There have been multiple reports over the last few days that the Department of Justice is looking into the accusation that Apple is pressuring the major record labels to end their license agreements with music distribution services offering free tiers. The European Union has a similar investigation underway, so there must be some fire under all that smoke.
This comes before the speculated introduction of Apple’s new streaming service, which is widely anticipated for the Apple Developers Conference next month. Eliminating the free tier of the competition, especially Spotify, presumably puts Apple in a stronger position to regain its dominance in music distribution, a status that has slipped in recent years.
While Apple may be pushing hard for this to happen behind the scenes, chances are it’s a long shot and here’s why.
1. Just the fact that the DOJ is looking into the allegation will stop this thing in its tracks. The major labels have never been bastions of fair and balanced dealings and the last thing that the big players in the industry want is the Feds snooping around. While they may or may not be complicit on this issue, who knows what else may be uncovered during an investigation? That means that you’ll soon get directives from high ranking music execs for their business affairs departments to drop this issue like a hot potato.
2. Does Apple really believe that eliminating the free tier will actually increase its subscriber numbers? First of all, to assume that the next incarnation of iTunes Beats (or whatever it will be called) will have all Spotify users immediately want to suspend their subscriptions and switch to iTunes is delusional at best.
That’s assuming a lot considering that the company has a pretty poor track record of late with its music software. While the early editions of iTunes led the way in user friendliness, lately the app feels old and bloated, with features that are more like attachments rather than integrations. Likewise, iTunes Radio wasn’t exactly the runaway hit that everyone expected. Read more on Forbes.