As the debut of Apple’s streaming music service quickly approaches, sources close to The Verge say the company’s aggressive pursuit of content exclusivity has attracted scrutiny from regulators in the Justice Department. According to the report, Apple’s been privately pushing record labels to abandon ad-supported, free listening platforms like YouTube and Spotify that might otherwise compete with its own subscription-only service.
Apple reportedly offered to pay YouTube’s music licensing fee to Universal Music Group if the label agreed to disallow its songs on the video sharing website, and has also been actively discouraging music labels from renewing licenses for Spotify’s free tier. “All the way to Tim Cook, these guys are cutthroat,” one music industry source told The Verge.
Apple’s motivation is clear: The company’s new service, which sources say will cost $10/month with no free tier, has millions of users to gain. Spotify has around 60 million active listeners, only a quarter of which pay a subscription fee. Major music releases that are free to watch on YouTube, meanwhile, regularly rack up tens of millions of views, sometimes hundreds of millions — and even billions.
Sources tell The Verge that Department of Justice officials have interviewed high-ranking music industry executives about Apple’s practices. Separately in Europe, the European Union’s Competition Commission is continuing a probe into Apple’s moves to harm “freemium” music services, which don’t charge a monthly fee.
This isn’t the tech giant’s first run-in with the Justice Department. In a case widely publicized, the company was accused of colluding with publishers to fix eBook prices. Apple agreed to host an antitrust monitor on campus as part of a settlement, who The Verge report says may or may not be a part of the investigation at hand.
Apple’s music service has been years in the making. After purchasing Beats Electronics, the company has reportedly overhauled the Beats Music as the backbone of its new service. Since then, Apple has slowly secured the exclusive rights to stream “more than a dozen [artists],” including Florence and the Machine and Taylor Swift, and has recently signed on well-respected talent from the BBC’s renowned Radio 1 station to help with logistics and music curation. The service is expected to be woven into the iTunes platform and integrate Beats-style personalization including cloud-based libraries and music recommendations.
Rumors peg June as the unveiling month for Apple’s offering, most likely at the company’s annual Worldwide Developer Conference (WWDC). The most recent iOS update may be a subtle hint — it introduces a redesigned Music app with global search, a new MiniPlayer, and interface improvements across the board. We’ll keep an eye on new developments regarding fair play as the service approaches launch, so stay tuned.
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