Labels say 'no' to Apple on cheap streaming music, consider capping Spotify
Record labels are reportedly standing firm against Apple's plan for an $8 per month streaming music service, and may even consider new listening caps for Spotify.
Citing unnamed insiders, Billboard reports that labels are rethinking the value of streaming music now that services like Spotify have taken hold. While labels had been eager to establish new revenue sources after the decline of the CD business, some are now worried that these services still aren't bringing in enough money. It's a sentiment echoed by artists such as Radiohead, Bjork, and Taylor Swift, who have withheld some or all of their songs from Spotify.
The labels don't seem to have a problem with $10 per month streaming services such as Spotify Premium, Deezer, and Rhapsody. But they're wondering whether they should enforce listening caps for the free version of Spotify as way to sell Premium subscriptions. Spotify originally had listening caps in Europe, and had planned to limit usage for U.S. users after the first six months, but it never enforced those limits in the United States, and abolished them worldwide last year.
The labels are also standing firm against Apple's plans for an $8 per month iTunes service based on Beats Music, which Apple acquired last May. If Apple wants to offers its service for less than $10 per month, it'll have to eat the costs, Billboard reports. Earlier reports claimed that the new service is on track for a June launch.
The story behind the story: The music industry has to walk a fine line here. Tighter listening limits on Spotify would inevitably encourage more piracy, but everyone loses if popular artists lead a revolt against free streaming. As for cheaper subscriptions, it's in the labels' interests not to let Apple undercut Spotify, which provides vital competition to iTunes but is still not profitable. With all this in mind, it seems unlikely that much will change in the near future despite all the insider grumbling.