As streaming music becomes even more mainstream, providers in a crowded market are looking for new ways to lure paying customers. We’re at a point now where all of the major players have deals with all of the major record labels and features like playlists, recommendations and offline listening are common.
Aside from offering high-quality lossless streaming (something that’s still a niche market), the one area left for major players to compete with each other on is pricing.
According to a report from Re/code, Apple has been pushing music labels to offer price cuts which would then be passed along to the consumer. The Cupertino-based company reportedly wants to relaunch the subscription service sometime next year at price point of just $5 per month – half of what it costs today.
People familiar with Apple’s pitch to record labels tell it like this: the top iTunes buyers spend roughly $60 a year on downloaded music, which comes out to $5 each month. If subscription services were able to match that price, downloaders would be tempted to switch to a streaming model that would generate the same amount of money for music labels.
Whether or not Apple will be able to talk industry executives down that much remains to be seen. Perhaps somewhere in the middle might be a more realistic goal.