Apple and other record labels have been pressuring Spotify to reduce their free music streaming services, and now the Department of Justice and Federal Trade Commission are investigating the legality of Apple’s behavior.
According to a report in The Verge, Apple has been pushing major labels to pressure Spotify to reduce the services. As of now, only a quarter of Spotify’s 60 million users have paid for subscriptions, and getting music labels to remove the free Spotify services would surely give a boost to the relaunch of Apple’s streaming service, Beats Music.
Apple also told Universal Music Group, one of the largest record labels in the world, that they would pay for the label’s YouTube licensing fees if the stopped releasing their music on the popular video streaming service. The Financial Times quotes UMG CEO Lucian Grainge as saying “We want to accelerate paid subscription… Ad-funded on-demand is not going to sustain the entire ecosystem of the creators as well as the investors.”
The planned Beats launch will not include a free streaming option, but instead plans to lower monthly costs to roughly $8/month for its services. If Apple can convince labels to pull their music from free Spotify streams, they stand to gain a lot of those customers with the lower monthly charges.
Of course, these behaviors have attracted scrutiny from the DoJ and FTC, as well as the European Union’s Competition Commission. It’s a muddled debate that doesn’t have a clear answer, since of course artists deserve to be compensated for their work, but many music listeners will continue to find alternatives to paying for streaming services.
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