Apple worked hard from the start to try to reduce the monthly cost of what was then Beats Music, and was said to have specifically targeted a $5/month subscription as that matched the average spend of its best iTunes customers. Apple needed the agreement of music labels because the licensing model is one where labels get the bulk of the monthly fee, streaming services effectively taking a commission from the fee charged to consumers.
When music labels refused, Apple tried for $7.99, but wasn’t able to agree this either. When it finally launched, Apple Music charged the same $9.99/month as competing services, a three-month free trial the only concession it was able to win.
One of the reasons labels fought so hard to retain the standard $9.99/month pricing was licensing terms dictated that any concession offered to Apple would have to be offered to other services too. This was the basis on which Apple was able to offer its only $5/mo deal – the same half-price student subscription offered by Spotify. Which makes this report all the more curious.
It may be that labels view an Echo-specific service as such a niche market that it isn’t worth worrying about.
