Apple Allegedly Pushing Music Labels to Stop Free Music Streaming Tiers
Apple’s business habits are being followed closely by the US Department of Justice: Ahead of the relaunch of its music streaming service (presumably in June), the DOJ has interviewed high-profile industry executives, following whispers of Apple using its power to stop the free tier of music streaming services, The Verge has learned.
While the sources mention Spotify specifically, claiming that Apple has been pushing music labels to force-end Spotify’s free tier of music services, they also mention that Apple has been willing to pay YouTube’s music licensing fee to Universal Music Group if the music label avoids publishing on the popular platform.
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. 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. “All the way up to Tim Cook, these guys are cutthroat,” one music industry source said.
It’s an open secret that Apple is preparing to relaunch its own music streaming service. iTunes Radio can be considered as a trial run, as Apple made a significant investment of $3 billion last year when it acquired Beats. Since then, multiple rumours have surfaced, all of which confirm that Apple is busy preparing the relaunch of a revamped music streaming service as demand moves from music downloads to music streaming.
It is worth noting that the US DOJ are not the only ones watching Apple’ s business practices closely: The European Commission’s Competition Commission launched a similar probe in April.