Spotify's new family plan gives you two premium accounts for $15 a month. Apple reportedly has a cheaper service in the works, which indicates the market for $9.99-a-month music streaming subscriptions isn't all it's cracked up to be.
The company bought Beats Electronics, best known for its stylish (and ubiquitous) headphones, back in May for a cool $3 billion, but hasn't done anything with its Beats Music streaming service. In the aftermath of the acquisition, it seemed like the subscription music app was a footnote to the main attraction, the headphones. But rumors are swirling that Apple has big plans for Beats Music, which could include a price cut.
How does $5 a month sound? That's the price Apple is aiming for, Re/code reported on Monday. The company is currently working with record labels to talk them into taking the financial hit, with the argument that iTunes users spend an average of $5 a month on song or album downloads. The price cut would convince more people to sign up for the service, broadening the base of listeners. Unlike Spotify, Beats Music doesn't have a free option, so all users would have to cough up the monthly fee.
Apple is reportedly eyeing a relaunch for Beats Music sometime next year.
Why this matters: If Apple manages to convince record labels to accept its less-is-more philosophy and cuts Beats Music's subscription to $5 a month, it would undercut Spotify and Rdio and position Beats Music as the streaming service to beat. Beats has about 250,000 subscribers compared to Spotify's 40 million (though just 10 million pay for Spotify's premium tier), and Apple needs to do something to make its own service more attractive. Song and album downloads are declining, and the company is no longer the trendsetter it once was when it comes to music. A price cut--and, while we're at it, a bigger music library--would catapult Apple back to the top.