Apple is doing what it can to end freemium music services, opening up a bigger piece of the pie for it to step in with its incoming Beats music service. Meanwhile, Spotify is currently the king of the music streaming industry, with 60 million listeners. From that number, only one-fourth are paid subscribers. YouTube also a threat to Apple, as the video service provides viewers with free access to music and music videos that Apple would love to charge users to see.
Apple’s new business propositions have not gone unnoticed by the U.S. Department of Justice; officials have reportedly been interviewing music industry executives, trying to see if Apple is engaging in any unscrupulous business tactics.
Apple is rumored to be engaging in back room deals with record label executives, attempting to kill existing licensing agreements between labels and free services. Reportedly, Apple proffered a deal with Universal Music Group (UMG), offering to pay UMG whatever YouTube was paying in licensing fees, if UMG would kill its YouTube licensing deals. That would mean YouTube wouldn’t be able to host any UMG artist content, and Apple’s incoming paid service would be the only place to listen in, legally.
The DoJ is especially keen on Apple’s business practices due to its spotty track record cooperating with others. Apple is under the microscope due to a previous antitrust lawsuit over price-fixing its e-books. Apple settled a related class-action suit for $450 million USD, and is still trying to win an appeal in federal court.
Apple is expected to announce its new Beats music service at the WWCC 2015 next month. Ironically, newcomer, Tidal, has escaped Apple’s attention as it narrows its focus competitors, Spotify and Youtube.
Source: The Verge