Is Apple trying to block Spotify streaming music in the US?
Is Apple trying to block popular European streaming music service Spotify's US launch? In addition to labels being uncertain as to Spotify's business model, it's ability to monetize, and the future of ad-supported music, CNET is reporting:
In meetings in Los Angeles recently, Apple executives told their music industry counterparts that they had serious doubts about whether Spotify's business model could ever generate significant revenues or profits, according to two sources with knowledge of the discussions.
But Apple executives worried about the effects of a free music service might have on the rest of the market. They noted that it's tough to sell something that someone else is giving away, the sources said. One industry insider said it is only logical that if Spotify were allowed to launch a free-music service here, at a time when Nielsen recently reported that the growth of digital sales has flattened out, it could eat into the businesses of proven revenue-producers like Apple and Amazon.
iTunes is operated at low-margins for Apple as a way to encourage iPod and iPhone hardware purchases, but low-margins at iTunes like sales levels is still a large amount of money and Apple hasn't been this successful so far by leaving anything on the table.
Likewise, labels have been trying to hold Apple at bay by giving competitors like Amazon earlier access to DRM free music at much lower prices, and the entertainment industry in general has been denying them subscription TV, full participation in $0.99 TV show rentals, day-and-date movie availability, and other services consumers would probably enjoy having.
My base position is usually to suspect shenanigans on the part of the labels when these stories break, but should Apple be bearing the full brunt of these headlines this time?
[CNET via MacRumors]