Apple might have tried to convince the record labels to kill their free-tier streaming deals with Spotify, but its revamped Beats Music could let listeners sign up without having to pay a dime.
Industry sources told Re/Code that Apple is currently negotiating with music labels to relaunch Beats Music as a free, unlimited streaming service for a short window immediately following its launch this summer. This trial period could be anywhere from one month to three months.
Apple is also considering other “freemium” alternatives to try to lure listeners away from Spotify, YouTube and other streaming competitors. Those options include having a select number of songs, mainly only the promotional singles, available for free listening. Another option is giving listeners free access to a new version of iTunes Radio where they can listen to different stations created by real DJs without having to pay for a subscription.
With Beats Music’s hyped relaunch in the very near future, Spotify is not taking it lying down. The streaming service is trying to sign up as many subscribers with a price-cutting promotion before Apple’s Goliath hits the App Store in the coming months. For the last few days, listeners have been able to get a three-month subscription to Spotify’s ad-free premium service for $1 a month. Usually, Spotify Premium costs $10 per month.
The story behind the story: Apple’s other tactics—trying to convince record labels to remove their music from Spotify’s free service—have led to a recent investigation by the Federal Trade Commission.
Behind the scenes, Spotify execs are also not very happy with Apple’s 30 percent App Store “tax” that’s tacked on to any in-app purchases, including if Spotify users upgrade to a premium subscription.
Additionally, Spotify is hoping to venture into streaming video as a way to generate more revenue. However when it comes to online video, Spotify will be faced with another juggernaut: Google’s YouTube.