Apple is planning to lower the price of Apple Music, a source has reportedly told Digital Music News. The story doesn’t add up, given what is known about Apple’s deals with rightsholders. But the tech media has picked up the piece, ignoring or downplaying DMN’s history of “scoops” that turn out not to be true.
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Apple is planning to lower prices for Apple Music before the end of the year, a single source from outside the company has told Digital Music News. The new Apple Music prices will reportedly see the monthly fee drop from $9.99 to $7.99 for single users sand from $14.99 to $12.99 for family plans. This is not just a Christmas promotion, though it will launch prior to the holiday and could include a deeper “holiday promotional discount,” according to DMN.
This spring DMN also reported that Apple would stop selling iTunes downloads “within two years,” then in “the next 3-4” years. Both timelines and the story were later proven false.
This new Apple Music pricing story doesn’t add up either.
While we know from pre-launch negotiations that Apple would love to offer lower pricing, the labels have said no. And given that current label negotiations with Spotify and others center on extracting more revenue – not less – from music streaming, the labels have no incentive to cut prices now.
Of course, Apple could do lower prices unilaterally and can afford to absorb a loss on each subscription. It even sounds plausible that Apple might want to undermine Spotify prior to its IPO. But Apple has a much bigger business to run and angering label partners would serve little purpose.
Apple also lacks Amazon’s incentive to lose money on services while making it back on device sales like its Echo connected speaker. iPhone’s are bought as communication devices, with music only a secondary or tertiary consideration.
No, expect any lower prices for Apple Music to be temporary – an incentive to new users rather than a firebomb at a business model that’s already barely working.