According to reports from The Verge, Apple is facing scrutiny by the US Department of Justice over allegations that they are acting anti-competitively with the coming launch of their new music streaming service.
Currently, Spotify only 15 million of Spotify’s 60 million users pay to listen to music. And just 5% of Pandora’s 79.2 million active customers part with their hard-earned.
Apparently, Apple’s play has been to ask music labels to withdraw from agreements with these services and the likes of YouTube where music can be accessed for free in return for advertising.
According to the report, Apple is offering to pay YouTube’s music licensing fee to the Universal Music Group if they stop putting music on YouTube. And they are also asking record labels to not renew agreements that allow music streaming through Spotify’s free service.
By removing free options for consumers, it’s suggested Apple will be able to draw customers to their own subscription service which is expected to be launched during WWDC in June this year.
We’re hoping this isn’t the death of free music streaming although we also want to see a market model emerge where artists are paid for their work.