While $10 a month seems to be the going rate for most interactive streaming services like Spotify (Pandora charges $5, but it's non-interactive), Apple thinks that's too much. The company would like to lower that to $5 per month for Beats Music, but says it can only do so with a new licensing deal with the majors.
A new economic model could go either way for artists. If subscriptions increase, as analysts (including me) predict, then artists will make more money than they are now, and some cases, a lot more. Apple thinks that a lower price would accelerate growth, but it would also mean that subscriptions would have to at least double to just stay even.
This might sound far-fetched on the surface, but the fact of the matter is that there's only around 20 million paying subscribers globally for all services at the moment, so doubling the growth seems like a no-brainer.
That said, the general thought is that we'll reach 100 million subscribes with a few years anyway, and that's with the current model of $10 per month.
Then again, apple has more than 500 million credit cards on file on their iTunes stores worldwide. It seems like they're pretty sure that they can do some steep conversion at that lower $5 price. Hard to say which is the better way to go right now, but getting the labels to give in on this is certainly going to be an uphill climb.
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