Two pricing details from Apple and Beats Developing Streaming Music Service to Rival Spotify by Brian X. Chen for The New York Times:
“Perhaps most telling for Apple is what its new streaming service will not have: a lower price than rival services.
According to several music executives, who spoke on the condition of anonymity because the talks are private, Apple recently tried but failed to persuade record labels to agree to lower licensing costs that would have let Apple sell subscriptions to its streaming service for $8 a month — a discount from the $10 that has become standard for services like Spotify, Rhapsody and Rdio.”
“A crucial difference for Apple’s streaming service is that unlike Spotify, it will have no free tier. That has greatly pleased top executives at major music labels, who have begun to complain openly that so much free music has given consumers too little reason to pay for it.”
Apple has the largest collection of users to bring to the negotiating table, and they appear to be both meeting the music industry’s price and helping them redefine music as a non-free experience. With the launch of Tidal yesterday, Apple’s decision to not offer something for nothing while simultaneously coming in well under Tidal’s $20 monthly fee may prove to be very smart.
And while Tidal got a number of high-profile artists to stand (quite literally) in solidarity, the long tail of professional musicians are unlikely to all align under a single banner. Listeners will vote with their attention and their money for how they desire to experience music, and the artists will seek to meet the interests of their audience.
Lastly, putting Trent Reznor at the head of Apple’s engineering of the project is likely to yield a superior user experience to the competition.