Apple Music is one of the biggest music streaming services out there to not feature a free ad-supported tier. Apple instead offers users a lengthy 3-month trial period after which they need to shell out $9.99/month. If you thought that Apple could eventually launch a free tier of Apple Music like Spotify, well that’s not going to happen.
Elena Segal, Apple’s senior director of music publishing, while speaking to a number of UK MPs at a Digital, Culture, Media, and Sport Committee (DCMS) said that Apple has done more than any other platform to ensure money flow to artists and that the company does not intend to offer a free tier of its music subscription service.
Streaming saved music from piracy 11 years ago, how long do you expect musicians to pay for that? Asks @julianknight15
Elena @AppleMusic “we’re not asking anyone to be grateful … we have gone further than anyone to ensure money flow … we want there to be a healthy ecosystem.”
— Digital, Culture, Media and Sport Committee (@CommonsDCMS) February 23, 2021
Apple was also questioned on running Apple Music as a loss-making service in a bid to sell more iPhones and whether it would switch to a different licensing model. On this, Segal said that doing so would “dramatically affect the economics” of running Apple Music. Additionally, the company wants to create a healthy ecosystem that’s sustainable in the long term. When questioned about finances, Segal said that running Apple Music is a “narrow margin business” especially since the company pays artists more than others.
As I said earlier, it’s challenging to compete with free. It’s always been challenging, whether it’s legitimate or illegitimate. And it’s challenging to compete on an un-level playing field.”
When Apple Music first launched, there were a lot of doubts about Apple’s approach of not going with a free ad-supported ad tier. However, a few years down the line, Apple’s strategy has paid off as the streaming service has become a strong competitor to Spotify while also paying music artists the highest amount of royalties.
[Source UK Parliament, Via MusicWeek]