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Apple Music could be in trouble already

timcook.jpg

Well, we suppose it's still a more successful launch than Tidal.

With the ink barely dry on a plethora of thinkpieces about the potential impact of Apple's much-anticipated announcement that it is joining the world of music streaming, it seems that there are complications already.

The attorneys general of New York and Connecticut are apparently investigating Apple's negotiations with the major music companies, with the possibility that they have violated antitrust protocols. Or, in more plain language, there is the distinct suspicion that Apple may have pressured the music industry, using its huge influence, to adversely affect its rivals.

There had been suspicions for some time that Apple was pressuring labels to force Spotify to drop its free streaming tier, with The Department of Justice and the Federal Trade Commission looking closely into Apple's business practices. With Apple Music having no free tier, if Spotify continues to offer this service, it could undercut them. In addition, Apple reportedly offered to pay Universal's licensing fee from YouTube if it stopped allowing the company to use its content.

However, considering that Apple is offering a three month free trial to everyone, it's a bit rich for them to force Spotify to stop their version of 'try-before-you-buy' and to undermine YouTube's entire music-based operation. One music industry executive has previously said that,  "All the way up to Tim Cook, these guys are cutthroat", so perhaps we shouldn't be too surprised about any alleged tactics.

Tim Cook

"You. Yes you. I'm gonna get you. You're a dead man."

Universal Music Group has already written a letter to the New York Attorney General, saying that it has no agreements with Apple or the other two majors (Sony Music and Warner Music) that would impede the availability of free services - but then, they would say that wouldn't they?

As we revealed yesterday, the royalties for Spotify's free tier are surprisingly low, so perhaps moving people away from this and onto the culture of paying a monthly fee will, in time, be a good thing. But, with no information yet forthcoming about Apple's own royalty rate, or its agreement with the majors, there's no way of telling whether its paid service will pay any more than Spotify's free one. It would certainly be surprising if it hasn't used its huge influence to get a much better deal than its rivals on its licence fee and thus leave less for the artists to collect.

Matt Mittenthal, a spokesman for the New York attorney general Eric Schneiderman stated, "This letter is part of an investigation of the music streaming business, an industry in which competition has recently led to new and different ways for consumers to listen to music. To preserve these benefits, it's important to ensure that the market continues to develop free from collusion and other anticompetitive practices."

At least they didn't get U2 out again, otherwise people really would have got mad.

(Images: Rex)

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