Apple Backs Down on $7.99 Price Point for New Music Service After Meeting Resistance From Record Labels

[MacRumors]

Amid all of the excitement over the 12-inch MacBook and new pricing details on the Apple Watch, Billboard has shared some new information on Apple's rumored music service.

Initial rumors suggested Apple was hoping to undercut competing services like Spotify on price, offering its upcoming music service for $7.99, but according to Billboard, music labels are said to be highly resistant to pricing under the industry standard of $9.99.

Due to labels' insistence on the $9.99 price point, Apple is said to have backed down from its aggressive $7.99 pricing goal, suggesting the service may cost subscribers $9.99 per month instead of $7.99 per month.

Negotiations 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.

Apple may not be able to offer a lower price point than competing services, but industry insiders that spoke to Billboard have suggested that Apple is talking to artists and labels about exclusives for key releases that will help it stand out from the competition.

Limited details are available on Apple's new subscription music service, but it's said to be a complete rebranding of the company's existing Beats Music service. It is rumored to be directly integrated into iTunes and it will be platform agnostic -- available on iOS and on Android, through a dedicated Android app Apple is building.

Recent rumors have suggested that Apple will launch its revamped streaming music service in June, during the company's annual Worldwide Developers Conference.

Article Link: Apple Backs Down on $7.99 Price Point for New Music Service After Meeting Resistance From Record Labels

 

[aaronvan]

Buggy-whip makers, dirigible manufacturers, record labels...

 

[0000757]

I'll probably on Spotify forever anyways, at least, until I have to stop paying the Student Price of 4.99 (or whatever it is)

 

[winston1236]

I'll probably on Spotify forever anyways, at least, until I have to stop paying the Student Price of 4.99 (or whatever it is)

Likewise, too bad the 7.99 price is the only reason I would consider switching.

 

[0098386]

I'm at the skatepark and feel like celebrating with my entourage with hip-hop.

...with my entourage...​

 

[normang]

Since when is 9.99 pricing make for an industry standard and why doesn't Apple tell them to go pound sand.

 

[sniffies]

A holes

 

[Peace]

Since when is 9.99 pricing make for an industry standard and why doesn't Apple tell them to go pound sand.

The industry calls it a standard because all the other streaming services are charging $9.99 and that industry has users by the gonads.

 

[bushido]

this whole exclusive to service xy BS is so stupid. no ones gonna pay for different services that do the same thing. itll just turn poeple to pirating once again. those labels never learn i swear

 

[DakotaGuy]

I suppose Apple feels like giving their customers a good value on a music service after they screwed them over on a watch.

 

[nuckinfutz]

Since when is 9.99 pricing make for an industry standard and why doesn't Apple tell them to go pound sand.

$.99 a track was iTunes standard until they complained so evidently they don't like standards unless it's in their favor.

 

[teme]

If Apple goes to the 'exclusives for key releases' style, it will hurt all the streaming music services, including Apple themselves. Spotify is forced to follow that same route and a little bit later the selection in music subscription services is too fragmented and has lost its major selling point.

 

[emvath]

9.99 would be my limit but it is going to need a "killer feature" in order to get me to switch.

 

[gsmornot]

So, if the price goes back to $9.99 to meet the standard can we expect to see a free ad based version or is that still off the table?

I thought the idea was to make the service cheaper to get people in the door then close the option for free so that everyone paid something for the music.

 

[CJM]

Just the other day on the radio I heard some indie artist saying she wasn't going to make her latest album available on Spotify because she wanted people to buy the CD.

Well my dear, you've officially decided you don't want people to listen to your music, it seems.

I realise artists get paid very little per play (I wonder how much labels get of that $9.99 price) but having your music out there means more fans, more merch sold and more people at gigs.

Sorry about that tangent, but I really wonder where people get their ideas sometimes.

 

[fel10]

Sticking with Spotify

 

[TsMkLg068426]

I Don't understand Tim Cook why does he just dump Beats and turn ITunes into streaming service the way it should have been. Seriously I miss Steve Jobs so much this crap would have never when he was around.

 

[JosephAW]

Apple needs to subsidize the $2 price difference and when the others services are out of business then the labels will submit to the new $7.99 subscription pricing.

 

[TsMkLg068426]

Just the other day on the radio I heard some indie artist saying she wasn't going to make her latest album available on Spotify because she wanted people to buy the CD.

Well my dear, you've officially decided you don't want people to listen to your music, it seems.

I realise artists get paid very little per play (I wonder how much labels get of that $9.99 price) but having your music out there means more fans, more merch sold and more people at gigs.

Sorry about that tangent, but I really wonder where people get their ideas sometimes.

I believe the artist you are talking about is Bjork.

 

[_Refurbished_]

I used Spotify for a while, but couldn't get over the sound quality of their library (yes I used the Extreme setting). The mid-range noticeably lacked clarity compared to my high quality iTunes tracks. If Apple can match their own quality w/ a subscription based model, I'm sold. Otherwise, I'm sticking to my high quality mp4 files.

 

[boodle]

For me, $9.99 seems too high for most current streaming services.
$7.99, however, would break the magical price barrier in my mind.

 

[blackcrayon]

Apple needs to subsidize the $2 price difference and when the others services are out of business then the labels will submit to the new $7.99 subscription pricing.

Yeah I don't understand this, when Apple could just pay the difference and barely feel it.

 

[Kalecki]

Wow, I can't believe Apple could not convince the music industry that it makes much more sense for them to agree to the 7.99 price point. I have read that Beats would not offer a free ad supported version like Spotify. So basically the music industry is shooting its own foot. I would have switched to Beats from Spotify for the price point of 7.99, now I do not see the point in switching. Because in the long run they would make more money if everyone paid 7.99 and they got a piece of that.

 

[H3boy]

Sounds an awful lot like price fixing by the record labels.

 

[_Refurbished_]

For me, $9.99 seems too high for most current streaming services. $7.99, somehow, would break the magical price barrier in my mind.

I agree $7.99 is much better, due to the association with Netflix's pricing. Once I joined Spotify, however, I didn't feel like I was being ripped off. For the amount of content they provide, $9.99 seems in line with what I'm getting. Remember, $9.99 gets you "almost" anything you can think of (including new releases), whereas $7.99 on Netflix gets you last year's ticket.