Apple is urging record labels to end free tier contracts with Spotify to put a dent in the streaming competition, according to a report published by The Verge. The alleged strategy comes ahead of Apple’s plans to unveil a new streaming service rumored to debut at the World Wide Developers Conference next month.
Eliminating Spotify’s free option would wipe out more than half the company’s customers. Out of 60 million Spotify listeners, only 15 million are paid subscribers. The plot would place Apple at an advantage in accessing the more than 50 million Spotify customers that would be left hanging.
Apple allegedly is using relationships with labels to get the deal in motion. A source indicated that the company also offered to pay Universal Music Group for YouTube’s licensing fees, if the label stopped allowing its music on the video streaming site. “All the way up to Tim Cook, these guys are cutthroat,” a source was quoted as saying. The Federal Trade Commission and the Department of Justice are said to be looking into the report.
It is unclear if Apple’s new streaming service will be included with, or independent from, the Beats Music relaunch. Apple was expected to launch the revamped service in March, and then June, but hasn’t secured all of the licensing deals needed, Billboard reports. “If any company can pull it off, they can," a source told Billboard, adding that "labels are more likely to play ball with them" given Apple's history of revenue return.
A second source, however, said that Beats Music won’t make a June premiere because, “The deals aren’t done.”
(Photos from left: Apple, Spotify)