it isn't the artists and labels that are suffering due to the business model, it is the service providers themselves that are suffering. Spotify is the one not turning a profit, NOT the artists and labels, they are turning a healthy profit. The likes of Spotify are doing whatever they can to gain that mind and market share, and are willing to lose money to do so...for the time being.

Believe you me, mark this as a matter of fact.

The free ad-based streaming services will be going away in the next few years anyway, as soon as Spotify and other service providers have the user base hooked, and as soon as there is a critical mass in the proportion if paying customers as opposed to ad based users.

Let's not misunderstand the situation here.

peachpup · May 5, 2015

christarp said:
I can't support the shady deals they may or may not be doing. My support or lack of support is not effected by if they're conducting said deals or not.

How can you not support something that might not be taking place? Interesting ... lol

Kabeyun · May 5, 2015

J.gerbes said:
Why can't Apple just be clean in their practices

Why can't people realize that the report of an investigation is different from a completed investigation that found wrongdoing?

We have a whole lot of people around here who seem to be both quicker and smarter than the FTC. Please share with us your information.

And by the way, the last rumor here (à la Home Depot) turned out to be the opposite of true. Take a breath, lads.

FTC Also Investigating Apple's Upcoming Music Streaming Service

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