SAN FRANCISCO
As Apple gears up to launch its Beats music streaming service, Music industry outlet Billboard published analysis Monday that claims music streaming services hurt smaller artists.
According to digital music consultant Jeremy Silver, many services such as Spotify pay artists per stream out of one large pool of revenue. But as streams increase, the amount paid per stream decrease, especially for less popular artists.
The criticism comes amid news that Apple is planning a subscription streaming service that could cause severe pain for Spotify -- a model that would provide more money for labels and artists.
Analysts are excited about Apple's debut of its Beats music service, which is set to launch soon, almost a year after Apple bought Beats Electronics for $3 billion – Apple's largest acquisition to date. Apple is expected to showcase Beats at its 2015 Worldwide Developers Conference in June, according to multiple sources, including The New York Times.
Established streaming services are gearing up for the launch, with Spotify offering a special discount in the United States of 99 cents per month for its premium ad-free service, that normally costs $9.99.
Inside sources told Apple-focused news outlet, 9to5Mac, that the Beats service will probably start at $8 per month.
Spotify yearly earnings report for 2014 was published late Friday and show the company’s losses are outpacing its profits, unpleasant news following recent evidence that Apple is pushing music labels to abandon Spotify’s free streaming tier.
Spotify reported $1.3 billion in revenue for 2014, up 45 percent from the previous year. Net losses, though, hit roughly $197 million --three times the $68 million posted in 2013.
Apple is apparently engaging labels that want Spotify to convert more free users to subscribers. Executives from Sony Music and Warner Music Group have made comments recently about rethinking support for free streaming services.
An editorial published Sunday on TorrentFreak, home to a vast community of music pirates, claimed that killing Spotify's free streaming service would only boost piracy.
