On Monday, Apple announced their new streaming music service, Apple Music. Now it appears, at least according to The Wall Street Journal, that Attorney Generals for New York and Connecticut will be looking into the deals that Apple had to make with record labels for Apple Music. The issue here is how Apple got labels like Universal, Sony and Warner to sign off on their new streaming service. This investigation by the Attorney General will examine if Apple applied pressure to the record labels to stop supporting free ad-supported platforms, like those of Spotify, Pandora and others.
Right now, Spotify has over 60 million users, and 45 million of those use their free, ad-supported tier. The remaining 15 million pay $9.99 per month to listen to as much music as they want, without having to listen to ads. There are also some other features included for the premium price, like offline listening.
In May there were reports that the Department of Justice was investigating the Cupertino company for asking record labels to speak with Spotify about ending their free level of service. Reports also mentioned that Apple had promised to reimburse Universal for royalties they would lose by no longer providing their music on YouTube. Obviously, asking labels to stop supporting a competitor throws up major flags for antitrust investigations. But then again, does Apple really care? I mean they are sitting on a huge pile of cash, with nothing to do with it.
Apple’s Music service does have a free tier. Although the features are very limited. You get to listen to Beats 1 station as well as a couple of others. Additionally, you can skip only a handful of times. But if you want the full Apple Music experience, you’ll have to fork out the full $9.99 per month, or if you want a family subscription for up to 6 devices, that’ll be $14.99 per month. Which is about the same pricing as what Beats Music was when it launched.
Apple, as well as these music labels could have a serious antitrust lawsuit on their hands. It’ll be interesting to see what New York and Connecticut’s Attorney Generals find in this investigation.