Apple reportedly negotiating to cut Beats Music prices by half

Beats Music (Windows Phone, Android, iOS 001)

As Swedish music startup Spotify announced Monday giving family members a 50 percent discount on additional accounts, Apple is reportedly pushing Beats Music, acquired as part of its $3 billion purchase of Beats Electronics, to cut the price of its monthly subscription by half, according to Peter Kafka of Re/code on Monday.

Beats Music, a free download for the iPhone and iPad, currently requires users to pay a subscription fee of ten bucks per month for unlimited streaming of tens of millions of songs from its catalog.

Apple is currently moving Beats Music to iTunes servers and is said to want to relaunch the subscription service next year, Kafka writes, adding that the Cupertino firm is trying to get the price cut in half, to $5 a month.

In order to do that, Apple seems to be leveraging the power of its ecosystem in order to persuade labels to get on board with the new pricing scheme. The company’s argument boils down to the fact that its “best iTunes buyers spend about $60 per year on downloaded music,” which works out to precisely $5 per month.

A cheaper Beats Music would widen the addressable market while offsetting any revenue decline from subscribers who’d stop buying individual tracks in favor of streaming, Apple argues.

The problem is, any price cuts that Apple got would have to be offered to all of its rivals, too, Kafka writes.

Spotify, the leading music-streaming service, currently charges ten bucks per month for ad-free high-quality streaming. With the latest pricing scheme, the Swedish startup is hoping that families with at least one Spotify subscription will consider adding additional accounts at half the price, for $5 a month.

Beats’ iOS app now includes full support for iOS 8, making it easier to share links to your favorite songs using iMessage, Mail, Facebook and Twitter.

Will you consider a $5 per month Beats Music subscription when and if it becomes available?